UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-01829
Columbia Acorn Trust
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
Date of fiscal year end: 12/31/05
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Date of reporting period: 06/30/05
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
LOOK INSIDE FOR DETAILS
ON THE 2005 COLUMBIA
ACORN FUNDS ANNUAL
SHAREHOLDER
INFORMATION MEETING.
[PHOTO OF ACORNS]
COLUMBIA ACORN FAMILY OF FUNDS
CLASS Z SHARES
SEMIANNUAL REPORT
JUNE 30, 2005
MANAGED BY COLUMBIA WANGER ASSET MANAGEMENT, L.P. 2
COLUMBIA ACORN FUND
COLUMBIA ACORN INTERNATIONAL
COLUMBIA ACORN USA
COLUMBIA ACORN INTERNATIONAL SELECT
COLUMBIA ACORN SELECT
COLUMBIA THERMOSTAT FUND
PLEASE JOIN US AT THE
2005
ANNUAL SHAREHOLDER INFORMATION MEETING
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September 27, 2005
9 a.m. - 10 a.m. Central time,
immediately following the special meeting of shareholders
|_|
Bank One Auditorium, Plaza Level
38 South Dearborn Street
Chicago, IL 60602
REFRESHMENTS WILL BE SERVED.
|_|
PLEASE RSVP BY SEPTEMBER 20 BY CALLING
800-922-6769
DIRECTIONS TO THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING
The Bank One Auditorium is located on the Plaza Level of the Bank One building.
The Bank One building is located in the center of the Loop, bordered by Dearborn
Street on the east, Madison Street on the north, Clark Street on the west and
Monroe Street on the south.
FROM THE SOUTH:
Take 1-57 (which merges with I-94, also known as the Dan Ryan Expressway). Take
the Dan Ryan into Chicago. Follow the signs for the Kennedy Expressway West.
Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east)
from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn.
FROM THE NORTH:
Take the Kennedy Expressway (I-90/94) south to Chicago. Exit in the city at
Monroe Street. Turn left (east) from the exit onto Monroe Street. Proceed east
on Monroe Street to Dearborn.
FROM THE WEST:
Take the Eisenhower Expressway (I-290) from the west. This becomes Congress
Street in the city. Take Congress east to Dearborn Street. Turn left (north) on
Dearborn to Monroe Street.
FROM THE SOUTHWEST:
Take the Stevenson Expressway (I-55). Exit to the Kennedy Expressway
(North-Wisconsin). Travel on the Kennedy and exit using the Monroe Street exit.
Turn right (east) from the exit onto Monroe Street. Proceed east on Monroe
Street to Dearborn.
SEE BACK INSIDE PAGE FOR PARKING -->
COLUMBIA ACORN FAMILY OF FUNDS SEMIANNUAL REPORT 2005
TABLE OF CONTENTS
Columbia Acorn Family of Funds
Performance At A Glance 2
Squirrel Chatter: Discipline and Creativity 3
Understanding Your Expenses 6
COLUMBIA ACORN FUND
In a Nutshell 8
At a Glance 9
Major Portfolio Changes 20
Statement of Investments 22
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 10
At a Glance 11
Major Portfolio Changes 34
Statement of Investments 36
Portfolio Diversification 41
COLUMBIA ACORN USA
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 42
Statement of Investments 43
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 14
At a Glance 15
Major Portfolio Changes 48
Statement of Investments 49
Portfolio Diversification 51
COLUMBIA ACORN SELECT
In a Nutshell 16
At a Glance 17
Major Portfolio Changes 52
Statement of Investments 53
COLUMBIA THERMOSTAT FUND
In a Nutshell 18
At a Glance 19
Statement of Investments 73
Statement of Assets and Liabilities 74
Statement of Operations 75
Statement of Changes in Net Assets 76
Financial Highlights 78
Notes to Financial Statements 79
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 56
Statements of Operations 57
Statements of Changes in Net Assets 58
Financial Highlights 62
Notes to Financial Statements 66
Columbia Acorn Family of Funds Information 83
Management Fee Evaluation of the
Senior Officer 85
>2005 MID-YEAR DISTRIBUTIONS
The following table details the funds' mid-year distributions. The record date
for Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA,
Columbia Acorn Select, Columbia Acorn International Select, and Columbia
Thermostat was June 6, 2005. The ex-dividend date was June 7, 2005, and the
payable date was June 8, 2005.
Long-term Short-term Ordinary Reinvestment
Capital Gains Capital Gains Income Price
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Columbia Acorn Fund $0.3609 $0.0255 None $26.26
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Columbia Acorn International None None $0.4280 $29.20
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Columbia Acorn USA $0.3640 None None $25.64
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Columbia Acorn Select $0.0919 $0.0353 None $20.54
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Columbia Acorn International Select None None $0.2843 $17.79
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Columbia Thermostat Fund $0.0927 $0.1562 None $13.03
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THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY
AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO
BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY
CHANGE AT ANY TIME WITHOUT NOTICE AND THE PORTFOLIO MANAGERS MAY ALTER A FUND'S
PORTFOLIO HOLDINGS BASED ON THESE VIEWS AND THE FUND'S CIRCUMSTANCES AT THAT
TIME.
1
COLUMBIA ACORN FAMILY OF FUNDS
>PERFORMANCE AT A GLANCE AVERAGE ANNUAL TOTAL RETURNS THROUGH 6/30/05
2nd Year to Life
Quarter* Date* 1 year 3 years 5 years 10 years of Fund
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COLUMBIA ACORN FUND
(6/10/70) 4.07% 2.78% 14.58% 17.80% 13.32% 15.77% 16.29%
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S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% 9.94% 11.88%
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Russell 2500 4.52% 1.24% 12.73% 14.76% 7.42% 12.12% NA
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Lipper Small-Cap
Core Funds Index 3.07% -0.16% 9.67% 12.45% 7.25% 11.42% NA
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Lipper Mid-Cap
Core Funds Index 3.13% 1.88% 11.47% 12.71% 3.92% 11.51% NA
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COLUMBIA ACORN
INTERNATIONAL (9/23/92) -0.26% 2.97% 22.56% 17.80% 1.63% 10.73% 12.21%
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S&P/Citigroup EMI
Global ex-US -0.40% 2.79% 21.33% 21.26% 7.58% 7.17% 8.07%
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MSCI EAFE -1.01% -1.17% 13.65% 12.06% -0.55% 5.22% 6.85%
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Lipper Int'l Small-
Cap Funds Index -0.22% 3.62% 20.72% 21.47% 6.20% NA NA
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COLUMBIA ACORN
USA (9/4/96) 5.48% 5.48% 15.82% 16.88% 14.56% -- 14.58%
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Russell 2000 4.32% -1.25% 9.45% 12.81% 5.71% -- 9.08%
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Lipper Small-Cap
Core Funds Index 3.07% -0.16% 9.67% 12.45% 7.25% -- 10.22%
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S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% -- 8.69%
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COLUMBIA ACORN INT'L
SELECT (11/23/98) -0.96% 0.58% 15.96% 15.38% -1.40% -- 9.77%
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S&P/Citigroup World ex-US
Cap Range $2-10B -0.29% 0.79% 17.64% 17.54% 6.64% -- 8.75%
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MSCI EAFE -1.01% -1.17% 13.65% 12.06% -0.55% -- 3.24%
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Lipper International
Funds Index -0.60% -0.65% 13.45% 11.16% -0.19% -- 4.50%
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COLUMBIA ACORN
SELECT (11/23/98) 5.45% -0.14% 10.23% 14.49% 10.71% -- 14.04%
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S&P MidCap 400 4.26% 3.85% 14.03% 13.16% 8.49% -- 11.79%
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Lipper Mid-Cap
Growth Index 3.14% -0.92% 7.31% 9.82% -7.03% -- 5.61%
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S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% -- 1.88%
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COLUMBIA THERMOSTAT
FUND (9/25/02) 2.62% 1.44% 7.79% -- -- -- 12.39%
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S&P 500 1.37% -0.81% 6.32% -- -- -- 16.57%
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Lehman U.S. Credit
Intermediate Bond Index 2.76% 1.56% 5.79% -- -- -- 5.67%
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Lipper Flexible
Portfolio Funds Index 1.18% -0.36% 6.70% -- -- -- 13.52%
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*Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT
DEFERRED SALES CHARGES (CDSC). CLASS Z SHARES ARE SOLD ONLY AT NAV WITH NO 12B-1
FEE. CLASS Z SHARES HAVE LIMITED ELIGIBILITY AND THE INVESTMENT MINIMUM
REQUIREMENT MAY VARY. PLEASE SEE THE FUND'S PROSPECTUS FOR DETAILS.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S.
blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500.
RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies, formed
by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL
2500 is the smallest 2,500 U.S. companies from this same group. S&P/ CITIGROUP
EMI GLOBAL EX-US is the bottom 20% of institutionally investable capital of
developed and emerging countries, selected by index sponsor, outside the U.S.
MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely
recognized international benchmark that comprises 20 major markets in proportion
to world stock market capitalization. S&P/CITIGROUP WORLD EX-US CAP RANGE $2-10B
is a subset of the broad market selected by the index sponsor representing the
mid-cap developed market excluding the U.S. LIPPER INDEXES include the largest
funds tracked by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH
INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core
funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not
including non-U.S. small-cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX,
10 largest non-U.S. funds investing in small-cap companies, including Columbia
Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small-cap
core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX
is an equal dollar weighted index of the 30 largest mutual funds within the
Flexible Portfolio fund classification, as defined by Lipper. The LEHMAN U.S.
CREDIT INTERMEDIATE BOND INDEX is the intermediate component of the U.S. Credit
Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign
debentures and secured notes that meet specified maturity, liquidity, and
quality requirements. All indexes are unmanaged and returns include reinvested
distributions. It is not possible to invest directly in an index.
2
>SQUIRREL CHATTER: DISCIPLINE AND CREATIVITY
[PHOTO OF RALPH WANGER]
A popular new book by Tom Friedman, "The World Is Flat: A Brief History of the
Twenty-First Century," recounts how developing countries such as India and China
are using modern technology to compete with the United States in both
manufacturing and services. He contrasts the success of China and India to the
failure of the Arab states to participate in the modern world. He deplores the
influence of Yamani, the former Saudi oil minister, who used oil as an economic
weapon, and Osama bin Laden who uses terror as a political weapon. Friedman
compares the stagnant current state of Arab culture with its peak in the 12th
century. "What makes Yamanism and Bin Ladenism unfortunate as strategies for the
Arabic world is that they ignore the examples within the Arab culture and
civilization - when it was at its height - of discipline, hard work, knowledge,
achievement, scientific inquiry, and pluralism." 1
The popular Susan Hockfield was just installed as president of MIT. In her
inaugural speech she invoked her list of virtues. She said, "The value of
engineering - the rigor; the unflappable curiosity; the discipline and
creativity; the appetite for good, old fashioned hard work; the passionate,
enthusiastic, can do, hands-on, fix-it-now attitude - these values are and
always will be the values of MIT."
The rules for success in the world don't seem to have changed very much.
Twelfth century Cordoba and 21st century Cambridge are completely different in
almost every way, but the characteristics that make you successful have not
changed. Any financial analyst or serious investor should apply the engineer's
characteristics of discipline, hard work, knowledge and enthusiasm to investing.
President Hockfield's linking of discipline and creativity is interesting.
It's widely believed that we should diversify and balance our investments. We
balance stocks vs. bonds, growth stocks vs. value stocks, big-cap vs. small-cap
stocks, and U.S. stocks vs. international, but it is unusual to think of the
balance between discipline and creativity; yet this balance is what I believe
brings good investment results. Discipline without creativity is sterile - you
tend to get an index fund. Index funds run by computer algorithm are boring and
backward looking - although they have a significant place in investment
portfolios. Creativity without discipline tends to result in wild speculation
and money-losing results. We all remember the dot.com's in 1999 when the market
was dominated by speculators who ignored valuation in favor of science- fiction
fantasies. The resulting bubble was a seductive, narcotic experience for a year
or two but of course ended very badly. We believe the Columbia Acorn Funds have
been successful because our analysts have been able to maintain a balance
between discipline and creativity.
WE ARE NOT MANUFACTURERS
Organizations that are in the business of marketing mutual funds often prefer
discipline and are made nervous by creativity. For instance, Raymond "Chip"
Mason, chairman of Legg Mason, a major force in the mutual fund business, said
recently, "For two years we've been looking to cross the line and become pure
asset management. All the regulators have been pointing toward the need to
separate the manufacturing and distribution businesses." 2
I have been in corporate meetings in which mutual fund portfolio
management was called "manufacturing" but this is a strange and inapt metaphor.
Manufacturers make products. Mutual funds are NOT a product. Cap'n Crunch cereal
is a product. When you go to the store to buy a new box of Cap'n Crunch you
expect the taste and nutrition performance to be exactly like the last box.
Manufacturing cereal is very disciplined resulting in high quality and high
reliability, so that every box is identical. Since you are a mutual fund
shareholder you know that a mutual fund could be a lot better or a lot worse
than you expected when you bought it. Investing involves forecasting the future,
but forecasting is an uncertain and sloppy process. While discipline is
important, you need a lot of creativity as well.
Predicting the future does not require a fortune teller with a crystal
ball. It is more like watching a skilled athlete. When you go to a baseball game
and a batter hits a fly ball to left field, the fielder will see the ball
heading his direction and, by experience, run to where the ball is going to land
and make what looks like a routine catch. The fielder has to predict the flight
of the ball, which for a physicist would require solving a complicated equation,
but the player shows that it is not an impossible task. Like the outfielder, we
have figured out where trends are likely going to land with reasonable success.
As in baseball, the ball can elude the fielder and the batter
3
ends up on second base. Sometimes our analysts miss the ball too, but for the
full season we tend to catch more balls than we miss.
TWO WHEELS GOOD, FOUR WHEELS BAD
Other teams haven't done so well. Forty years ago, major U.S. car makers were
among the largest companies in the world and were highly profitable. Since then,
the U.S. automotive industry has fallen into a long slump. Their corporate bonds
have been downgraded in quality, which is a definite sign of financial problems.
I believe that these companies were complacent and arrogant, so the German and
Japanese car makers beat them up.
A long time ago, perhaps 1966, I attended a meeting of the Chicago Science
Analysts with the General Time Corporation. The company's main business was
making name-brand clocks like Seth Thomas and Big Ben. It also made automobile
clocks. The clocks were sold as accessories with the car. They were mechanical
clocks because electronic clocks hadn't yet been invented. They worked for about
three months and then broke. The U.S. automotive giant that bought the clocks
from General Time paid $3.25 per clock and resold it to the customer for $21. I
asked the president of General Time why his clocks didn't work better. I knew
this was an impertinent question but I wanted to see how he would react. I
expected him to take a defensive position retorting that the clocks were fine
but weren't being used correctly. To my surprise he admitted that the clocks
WERE lousy and he explained why.
General Time couldn't make a good clock for $3.25. The clock needed an
additional component that would have made it a sturdy, reliable device, but this
improvement would have raised the selling price to $3.75. Its customer, the
automobile manufacturer, was adamant about sticking to the lower price. Even to
an inexperienced analyst, as I was in 1966, I did not see how the automaker
could prosper if it was not delivering a high-quality car. Such a successful
company could have paid $3.75 for a clock and sold it for a decent profit even
if it kept the price at $21. While this would have been a less enormous markup,
the car likely would have been a better vehicle. If the automaker was willing to
sell a crummy clock, then I thought that customers would perceive that it was
cutting corners on all the other components of the vehicle too. Bad clock, bad
car. This willingness to forego quality for price made room for the imports.
Why am I bringing up an anecdote from 40 years ago? I think there are some
useful lessons here for financial analysts and investors. First, in a management
meeting it is okay to ask tough questions. You get more meaningful answers that
way. Second, you can find out a lot about a company by talking to its suppliers
or customers. Company spokesmen will only give you their own corporate press
release. Third, a long-term trend will take a long time to develop but it is
enormously important.
At the time of my 1966 meeting, U.S. automakers were riding high because
foreign car imports were not yet a problem. In 1960, Japan exported only 39,000
vehicles. By 1970, the Japanese were starting to exploit the lower quality of
U.S. cars and exported 1.1 million cars. In 1980, exports rose to 6 million and
the Japanese were producing more vehicles than U.S. manufacturers. U.S.
automotive companies had to react to the loss of market share from high-quality
imports. However, once there is a loss of market share, it is not usually
readily reversible.
DAVID ALWAYS BEATS GOLIATH
There are several lessons we can learn from the decline of Arab civilization and
the problems of U.S. auto companies: (1) To operate a successful business, the
world is too competitive to be complacent. Like baseball players, companies have
to fight to keep their position on the team. Great U.S. businesses must
constantly compete in the world market and it is darn tough. (2) Big companies
are often just big targets. Small companies are hungry to succeed and are
constantly focused on improving with the hope of taking some of the flabby
giant's customers. (3) History provides a useful context. Discipline,
creativity, hard work, knowledge, achievement, and a can-do, hands-on,
fix-it-now attitude worked in the past and will work now. (4) We believe
small-cap investing works if you can identify the hungry, small companies whose
employees embrace our list of exemplary values. The core investment strategy of
the Columbia Acorn Funds has always been to try to find small- and mid-cap
companies that are on the way up. We don't want to own once-great companies that
are now on their way down. This is partly a matter of personal taste, because we
find following big, sick companies
4
to be depressing. Even though there are occasional turnarounds in these big
companies, it seems to us that is not the way to bet.
SO LONG AND BEST REGARDS!
This is my final "Squirrel Chatter." I am retiring from Columbia Wanger Asset
Management as of September 30, but I will still be a trustee of Acorn Investment
Trust. While I considered writing a few more essays, current regulatory rules
are not conducive to the free-ranging thought that was characteristic of these
essays. I have great confidence in Chuck McQuaid and his team of analysts and
portfolio managers to keep the performance of the Funds at a competitive level.
Thank you, fellow shareholders, for your support over 35 years. I regard myself
as truly fortunate to have been able to build a career in this exciting
industry. I am especially proud that we have enabled thousands of our
shareholders to pursue their economic goals by investing in our funds.
COLUMBIA WAM NEWS
We are pleased to announce that Ashish Kohli has joined our domestic analyst
team to follow health care. Jason Selch, who followed energy, departed in May.
We are searching for his replacement and continue to talk to some promising
candidates. Your Columbia Acorn investment team includes 20 investment analysts
and portfolio managers.
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
- --------------------------------------------------------------------------------
1 Friedman, Thomas, THE WORLD IS FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST
CENTURY, Farrar, Straus and Giroux, 2005. Page 405.
2 Raymond "Chip" Mason, chairman of Legg Mason, THE WALL STREET JOURNAL,
June 27, 2005, page C1.
5
>UNDERSTANDING YOUR EXPENSES
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing 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 funds and to compare these costs with the ongoing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the Class Z shares of the Columbia Acorn Funds
for the last six months. The information in the following table is based on an
initial investment of $1,000, which is invested at the beginning of the period
and held for the entire period. Expense information is calculated two ways and
each method provides you with different information. The amount listed in the
"actual" column is calculated using each fund's actual operating expenses and
total return for the period. The amount listed in the "hypothetical" column
assumes that the return each year is 5% before expenses and then applies each
fund's actual expense ratio for the period to the hypothetical return. You
should not use the hypothetical account values and expenses to estimate either
your actual account balance at the end of the period or the expenses you paid
during the reporting period. See the "Compare with other funds" information for
details on using the hypothetical data.
>JANUARY 1, 2005 - JUNE 30, 2005
ACCOUNT VALUE AT ACCOUNT VALUE AT
THE BEGINNING OF THE END OF EXPENSES PAID FUND'S
THE PERIOD ($) THE PERIOD ($) DURING PERIOD ($) ANNUALIZED
---------------------------------------------------------------------------------------- EXPENSE
CLASS Z SHARES ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL RATIO (%)*
- -----------------------------------------------------------------------------------------------------------------------------------
Columbia Acorn Fund 1,000.00 1,000.00 1,027.82 1,021.03 3.82 3.81 0.76
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Columbia Acorn
International 1,000.00 1,000.00 1,029.70 1,019.84 5.08 5.06 1.01
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Columbia Acorn USA 1,000.00 1,000.00 1,054.80 1,019.69 5.25 5.16 1.03
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Columbia Acorn
International Select 1,000.00 1,000.00 1,005.80 1,017.60 7.21 7.25 1.45
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Columbia Acorn Select 1,000.00 1,000.00 998.61 1,019.84 4.96 5.01 1.00
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Columbia Thermostat Fund 1,000.00 1,000.00 1,014.38 1,023.55 1.25 1.25 0.25
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
Had the Investment Adviser and/or Transfer Agent not waived a portion of
expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the funds and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
Columbia Thermostat Fund's expenses do not include fees and expenses incurred by
the Fund from the underlying portfolio funds.
* For the six months ended 06/30/05.
COMPARE WITH OTHER FUNDS
Since all mutual funds are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the funds with other funds. To do
so, compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
1-800-922-6769
6
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
Management Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at (800)
922-6769.
o For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an
account balance was $8,600 at the end of the period, the result
would be 8.6.
2. In the section of the table titled "Expenses paid during the
period," locate the amount for your fund. You will find this number
is in the column labeled "actual." Multiply this number by the
result from step 1. Your answer is an estimate of the expenses you
paid on your account during the period.
7
COLUMBIA ACORN FUND
>IN A NUTSHELL
[PHOTO OF CHARLES P. MCQUAID] [PHOTO OF ROBERT A. MOHN]
Columbia Acorn Fund was up 4.07% in the second quarter, slightly underperforming
the Russell indexes but outperforming the Lipper Small- and Mid-Cap Funds
indexes as well as the large-cap S&P 500 Index. In the first half of 2005, the
Fund grew 2.78%, moderately beating all of its benchmarks. (See Page 2
performance data). 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.
Columbia Acorn's domestic stocks rose 5.16% in the quarter, driven by good
stock selections. Handbag designer Coach and women's apparel retailer Chico's
FAS were the Fund's two top dollar winners, each ringing up gains of about 20%.
Hobby goods retailer Michaels Stores and apparel retailer Abercrombie & Fitch
also were among our top 10 dollar gainers, rising 14% and 20% respectively. All
were up on better than expected earnings and outperformed their group in the
quarter. We thank our consumer analyst, Susie Hultquist, for these fine stock
picks.
Esco Technologies, a producer of remotely read electric meters, jumped 25%
on large orders and fine earnings (see sidebar for details). Filter maker Cuno
surged 39% in the quarter when it agreed to sell. Our industrial analyst Rob
Chalupnik found both of these winners. Southwestern Energy spurted up 66% in the
quarter, as investors got excited about new drilling prospects. Communications
tower company Crown Castle International transmitted a 26% gain, spurred by an
attractive debt refinancing. Hospitality information system provider Micros
Systems served a 22% return on better than expected earnings.
Columbia Acorn's largest dollar losers were Navigant Consulting, off 35%,
and Kronos, down 21%, both lower due to earnings estimate cuts. Harley-Davidson
hit a speed bump, falling 14% on lower than expected production hikes.
Columbia Acorn's foreign stocks rose 1.91% and ended the quarter
representing 15% of the fund. Oil-pipe makers Vallourec and Tenaris continued
their runs, each producing gains of more than 30%. Sweden-based kitchen cabinet
maker Nobia fell 21% on lower revenues and manufacturing problems in its U.K.
operations. The Fund's foreign stocks overall did fine against their benchmarks
and were up nicely in local currencies, but dollar gains were slashed by
currency movements.
/s/Charles P. McQuaid /s/Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
METERING SUCCESS
- --------------------------------------------------------------------------------
We wrote about Esco Technologies in our second quarter 2004 shareholder report,
citing the virtues of all three of its businesses - filters, remotely read
electric meters, and radio frequency shielding products. Since the company's
meter business is accelerating and the stock has continued to do well, we are
providing more perspective. We had unsuccessfully invested in remote metering
many years ago, so this time we did lots of homework. We talked to customers and
competitors and visited trade shows. Our contacts confirmed that Esco's meters
were reliable and cost effective, and could help manage peak electricity demand.
Meter orders have surged and meters are now driving Esco's profits. The stock is
up 252% from our first purchase and we think excellent growth can continue.
- --------------------------------------------------------------------------------
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: COACH, 1.4%;
CHICO'S FAS, 1.2%; MICHAELS STORES, 0.9%; ABERCROMBIE & Fitch, 0.6%; ESCO
TECHNOLOGIES, 0.7%; CUNO, 0.4%; SOUTHWESTERN ENERGY, 0.3%; CROWN CASTLE
INTERNATIONAL, 0.6%; MICROS SYSTEMS, 0.6%, NAVIGANT CONSULTING, 0.2%, KRONOS,
0.4%, HARLEY-DAVIDSON, 0.6%, VALLOUREC, 0.3%; TENARIS, 0.3%; NOBIA, 0.2%.
1-800-922-6769
8
COLUMBIA ACORN FUND
>AT A GLANCE TICKER SYMBOL: ACRNX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------
YEAR
TO DATE* 1 YEAR 5 YEARS 10 YEARS
----------------------------------------------
Returns before taxes 2.78% 14.58% 13.32% 15.77%
- --------------------------------------------------------------------------------
Returns after taxes 2.53 13.67 12.50 13.74
on distributions
- --------------------------------------------------------------------------------
Returns after taxes 2.07 10.43 11.30 12.98
on distributions and
sale of fund shares
- --------------------------------------------------------------------------------
S&P 500 (pretax) -0.81 6.32 -2.37 9.94
- --------------------------------------------------------------------------------
Russell 2500 (pretax) 1.24 12.73 7.42 12.12
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. Indexes do not reflect any deduction for fees, expenses or
taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 21.0%
Industrial Goods/Services 15.4%
Finance 12.1%
Other* 11.6%
Energy/Minerals 9.4%
Health Care 8.6%
Information 21.9%
Software/Services 9.0%
Computer Related Hardware 6.6%
Telecommunications 3.9%
Media 2.4%
* Other includes short-term obligations, cash and other assets less liabilities
of 7.6%.
Foreign equities within the portfolio were 15.0% diversified by country as
follows: 5.7% Europe ex-Ireland & UK; 2.9% Ireland & UK; 1.8% Canada; 0.5%
Australia/New Zealand; 2.8% Latin America and Emerging Markets; 1.3% Japan.
- --------------------------------------------------------------------------------
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z)
- --------------------------------------------------------------------------------
>June 10, 1970 through June 30, 2005
This graph compares the results of $50,000 invested in Columbia Acorn Fund at
inception on June 10, 1970 to the S&P 500 Stock Index, a broad, market-weighted
average of U.S. blue-chip company stock performance, and to an initial $158,883
investment in the Russell 2500, an index of the 2,500 smallest U.S. companies,
on the index's December 31, 1978 inception date. The indexes are unmanaged and
returns for both the indexes and the Fund include reinvested dividends and
capital gains. It is not possible to invest directly in an index. The graph and
table do not reflect tax deductions that a shareholder would pay on Fund
distributions or the sale of Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV ON 06/30/05: $26.79
TOTAL NET ASSETS OF THE FUND: $14,502.8 MILLION
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
14.58% 13.32% 15.77% 16.29%
[MOUNTAIN CHART]
COLUMBIA
ACORN FUND S&P 500 RUSSELL 2500
---------- ------- ------------
6/10/1970 50000 50000
6/30/1970 48475 49099
52586 52875
56115 55405
9/30/1970 60114 57406
59581 56929
60847 59811
12/31/1970 63381
3/31/1971
6/30/1971
9/30/1971
12/31/1971
3/31/1972
6/30/1972
9/30/1972
12/31/1972
3/31/1973
6/30/1973
9/30/1973
12/31/1973
3/31/1974
64627
6/30/1974 62535
58591 61831
53108 55882
9/30/1974 48486 49444
60079 57757
57181 54935
12/31/1974 53421 54081
61857 60957
64478 64845
3/31/1975 65113 66494
6/30/1975
9/30/1975
12/31/1975
3/31/1976
6/30/1976
9/30/1976
12/31/1976
3/31/1977
6/30/1977
9/30/1977
12/31/1977
3/31/1978
6/30/1978
9/30/1978
12/31/1978
3/31/1979 3/31/1979 3/31/1979
3/31/1979
6/30/1979 6/30/1979 6/30/1979
6/30/1979
9/30/1979 9/30/1979 9/30/1979
9/30/1979
12/31/1979 12/31/1979 12/31/1979
12/31/1979
3/31/1980 3/31/1980 3/31/1980
3/31/1980
6/30/1980 6/30/1980 6/30/1980
6/30/1980
9/30/1980 9/30/1980 9/30/1980
9/30/1980
12/31/1980 12/31/1980 12/31/1980
12/31/1980
3/31/1981 3/31/1981 3/31/1981
3/31/1981
6/30/1981 6/30/1981 6/30/1981
6/30/1981
9/30/1981 9/30/1981 9/30/1981
9/30/1981
12/31/1981 12/31/1981 12/31/1981
12/31/1981
3/31/1982 3/31/1982 3/31/1982
3/31/1982
6/30/1982 6/30/1982 6/30/1982
6/30/1982
9/30/1982 9/30/1982 9/30/1982
9/30/1982
12/31/1982 12/31/1982 12/31/1982
12/31/1982
3/31/1983 3/31/1983 3/31/1983
3/31/1983
6/30/1983 6/30/1983 6/30/1983
6/30/1983
9/30/1983 9/30/1983 9/30/1983
9/30/1983
12/31/1983 12/31/1983 12/31/1983
12/31/1983
3/31/1984 3/31/1984 3/31/1984
3/31/1984
6/30/1984 6/30/1984 6/30/1984
6/30/1984
9/30/1984 9/30/1984 9/30/1984
9/30/1984
12/31/1984 12/31/1984 12/31/1984
12/31/1984
3/31/1985 3/31/1985 3/31/1985
3/31/1985
6/30/1985 6/30/1985 6/30/1985
6/30/1985
9/30/1985 9/30/1985 9/30/1985
9/30/1985
12/31/1985 12/31/1985 12/31/1985
12/31/1985
3/31/1986 3/31/1986 3/31/1986
3/31/1986
6/30/1986 6/30/1986 6/30/1986
6/30/1986
9/30/1986 9/30/1986 9/30/1986
9/30/1986
12/31/1986 12/31/1986 12/31/1986
12/31/1986
3/31/1987 3/31/1987 3/31/1987
3/31/1987
6/30/1987 6/30/1987 6/30/1987
6/30/1987
9/30/1987 9/30/1987 9/30/1987
9/30/1987
12/31/1987 12/31/1987 12/31/1987
12/31/1987
3/31/1988 3/31/1988 3/31/1988
3/31/1988
6/30/1988 6/30/1988 6/30/1988
6/30/1988
9/30/1988 9/30/1988 9/30/1988
9/30/1988
12/31/1988 12/31/1988 12/31/1988
12/31/1988
3/31/1989 3/31/1989 3/31/1989
3/31/1989
1004680
1040490 6/30/1989 6/30/1989
6/30/1989 1021120
1079720
1107110 9/30/1989 1017960
9/30/1989 1132470 1012910
1066790 960253
1087840 12/31/1989 967870
12/31/1989 1113410 972672
1041290 891533
1054260 3/31/1990 916537
3/31/1990 1086170 945681
1054780 910824
1130010 6/30/1990 982773
6/30/1990 1148430 982856
1131900 947585
979516 9/30/1990 833577
9/30/1990 875407 766844
854794 730332
888714 12/31/1990 792594
12/31/1990 918371 827947
973073 894017
1052590 3/31/1991 985091
3/31/1991 1095160 1039160
1130410 1036920
1183700 6/30/1991 1084690
6/30/1991 1132670 1037420
1185000 1085940
1229880 9/30/1991 1126750
9/30/1991 1231020 1126920
1269930 1152580
1233860 12/31/1991 1106630
12/31/1991 1353200 1216170
1425780 1276360
1477750 3/31/1992 1310060
3/31/1992 1467300 1267920
1422880 1242750
1428980 6/30/1992 1254010
6/30/1992 1394140 1210210
1446560 1255250
1423400 9/30/1992 1222220
9/30/1992 1448620 1242750
1525140 1280090
1614190 12/31/1992 1364370
12/31/1992 1681050 1411900
1753390 1445760
1748520 3/31/1993 1425480
3/31/1993 1843050 1478710
1796850 1436650
1944870 6/30/1993 1494440
6/30/1993 1967050 1510010
1957060 1519700
2086230 9/30/1993 1587010
9/30/1993 2147140 1616980
2228860 1636350
2144690 12/31/1993 1583610
12/31/1993 2224440 1645630
2235610 1697700
2208500 3/31/1994 1691580
3/31/1994 2101660 1609030
2119200 1618390
2095280 6/30/1994 1601750
6/30/1994 2023530 1551900
2088900 1593960
2185300 9/30/1994 1680150
9/30/1994 2157940 1663100
2149890 1666000
2066220 12/31/1994 1593800
12/31/1994 2058750 1628410
2020070 1625180
2085660 3/31/1995 1706730
3/31/1995 2115940 1748620
2139490 1779760
2205080 6/30/1995 1817430
6/30/1995 2294230 1904610
2405710 1024830 2016960
2431220 1027410 2049250
9/30/1995 2480520 1070770 2087580
2376810 1066940 2022260
2444820 1113780 2108700
12/31/1995 2487030 1135230 2144630
2527260 1173870 2159860
2626020 1184760 2224940
3/31/1996 2677220 1196160 2270230
2819860 1213800 2375210
2920440 1245100 2439710
6/30/1996 2863750 1249850 2364780
2716050 1194630 2191660
2819940 1219830 2317670
9/30/1996 2923830 1288490 2418100
2908990 1324030 2402200
2990620 1424110 2518280
12/31/1996 3047850 1395890 2552810
3155250 1483100 2623350
3114720 1488760 2584350
3/31/1997 2972870 1433310 2467360
2989080 1518870 2498580
3226180 1611350 2728580
6/30/1997 3374110 1683540 2840110
3546960 1817490 3006520
3563400 1715670 3048420
9/30/1997 3836720 1809630 3247700
3723690 1749200 3101740
3723690 1830170 3115650
12/31/1997 3809260 1861600 3174600
3742000 1882190 3126080
4015530 2017940 3353100
3/31/1998 4266640 2121280 3500140
4329420 2142620 3513390
4165750 2105800 3350290
6/30/1998 4254890 2191330 3354260
4013830 2168000 3123840
3281560 1854550 2534590
9/30/1998 3424830 1973360 2714590
3597670 2133880 2862960
3745480 2263200 3004780
12/31/1998 4038430 2393620 3186850
4036030 2493710 3181390
3853880 2416210 2972330
3/31/1999 3894620 2512880 3035920
4213380 2610200 3307480
4280490 2548560 3358900
6/30/1999 4509220 2690000 3533680
4574710 2606000 3464210
4441300 2593110 3355830
9/30/1999 4417040 2522020 3305910
4550450 2681620 3378270
4873060 2736130 3569030
12/31/1999 5386280 2897280 3956260
5255470 2751710 3865270
5644980 2699620 4423470
3/31/2000 5409530 2963720 4355770
5223500 2874560 4121520
5113040 2815580 3923770
6/30/2000 5310520 2884990 4181530
5332110 2839890 4075060
5720690 3016280 4425960
9/30/2000 5816290 2857040 4281960
5668260 2844960 4164470
5370030 2620670 3797980
12/31/2000 5928040 2633500 4125090
6038270 2726930 4260640
5886710 2478280 3986290
3/31/2001 5621480 2321280 3767600
6117490 2501670 4100330
6375830 2518430 4223670
6/30/2001 6466180 2457140 4283630
6343650 2432950 4130450
6091580 2280640 3995100
9/30/2001 5265370 2096480 3478090
5489420 2136450 3657940
5913030 2300330 3953770
12/31/2001 6291780 2320480 4175410
6231960 2286620 4123590
6154540 2242520 4051380
3/31/2002 6604960 2326860 4331490
6590890 2185790 4320480
6393830 2169680 4193840
6/30/2002 6070090 2015120 3957500
5352240 1858050 3485220
5397980 1870250 3495760
9/30/2002 5077760 1666990 3218800
5292410 1813710 3323710
5633750 1920470 3595050
12/31/2002 5454280 1807640 3432390
5327600 1760290 3341190
5243150 1733880 3260910
3/31/2003 5310010 1750710 3291990
5770980 1894920 3585380
6182690 1994760 3938000
6/30/2003 6372710 2020200 4013230
6671820 2055820 4228960
7023710 2095920 4424640
9/30/2003 6942780 2073660 4364460
7509320 2190970 4709310
7752120 2210240 4886590
12/31/2003 7945920 2326170 4994450
8234730 2368860 5176670
8393230 2401780 5256720
3/31/2004 8520020 2365550 5288310
8217120 2328410 5034300
8365050 2360360 5137050
6/30/2004 8660600 2406260 5306050
8219810 2326620 4997300
8212760 2336030 4984530
9/30/2004 8586550 2361330 5172530
8801650 2397410 5290500
9355280 2494410 5685530
12/31/2004 9654980 2579290 5908130
9446910 2516420 5709650
9713380 2569380 5838880
3/31/2005 9534520 2523880 5722590
9143940 2476010 5465200
9600220 2554800 5795900
6/30/2005 9922980 2558420 5981360
* A $50,000 investment in Columbia Acorn Fund at inception appreciated to
$158,883 on December 31, 1978, the inception date of the Russell 2500. For
comparison with the Russell 2500, we assigned the index the same value as the
Fund at index inception.
- --------------------------------------------------------------------------------
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Coach 1.4%
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
2. Chico's FAS 1.2%
WOMEN'S SPECIALTY RETAILER
3. XTO Energy 1.2%
NATURAL GAS PRODUCER
4. International Game Technology 1.2%
SLOT MACHINES & PROGRESSIVE JACKPOTS
5. AmeriCredit
1.0%
AUTO LENDING
6. Expeditors International of Washington 0.9%
INTERNATIONAL FREIGHT FORWARDER
7. Michaels Stores 0.9%
CRAFT & HOBBY SPECIALTY RETAILER
8. Western Wireless 0.9%
RURAL CELLULAR PHONE SERVICES
9. Peoples Bank of Bridgeport 0.9%
CONNECTICUT SAVINGS & LOAN
10. ITT Educational Services 0.8%
POSTSECONDARY DEGREE PROGRAMS
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
9
COLUMBIA ACORN INTERNATIONAL
>IN A NUTSHELL
[PHOTO OF P. ZACHARY EGAN] [PHOTO OF LOUIS J. MENDES III]
Columbia Acorn International finished the second quarter down 0.26%, slightly
ahead of the benchmark S&P/Citigroup EMI Global ex-US return which fell 0.40%.
The larger cap MSCI EAFE Index was down 1.01% in the quarter. Year-to-date, the
Fund is up 2.97%, which puts it 0.2% ahead of the benchmark, and 4.2% ahead of
the MSCI EAFE Index. As has been the case for several years, international
small-cap stocks continued to substantially outperform their large-cap
counterparts. 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.
Steel pipe manufacturers might seem unlikely candidates for the quarter's
biggest winners considering the poor performance of the steel sector in general,
but two of the Fund's investments, Vallourec and Tenaris, earned this
distinction by returning more than 30% to shareholders. Their specialty steel
products are critical to the successful development of oil and gas fields
globally. In the past year, both companies have seen strong volume and price
increases as high energy prices stimulated oil and gas companies to increase
spending on exploration and pipelines. These two companies have been central to
our strategy of taking advantage of an anticipated rebound in oil-field service
spending. As both companies were among the Fund's top holdings at the beginning
of the quarter, their contribution to overall return was substantial. Other
positive drivers to performance were Housing Development Finance, the Indian
mortgage finance company, which rose 25% on continued strong mortgage growth,
and SES Global, the European satellite services company, up 19%, from the
region's switch to an HDTV format.
During the quarter, the U.S. dollar reversed its recent slide against most
world currencies, appreciating more than 7% against the euro. This compounded
otherwise moderate weakness on several of our long-term European winners, such
as Nobia (kitchen cabinets), Sligro Food Group (food distribution) and United
Services Group (temporary staffing), each of which fell more than 15% in dollar
terms. Other sizable holdings negatively affecting performance came from diverse
sectors in Japan, including Funai Electric (consumer electronics), and Kappa
Create (restaurants). Funai Electric was hurt by raw material price increases
while Kappa Create's profitability remains under pressure as it works to
maintain its share of an increasingly crowded marketplace.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
PIPING PROFITS
Headquartered in Argentina, Tenaris is a global manufacturer and
supplier of seamless steel pipe products and related services. It has locations
ranging from Japan to Mexico to Italy. High oil prices are driving energy
companies to increase their exploration and production activities. With more
than 50% of its revenue coming from energy-related equipment sales, this
directly translates into more orders for the company. In addition, Tenaris
competes in a specialty niche, high-demand product category that is giving it
the pricing power to protect and expand margins even as raw material prices are
falling.
- --------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: VALLOUREC,
1.5%; TENARIS, 1.2%; HOUSING DEVELOPMENT FINANCE, 1.2%; SES GLOBAL, 1.3%; NOBIA,
0.7%; SLIGRO FOOD GROUP, 0.7%; UNITED SERVICES GROUP, 0.8%; FUNAI ELECTRIC,
0.5%; KAPPA CREATE, 0.3%.
1-800-922-6769
10
COLUMBIA ACORN INTERNATIONAL
>AT A GLANCE TICKER SYMBOL: ACINX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------
YEAR
TO DATE* 1 YEAR 5 YEARS 10 YEARS
----------------------------------------------
Returns before taxes 2.97% 22.56% 1.63% 10.73%
- --------------------------------------------------------------------------------
Returns after taxes 2.45 22.14 0.89 9.77
on distributions
- --------------------------------------------------------------------------------
Returns after taxes 1.93 14.86 1.12 9.11
on distributions and
sale of fund shares
- --------------------------------------------------------------------------------
S&P/Citigroup EMI 2.79 21.33 7.58 7.17
Global ex-US (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. The return after taxes on distributions may be higher than
the return before taxes due to qualified foreign tax credits. Indexes do not
reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 19.4%
Finance 13.8%
Information 13.6%
Other* 10.5%
Energy/Minerals 9.5%
Health Care 6.7%
Industrial Goods/Services 26.5%
* Other includes short-term obligations, cash and other assets less liabilities
of 4.0%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z)
- --------------------------------------------------------------------------------
>September 23, 1992 through June 30, 2005
This graph compares the results of $10,000 invested in Columbia Acorn
International at inception on September 23, 1992 to the S&P/Citigroup EMI Global
ex-US, Citigroup's index of the bottom 20% of institutionally investable capital
of developed and emerging countries, as selected by Citigroup, excluding the
U.S. The index is unmanaged and returns for both the index and Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV AS OF 06/30/05: $29.46
TOTAL NET ASSETS OF THE FUND: $2,268.3 MILLION
AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------
1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
22.56% 1.63% 10.73% 12.21%
[MOUNTAIN CHART]
COLUMBIA ACORN S&P/CITIGROUP EMI
INTERNATIONAL GLOBAL EX-US
------------- ------------
9/23/92 10000 10000
9/30/92 10010 10113
10380 9490
10570 9510
12/31/92 10690 9646
10780 9732
11460 10079
3/31/93 12000 11093
12450 12111
12910 12754
6/30/93 12920 12264
12920 12642
13760 13294
9/30/93 13910 13016
14560 12970
14620 11886
12/31/93 15940 12650
16630 13915
16570 14012
3/31/94 15850 13783
15960 14196
15870 13990
6/30/94 15550 14283
15980 14452
16481 14616
9/30/94 16491 14199
16522 14439
15606 13606
12/31/94 15334 13689
14640 13132
14550 12907
3/31/95 14811 13417
15264 13820
15505 13634
6/30/95 15727 13479
16582 14236
16411 13886
9/30/95 16824 13985
16300 13581
16069 13694
12/31/95 16703 14224
17357 14547
17881 14726
3/31/96 18203 15033
18787 15811
19341 15688
6/30/96 19593 15692
18968 15075
19240 15227
9/30/96 19362 15309
19553 15213
20088 15459
12/31/96 20153 15202
20636 14981
20893 15285
3/31/97 20585 15095
20287 14894
21170 15768
6/30/97 21808 16173
21951 16017
20788 15314
9/30/97 21660 15561
20487 14801
20269 14112
12/31/97 20190 13816
20476 14250
22123 15327
3/31/98 23857 16068
24351 16198
24769 16336
6/30/98 24335 15760
24491 15660
21368 13602
9/30/98 20428 13301
21111 14217
22309 14707
12/31/98 23305 15019
23842 14914
23126 14635
3/31/99 23574 15268
24984 16201
25141 15801
6/30/99 27222 16416
28191 16947
29002 17244
9/30/99 29486 17166
30759 17009
35365 17621
12/31/99 41761 18820
41607 18462
48298 19172
3/31/00 46808 19257
41359 17993
38286 17617
6/30/00 40171 18686
39669 18067
40563 18585
9/30/00 38494 17631
35630 16564
32730 15834
12/31/00 33402 16452
34915 16759
32408 16108
3/31/01 29285 14860
30419 15833
30223 15801
6/30/01 28747 15265
27591 14818
27035 14778
9/30/01 23354 12853
24467 13375
25850 13925
12/31/01 26350 14040
25708 13786
25636 14016
3/31/02 26977 14930
27862 15240
27748 15728
6/30/02 26646 15104
23854 13823
23496 13740
9/30/02 21406 12472
21492 12754
22150 13230
12/31/02 22107 13073
21562 12853
20988 12624
3/31/03 20686 12501
22567 13679
24433 14845
6/30/03 25134 15399
25681 15948
26835 16710
9/30/03 27844 17474
29979 18746
30800 19087
12/31/03 32675 20265
33641 20993
34910 21717
3/31/04 34924 22249
34175 21502
34290 21505
6/30/04 35543 22195
34625 21412
34786 21643
9/30/04 36243 22450
37555 23138
40411 24959
12/31/04 42305 26198
42699 26445
45016 27733
3/31/05 43675 27036
42334 26187
42436 26372
6/30/05 43561 26929
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Anglo Irish Bank (Ireland) 2.1%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Rhoen-Klinikum (Germany) 1.9%
HOSPITAL MANAGEMENT
3. Vallourec (France) 1.5%
SEAMLESS TUBES
4. Billabong International (Australia) 1.4%
ACTION SPORTS APPAREL BRAND MANAGER
5. Fugro (Netherlands) 1.4%
SURVEY & GPS SERVICES
6. SES Global (France) 1.3%
SATELLITE BROADCASTING SERVICES
7. Neopost (France) 1.3%
POSTAGE METER MACHINES
8. Grafton Group (Ireland) 1.2%
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
9. Housing Development Finance (India) 1.2%
PREMIER MORTGAGE LENDER IN INDIA
10. Tenaris (Argentina) 1.2%
STEEL PIPE FOR OIL WELLS & PIPELINES
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
11
COLUMBIA ACORN USA
- --------------------------------------------------------------------------------
>IN A NUTSHELL
[PHOTO OF ROBERT A. MOHN]
Small-cap stocks had a strong second quarter. Columbia Acorn USA rose 5.48%,
slightly more than the small-cap Russell 2000 Index's 4.32% increase. For the
first six months of the year, Columbia Acorn USA was up 5.48%, nicely ahead of
the Russell 2000's 1.25% decline. 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.
Industrial stocks stoked the Fund's performance for the quarter. Esco
Technologies was the biggest dollar winner for the Fund, rising 25% on news that
it will likely land a huge contract to install automated electric meter readers.
Cuno, a water filtration company, spiked 39% after announcing it was being
acquired. Many of the Fund's holdings had been attractive to larger corporate
acquirers. Cuno was the fifth company in the Fund to be bought out this year,
joining Western Wireless and Brookstone.
Rising oil prices lifted energy stocks last quarter. Our energy portfolio
was stocked with companies benefiting not only from higher commodity prices, but
also from strong internal production growth. Top holdings Quicksilver Resources,
up 31%, and Southwestern Energy, up 66%, had exciting new drilling prospects in
the Barnet and Fayetteville gas fields.
Other winners for the quarter were cellular tower owner Crown Castle
International, up 27%, and teen retailer Abercrombie & Fitch up 20%.
Our worst-performing group was technology. Software companies Kronos, down
21% and JDA Software Group, off 19%, decreased on weak March-quarter earnings
results. SeaChange International dropped 46% as sales of its video-on-demand
servers fell short. The turnaround at mobile computing and bar-code scanner
company Symbol Technologies has taken longer than hoped, sending its stock down
32% for the quarter.
The U.S. stock market has been stuck in a see-saw trading range for the
past 18 months. Flat markets like this one may not make for exciting business
headlines but were just as plentiful with investment opportunities as the good
old Roaring Nineties bull markets.
/s/ Robert A. Mohn
Robert A. Mohn
LEAD PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
THE LIGHT BURNS BRIGHT AT
- ----------------------------
GENLYTE
The Genlyte Group has been a major winner for Columbia Acorn USA, returning 66%
since its purchase in June 2004. Genlyte is a leading manufacturer of lighting
fixtures and controls and sells product through independent distributors
servicing the architect and designer community. This is a better distribution
channel than the big-box retailers, with customers willing to pay a higher price
for quality design features and service. Although the commercial construction
market has been weak for several years, Genlyte managed to grow earnings by
taking market share away from competitors and improving profitability. We
believe the company's strong market position and the potential for a recovery in
the commercial construction market makes Genlyte a solid investment.
- --------------------------------------------------------------------------------
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: ESCO
TECHNOLOGIES, 2.9%; CUNO, 1.0.%; WESTERN WIRELESS, 2.8.%; BROOKSTONE ,0.3%;
QUICKSILVER RESOURCES, 2.3%; SOUTHWESTERN ENERGY, 0.5%; CROWN CASTLE
INTERNATIONAL, 2.1%; ABERCROMBIE & Fitch, 2.0%; KRONOS, 1.1%; JDA SOFTWARE
GROUP, 1.1%; SEACHANGE INTERNATIONAL, 0.3%; SYMBOL TECHNOLOGIES, 0.6%; GENLYTE
GROUP, 1.5%.
1-800-922-6769
12
COLUMBIA ACORN USA
>AT A GLANCE TICKER SYMBOL: AUSAX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------
YEAR LIFE OF
TO DATE* 1 YEAR 5 YEARS FUND
----------------------------------------------
Returns before taxes 5.48% 15.82% 14.56% 14.58%
- --------------------------------------------------------------------------------
Returns after taxes 5.26 15.48 14.40 13.87
on distributions
- --------------------------------------------------------------------------------
Returns after taxes 3.85 10.71 12.75 12.70
on distributions and
sale of fund shares
- --------------------------------------------------------------------------------
Russell 2000 (pretax) -1.25 9.45 5.71 9.08
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. Indexes do not reflect any deduction for fees, expenses or
taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 18.0%
Health Care 14.2%
Other* 10.2%
Energy/Minerals 11.8%
Industrial Goods/Services 9.7%
Finance 8.7%
Information 27.4%
Software/Services 11.8%
Telecommunications 9.1%
Computer Related Hardware 4.4%
Media 2.1%
* Other includes short-term obligations, cash and other assets less liabilities
of 9.5%.
- --------------------------------------------------------------------------------
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z)
- --------------------------------------------------------------------------------
>September 4, 1996 through June 30, 2005
This graph compares the results of $50,000 invested in Columbia Acorn USA at
inception on September 4, 1996 to the Russell 2000 Index, a market-weighted
index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S.
companies and eliminating the largest 1,000. The index is unmanaged and returns
for both the index and the Fund include reinvested dividends and capital gains.
It is not possible to invest directly in an index. The graph and table do not
reflect tax deductions that a shareholder would pay on Fund distributions or the
sale of Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV AS OF 06/30/05: $26.21
TOTAL NET ASSETS OF THE FUND: $994.4 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------
1 YEAR 5 YEARS LIST OF FUND
15.82% 14.56% 14.58%
[MOUNTAIN CHART]
COLUMBIA ACORN
USA RUSSELL 2000
-------------- ------------
9/4/96 50000 50000
9/30/96 53600 52040
54050 51238
56300 53349
12/31/96 58250 54748
61050 55842
59600 54488
3/31/97 57400 51917
57100 52061
62550 57853
6/30/97 66600 60333
70000 63140
71750 64585
9/30/97 76700 69312
75700 66267
75850 65838
12/31/97 77066 66991
75384 65934
81602 70809
3/31/98 87005 73729
89961 74137
86138 70144
6/30/98 87625 70292
82959 64601
69680 52057
9/30/98 70756 56131
73269 58421
77012 61481
12/31/98 81525 65286
78881 66153
74474 60795
3/31/99 75080 61744
80479 67277
83674 68260
6/30/99 88251 71346
90239 69389
84109 66821
9/30/99 84330 66835
89300 67106
94050 71113
12/31/99 100295 79163
95265 77892
99337 90754
3/31/00 99098 84771
87841 79670
82631 75027
6/30/00 84170 81567
83741 78942
88826 84966
9/30/00 88213 82469
88274 78787
83129 70700
12/31/00 91276 76771
97035 80768
96851 75469
3/31/01 94523 71777
105978 77392
111920 79295
6/30/01 115045 82033
116270 77592
113084 75086
9/30/01 96728 64979
96973 68781
102732 74106
12/31/01 108851 78680
110156 77862
106428 75728
3/31/02 115499 81814
117239 82560
110653 78896
6/30/02 104005 74981
89839 63657
88535 63494
9/30/02 81949 58935
85863 60824
93319 66252
12/31/02 88721 62564
87416 60832
86236 58994
3/31/03 86422 59754
94872 65419
104813 72440
6/30/03 106490 73750
111523 78365
117674 81958
9/30/03 114940 80445
126744 87201
129540 90295
12/31/03 130534 92127
137306 96130
137928 96991
3/31/04 136996 97895
133641 92904
138984 94383
6/30/04 143395 98358
134635 91735
132709 91264
9/30/04 137804 95548
141718 97429
151969 105880
12/31/04 157448 109014
155199 104465
158198 106235
3/31/05 157448 103193
151013 97284
159385 103651
6/30/05 166084 107649
- --------------------------------------------------------------------------------
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Esco Technologies 2.9%
FILTRATION & TEST EQUIPMENT
2. AmeriCredit 2.8%
AUTO LENDING
3. Western Wireless 2.8%
RURAL CELLULAR PHONE SERVICES
4. Edwards Lifesciences 2.5%
HEART VALVES
5. Micros Systems 2.3%
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
6. Quicksilver Resources 2.3%
NATURAL GAS & COAL SEAM GAS PRODUCER
7. ITT Educational Services 2.1%
POSTSECONDARY DEGREE PROGRAMS
8. Crown Castle International 2.1%
COMMUNICATION TOWERS
9. Abercrombie & Fitch 2.0%
TEEN APPAREL RETAILER
10. HCC Insurance Holdings 1.6%
SPECIALTY INSURANCE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
13
COLUMBIA ACORN INTERNATIONAL SELECT
>IN A NUTSHELL
[PHOTO OF TODD M. NARTER] [PHOTO OF CHRISTOPHER J. OLSON]
Columbia Acorn International Select was down 0.96% for the quarter, slightly
below the S&P/Citigroup World ex-US Cap Range $2-10B Index's negative return of
0.29%. The Fund was practically in line with the large-cap MSCI EAFE Index,
which declined 1.01%. Most of these negative returns were due to a strong dollar
that offset positively performing local equity markets. Year-to-date the Fund
slightly underperformed the S&P/Citigroup World ex-US Cap Range $2-10B, posting
a 0.58% return compared to the Index's 0.79% return, and was ahead of the MSCI
EAFE negative return of 1.17%. 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.
Argentina's Tenaris, a manufacturer of seamless pipes used by oil and gas
producers and the Fund's fourth largest holding, continued its strong
performance as the stock gained a bit over 30% in the second quarter. The stock
was up 65% year-to-date. High oil prices continued to drive energy exploration
and investment, and tight capacity in the seamless pipe industry gave Tenaris
strong pricing power. Another large holding, SES Global, had a good quarter, up
19% due to continued demand for satellite services from the switch to HDTV. The
company also indicated it will launch two new satellites which will increase its
capacity even further. It also reported that it will buy back 10% of its
outstanding shares, which highlights its strong balance sheet and cash flow.
Utilities BKW Energie in Switzerland, a new holding this quarter, and Red
Electrica in Spain were strong performers as well, up 12% and 11%, respectively.
Two of the Fund's weaker performers this quarter were in Japan. Funai
Electric was down 17% as margins were squeezed by hikes in raw material prices
and there was increasing concern about the impact of a potentially stronger yen.
After a very strong first quarter, Shimano, maker of bicycle components used by
Lance Armstrong among others, gave back 15% as it guided its estimates down
modestly due to a weaker European sales environment.
In addition to BKW Energie, we also added two other new stocks, Gambro,
which manufactures dialyzers and blood collection and separation equipment, and
William Hill, a U.K. betting shop and internet gaming operator.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
JUPITER RISING
Jupiter Telecommunications, or JCOM as it's called by the locals, is the largest
cable service provider in Japan. JCOM went public in March 2005, but we were
familiar with it long before then. JCOM is partially owned by Liberty Global,
which has been a long-term holding of the Columbia Acorn Fund. Because fewer
than 10% of the households in Japan have cable TV, JCOM is growing more than 15%
annually. JCOM has finished building the network and is now able to sell a
"triple play" of cable TV, high-speed internet, and telephone service with very
little additional investment required.
- --------------------------------------------------------------------------------
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: TENARIS,
4.0%; SES GLOBAL, 3.6%; BKW ENERGIE, 1.0%; RED ELECTRICA, 2.8%; FUNAI ELECTRIC,
1.6%; SHIMANO, 2.7%; GAMBRO, 0.7%; WILLIAM HILL, 1.1%; JUPITER
TELECOMMUNICATIONS, 1.9%.
1-800-922-6769
14
COLUMBIA ACORN INTERNATIONAL SELECT
>AT A GLANCE TICKER SYMBOL: ACFFX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------
YEAR TO LIFE OF
DATE* 1 YEAR 5 YEARS FUND
----------------------------------------------
Returns before taxes 0.58% 15.96% -1.40% 9.77%
- --------------------------------------------------------------------------------
Returns after taxes 0.03 15.48 -1.50 9.62
on distributions
- --------------------------------------------------------------------------------
Returns after taxes 0.38 10.53 -1.21 8.52
on distributions and
sale of fund shares
- --------------------------------------------------------------------------------
S&P/Citigroup World 0.79 17.64 6.64 8.75
ex-US Cap Range
$2-10B (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. The return after taxes on distributions may be higher than
the return before taxes due to qualified foreign tax credits. Indexes do not
reflect any deduction for fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 20.1%
Finance 15.3%
Other* 10.3%
Information 14.5%
Energy/Minerals 6.7%
Health Care 4.8%
Industrial Goods/Services 28.3%
* Other includes short-term obligations, cash and other assets less liabilities
of 4.3%.
- --------------------------------------------------------------------------------
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT
(CLASS Z)
- --------------------------------------------------------------------------------
>November 23, 1998 through June 30, 2005
This graph compares the results of $10,000 invested in Columbia Acorn
International Select at inception on November 23, 1998 to the S&P/ Citigroup
World ex-US Cap Range $2-10B Index, a subset of Citigroup's Broad Market Index,
representing a mid-cap developed market index excluding the U.S. The index and
Fund returns include reinvested dividends and capital gains. It is not possible
to invest directly in an index. The graph and table do not reflect tax
deductions that a shareholder would pay on Fund distributions or the sale of
Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV ON 06/30/05: $17.84
TOTAL NET ASSETS OF THE FUND: $71.7 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
15.96% -1.40% 9.77%
[MOUNTAIN CHART]
S&P/CITIGROUP
COLUMBIA ACORN WORLD EX-US CAP
INTERNATIONAL SELECT RANGE $2-10B
-------------------- ---------------
11/23/1998 10000 10000
11/30/1998 10140 10045
12/31/1998 11000 10339
11790 10310
11590 10052
3/31/1999 11980 10449
12240 11032
12170 10567
6/30/1999 13110 10953
13511 11362
13771 11490
9/30/1999 13621 11530
14132 11535
16999 11864
12/31/1999 19975 12772
19665 12154
24245 12311
3/31/2000 23093 12680
21258 12172
18923 11976
6/30/2000 19853 12611
19469 12203
20266 12586
9/30/2000 19237 12168
18480 11791
16128 11440
12/31/2000 17309 11998
17874 11939
15826 11505
3/31/2001 13706 10607
14413 11391
14382 11293
6/30/2001 13763 10999
13062 10723
12778 10626
9/30/2001 10625 9392
11305 9769
11925 10118
12/31/2001 12280 10140
11650 9841
11508 9991
3/31/2002 11915 10562
12290 10756
12433 11097
6/30/2002 12047 10712
10746 9753
10950 9730
9/30/2002 10147 8859
10127 9017
10381 9476
12/31/2002 10452 9209
9944 8978
9528 8810
3/31/2003 9629 8660
10533 9425
11447 10101
6/30/2003 11527 10389
11710 10806
12218 11429
9/30/2003 12675 11900
13621 12819
13905 12927
12/31/2003 14820 13781
15094 14071
15745 14410
3/31/2004 15847 14970
15532 14460
15552 14420
6/30/2004 15958 14786
15591 14226
15591 14357
9/30/2004 16244 14818
16724 15317
17775 16528
12/31/2004 18398 17257
18266 17165
19246 17899
3/31/2005 18684 17445
18051 16941
18072 17043
6/30/2005 18506 17395
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Anglo Irish Bank (Ireland) 4.2%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Exel (United Kingdom) 4.1%
GLOBAL LOGISTICS & FREIGHT FORWARDING
3. Neopost (France) 4.0%
POSTAGE METER MACHINES
4. Tenaris (Argentina) 4.0%
STEEL PIPE FOR OIL WELLS & PIPELINES
5. SES Global (France) 3.6%
SATELLITE BROADCASTING SERVICES
6. Kuehne & Nagel (Switzerland) 3.0%
FREIGHT FORWARDING/LOGISTICS
7. Depfa Bank (Ireland) 2.9%
INTERNATIONAL PUBLIC SECTOR FINANCE
8. Komercni Banka (Czech Republic) 2.9%
LEADING CZECH UNIVERSAL BANK
9. Red Electrica (Spain) 2.8%
SPANISH POWER GRID
10. Swatch Group (Switzerland) 2.7%
WATCH & ELECTRONICS MANUFACTURER
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
15
COLUMBIA ACORN SELECT
>IN A NUTSHELL
[PHOTO OF BEN ANDREWS]
Columbia Acorn Select made up some ground from its weak first quarter. The Fund
was up 5.45% in the second quarter and gained against its benchmarks. In the
second quarter the S&P MidCap 400 Index was up 4.26% and the S&P 500 Index
gained 1.37%. Year-to-date the Fund was down 0.14% versus the S&P 400's gain of
3.85% and the S&P 500's loss of 0.81%. 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.
The Fund's biggest percentage winner for the quarter was Mine Safety
Appliances (MSA), up 27% as strong demand for combat helmets from the U.S. army
drove higher than expected earnings. The stock was a new purchase this quarter.
MSA manufactures products designed to protect the safety and health of workers
worldwide. Seven other stocks posted returns from 15% to 22% in the quarter.
On the down side Harley-Davidson lost 14% in the quarter. Harley cut
production and its earnings forecast and sales slowed for its heavy-weight
bikes. We believe this hiccup will be overcome in the next several quarters.
In addition to MSA, there were five new companies added to the portfolio
during the quarter (Conseco, Nuveen Investments, Spartech, Tribune Company, and
Worthington Industries) while three were sold (McAfee, Moodys, and Synopsys). We
also lost a fourth company when Liberty Media International purchased United
Global Communications. The combined company is now called Liberty Global and
remains in the portfolio.
We continue to search for the best risk/return investments for the Fund.
As always, we appreciate your investment in Columbia Acorn Select.
/s/ Ben Andrews
Ben Andrews
LEAD PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
THE GAS GRILL GOURMET
Worthington Industries is a steel processor and manufacturer of metal products
such as pressure cylinders (Gas grill propane tanks) and metal framing used in
commercial construction. Since 2000, Worthington has improved its manufacturing
processes, sold underperforming businesses and made accretive acquisitions.
Recent performance has been weak, as falling steel prices have hurt short-term
profits due to losses on inventory held. However, unlike the steel mills,
Worthington's long-term success is tied to volume growth rather than steel
prices. We like Worthington's prospects due to its strong market position,
reasonable valuation and opportunity for growth as the industry adopts metal
framing for residential construction. While waiting for the market to recognize
its value, we continue to collect a 4% dividend.
- --------------------------------------------------------------------------------
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE
PERFORMANCE OF EACH OF ITS HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S
TOTAL RETURN, AND MAY MAKE THE FUND'S RETURNS MORE VOLATILE THAN A MORE
DIVERSIFIED FUND. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID
THAN THE STOCKS OF LARGER COMPANIES.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: MINE SAFETY
APPLIANCES, 2.6%; HARLEY-DAVIDSON, 3.4%; CONSECO, 2.6%; NUVEEN INVESTMENTS,
2.4%; SPARTECH, 0.2%; TRIBUNE COMPANY, 1.1%; WORTHINGTON INDUSTRIES, 2.1%;
MCAFEE, 0.0%; MOODYS, 0.0%; SYNOPSYS, 0.0%; LIBERTY MEDIA INTERNATIONAL, 0.0%;
UNITED GLOBAL COMMUNICATIONS, 0.0%; LIBERTY GLOBAL, 2.8%.
1-800-922-6769
16
COLUMBIA ACORN SELECT
>AT A GLANCE TICKER SYMBOL: ACTWX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------
YEAR LIFE OF
TO DATE* 1 YEAR 5 YEARS FUND
----------------------------------------------
Returns before taxes -0.14% 10.23% 10.71% 14.04%
- --------------------------------------------------------------------------------
Returns after taxes -0.27 9.75 10.51 13.53
on distributions
- --------------------------------------------------------------------------------
Returns after taxes on -0.01 7.19 9.29 12.20
distributions and sale
of fund shares
- --------------------------------------------------------------------------------
S&P MidCap 400 3.85 14.03 8.49 11.79
(pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. Indexes do not reflect any deduction for fees, expenses or
taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Information 26.3%
Other* 9.4%
Finance 17.1%
Industrial Goods/Services 8.7%
Energy/Minerals 4.1%
Health Care 5.0%
Consumer Goods/Services 29.4%
* Other includes short-term obligations, cash and other assets less liabilities
of 9.4%.
- --------------------------------------------------------------------------------
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z)
- --------------------------------------------------------------------------------
>November 23, 1998 through June 30, 2005
This graph compares the results of $50,000 invested in Columbia Acorn Select at
inception on November 23, 1998 to the S&P MidCap 400, a broad, market-weighted
index of 400 stocks that are in the next size/tier down from the S&P 500. The
Index is unmanaged and returns for both the index and the Fund include
reinvested dividends and capital gains. It is not possible to invest directly in
an index. The graph and table do not reflect tax deductions that a shareholder
would pay on Fund distributions or the sale of Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV ON 06/30/05: $20.97
TOTAL NET ASSETS OF THE FUND: $1,510.5 MILLION
AVERAGE ANNUAL TOTAL RETURN
---------------------------------------
1 YEAR 5 YEARS LIFE OF FUND
10.23% 10.71% 14.04%
[MOUNTAIN CHART]
COLUMBIA S&P
ACORN SELECT MIDCAP 400
------------ ----------
11/23/1998 50000.00 50000.00
11/30/1998 50150.00 49556.40
12/31/1998 53550.00 55544.50
55000.00 53381.10
53550.00 50586.20
3/31/1999 57400.00 51999.30
63550.00 56101.00
63650.00 56344.20
6/30/1999 65200.00 59360.90
65950.00 58099.50
60300.00 56108.40
9/30/1999 60550.00 54375.40
64850.00 57146.40
66250.00 60145.80
12/31/1999 69240.00 63720.60
67370.00 61925.80
67774.30 66259.90
3/31/2000 70857.30 71805.50
67319.40 69298.10
65500.00 68433.40
6/30/2000 71599.00 69438.50
69656.60 70535.50
77156.40 78410.90
9/30/2000 78990.90 77874.10
79638.30 75233.30
71908.20 69554.50
12/31/2000 77325.90 74875.50
79569.70 76543.10
74918.10 72174.90
3/31/2001 72017.70 66808.90
77271.20 74178.90
81485.00 75906.50
6/30/2001 80116.90 75600.00
79350.80 74473.80
75629.50 72038.00
9/30/2001 71032.60 63077.40
72564.90 65867.60
80116.90 70767.50
12/31/2001 83512.60 74423.30
81867.50 74036.70
80112.80 74127.80
3/31/2002 82909.40 79426.80
78413.00 79055.40
80716.00 77722.10
6/30/2002 79345.20 72033.50
74300.40 65055.90
76109.90 65383.20
9/30/2002 72600.60 60115.60
76603.50 62720.50
80441.90 66349.10
12/31/2002 76987.30 63622.60
76658.30 61763.30
76877.60 60292.40
3/31/2003 78413.00 60800.60
82909.40 65214.90
87405.80 70619.60
6/30/2003 89708.80 71519.70
94040.70 74057.40
97934.00 77416.70
9/30/2003 95795.40 76231.50
99304.80 81995.60
98592.00 84852.30
12/31/2003 100555.00 86284.10
103317.00 88154.00
106024.00 90270.80
3/31/2004 105969.00 90654.10
102930.00 87678.50
104588.00 89497.20
6/30/2004 108013.00 91534.20
103317.00 87263.00
102488.00 87034.60
9/30/2004 104754.00 89612.10
108842.00 91045.90
115527.00 96467.80
12/31/2004 119233.00 100507.00
115057.00 97941.70
113534.00 101227.00
3/31/2005 112913.00 100107.00
108850.00 96216.00
114154.00 102010.00
6/30/2005 119063.00 104375.00
- --------------------------------------------------------------------------------
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. ITT Educational Services 5.5%
POSTSECONDARY DEGREE PROGRAMS
2. Tellabs 5.1%
TELECOMMUNICATIONS EQUIPMENT
3. Safeway 4.5%
RETAIL FOOD & DRUG STORES
4. Abercrombie & Fitch 4.4%
TEEN APPAREL RETAILER
5. Harley-Davidson 3.4%
MOTORCYCLES & RELATED MERCHANDISE
6. TCF Financial 3.4%
GREAT LAKES BANK
7. American Tower 3.3%
COMMUNICATION TOWERS IN USA & MEXICO
8. Pride International 3.2%
OFFSHORE DRILLING CONTRACTOR
9. Coach 3.1%
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
10. Liberty Global 2.8%
CATV HOLDING COMPANY
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
17
COLUMBIA THERMOSTAT FUND
>IN A NUTSHELL
[PHOTO OF RALPH WANGER] [PHOTO OF CHARLES P. MCQUAID]
Columbia Thermostat Fund was up 2.62% for the quarter and ended the six months
up 1.44%. These returns were better than the Lipper Flexible Portfolio Funds
Index and easily outperformed the S&P 500 Index, and were close to the Lehman
Brothers U.S. Credit Intermediate Bond Index over the same time periods. (See
Page 2 for results). 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.
- --------------------------------------------------------------------------------
RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND
Equities
2ND SIX-MONTH
WEIGHTINGS QUARTER RETURNS TO
IN CATEGORY RETURNS 6/30/05
- --------------------------------------------------------------------------------
Columbia 21% 4.07% 2.78%
Acorn Fund
- --------------------------------------------------------------------------------
Columbia 15% 5.45% -0.14%
Acorn Select
- --------------------------------------------------------------------------------
Columbia Growth 24% -0.58% -4.32%
Stock Fund
- --------------------------------------------------------------------------------
Columbia Growth 25% 0.61% 0.55%
& Income Fund
- --------------------------------------------------------------------------------
Columbia Mid Cap 15% 2.78% 3.74%
Value Fund
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE
EQUITY RETURN 100% 2.08% 0.16%
- --------------------------------------------------------------------------------
Fixed Income
2ND SIX-MONTH
WEIGHTINGS QUARTER RETURNS TO
IN CATEGORY RETURNS 6/30/05
- --------------------------------------------------------------------------------
Columbia Federal 30% 3.04% 2.74%
Securities Fund
- --------------------------------------------------------------------------------
Columbia Intermediate 50% 2.65% 2.18%
Bond Fund
- --------------------------------------------------------------------------------
Columbia High 20% 3.02% 1.18%
Yield Fund
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE 100% 2.84% 2.15%
INCOME RETURN
- --------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND
REBALANCING IN THE SECOND QUARTER
- --------------------------------------------------------------------------------
APRIL 14, 2005: 50% stock, 50% bond
MAY 18, 2005: 45% stock, 55% bond
JUNE 1, 2005: 40% stock, 60% bond
- --------------------------------------------------------------------------------
The first six-months of 2005 favored the Fund's small- and mid-cap stock
funds, with the Columbia Mid Cap Value Fund delivering the best performance with
a 3.74% return for the six-month period and 2.78% return for the quarter.
Columbia Acorn Fund also contributed to performance delivering a 2.78% return
year-to-date and a 4.07% return for the quarter. Despite the good performance
from the small- and mid-cap funds, the equity portion was hurt by the negative
year-to-date 4.32% return of Columbia Growth Stock Fund and its 0.58% loss for
the quarter. Overall, Thermostat's bond portfolio, up 2.15%, outperformed the
equity portion's return of 0.16%.
As noted in the table below, the Fund had three reallocation triggers
during the second quarter. We increased stock exposure in the portfolio in
April. In May and June we increased the portfolio's bond exposure.
Assets in Columbia Thermostat were just over $206 million at the end of
the first half of 2005. With the Fund's third anniversary approaching on
September 25, we have been pleased with the Fund's low-risk result and steady
inflows. The Fund has performed as expected in the broad trading-range market we
have experienced since its inception. We continue to believe Columbia
Thermostat's investment strategy should keep a portion of your portfolio at an
even temperature despite ongoing market volatility.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF
THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG
THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING
STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS
DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY
ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL- AND MID-CAP STOCKS
MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE
VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN
INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED
BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO
THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND
PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A
FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY
AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER
TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE
SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
1-800-922-6769
18
COLUMBIA THERMOSTAT FUND
>AT A GLANCE TICKER SYMBOL: COTZX
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z)
- --------------------------------------------------------------------------------
>through June 30, 2005
-------------------------------------------
YEAR TO LIFE OF
DATE* 1 YEAR FUND
-------------------------------------------
Returns before taxes 1.44% 7.79% 12.39%
- --------------------------------------------------------------------------------
Returns after taxes 0.92 6.45 11.71
on distributions
- --------------------------------------------------------------------------------
Returns after taxes on distribu- 1.08 5.26 10.32
tions and sale of fund shares
- --------------------------------------------------------------------------------
S&P 500 (pretax) -0.81 6.32 16.57
- --------------------------------------------------------------------------------
Lehman U.S. Credit Intermediate 1.56 5.79 5.67
Bond Index (pretax)
- --------------------------------------------------------------------------------
Lipper Flexible Portfolio Funds -0.36 6.70 13.52
Index (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the tax impact of gains or losses realized when fund shares are
sold. The returns are taxed at the maximum rate and assume shares were purchased
at the beginning of the period. Actual after-tax returns depend on the
investor's tax situation and may differ from those shown. After-tax returns are
not relevant to investors who hold their fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts. After-tax
returns are shown for class Z shares only; after-tax returns for other share
classes will vary. Indexes do not reflect any deduction for fees, expenses or
taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
* Year to date data not annualized.
- --------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
- --------------------------------------------------------------------------------
>as a % of assets in each investment category, as of June 30, 2005
[PIE CHART]
STOCK MUTUAL FUNDS
Columbia Acorn Fund 21%
Columbia Acorn Select 15%
Columbia Growth stock Fund 24%
Columbia Growth & Income Fund 25%
Columbia Mid Cap Value Fund 15%
[PIE CHART]
BOND MUTUAL FUNDS
Columbia Federal Securities Fund 30%
Columbia Intermediate Bond Fund 50%
Columbia High Yield Fund 20%
- --------------------------------------------------------------------------------
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS Z)
- --------------------------------------------------------------------------------
>September 25, 2002 through June 30, 2005
This graph compares the results of $10,000 invested in Columbia Thermostat Fund
at inception on September 25, 2002 to three indexes. The S&P 500 is a broad,
market-weighted average of U.S. blue-chip company stock performance. The Lehman
U.S. Credit Intermediate Bond Index is the intermediate component of the U.S.
Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and
foreign debentures and secured notes that meet specified maturity, liquidity,
and quality requirements. The Lipper Flexible Portfolio Funds Index is an equal
dollar weighted index of the 30 largest mutual funds within the Flexible
Portfolio fund classification, as defined by Lipper. The Indexes are unmanaged
and returns for the indexes and the Fund include reinvested dividends and
capital gains. It is not possible to invest directly in an index. The graph and
table do not reflect tax deductions that a shareholder would pay on Fund
distributions or the sale of Fund shares.
PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT
COLUMBIAFUNDS.COM FOR DAILY AND MONTH-END UPDATES.
NAV ON 06/30/05: $13.06
TOTAL NET ASSETS OF THE FUND: $206.3 MILLION
AVERAGE ANNUAL TOTAL RETURN
-------------------------------
1 YEAR LIFE OF FUND
7.79% 12.39%
[MOUNTAIN CHART]
COLUMBIA LEHMAN U.S. CREDIT LIPPER FLEXIBLE
THERMOSTAT FUND S&P 500 INTERMEDIATE BOND PORTFOLIO
--------------- ------- ------------------ ---------------
9/25/2002 10000 10000 10000 10000
9/30/2002 9850 9956 10043 10003
10220 10832 9962 10512
10700 11469 10045 10959
12/31/2002 10410 10796 10307 10579
10260 10513 10335 10398
10100 10355 10517 10294
3/31/2003 10190 10456 10539 10360
10710 11317 10684 10952
11200 11913 10957 11490
6/30/2003 11348 12065 10963 11609
11418 12278 10626 11663
11648 12517 10659 11902
9/30/2003 11618 12384 10976 11912
12018 13085 10878 12380
12149 13200 10911 12510
12/31/2003 12471 13892 11019 13015
12643 14147 11108 13202
12785 14344 11231 13380
3/31/2004 12835 14128 11330 13323
12572 13906 11041 12989
12612 14097 10971 13079
6/30/2004 12813 14371 11011 13308
12620 13895 11123 12952
12701 13951 11339 13014
9/30/2004 12863 14102 11381 13225
13076 14318 11468 13407
13391 14897 11367 13885
12/31/2004 13614 15404 11469 14252
13520 15029 11502 14024
13645 15345 11440 14288
3/31/2005 13458 15073 11335 14035
13344 14787 11460 13778
13676 15258 11581 14096
6/30/2005 13810 15279 11648 14200
- --------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Stock Mutual Funds 39.9%
Bond Mutual Funds 59.9%
Cash and other Assets less Liabilities 0.2%
19
COLUMBIA ACORN FUND
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
INFORMATION
Advantech (Taiwan) 7,416,000 9,300,000
American Tower 3,000,000 3,500,000
Amis Holdings 0 1,071,000
ASE Test (Taiwan) 1,410,100 2,101,700
Cnet Networks 0 1,135,000
Crown Castle International 4,000,000 4,500,000
CTS 1,626,000 1,870,000
Diebold 0 375,000
Fair Isaac 1,110,000 1,316,000
Littelfuse 785,000 915,000
Navigant Consulting 1,336,000 1,836,000
Navteq 0 500,000
Novatek Microelectronics (Taiwan) 0 2,600,000
Outdoor Channel 0 460,000
RSA Security 2,000,000 3,000,000
SSA Global Technologies 0 928,000
Tellabs 9,300,000 9,540,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Aeropostale 2,265,000 2,300,000
Ann Taylor 1,093,000 1,223,000
Chico's FAS 4,990,000 5,090,000
Coinstar 1,290,000 1,440,000
Four Seasons Hotels (Canada) 0 314,000
Genesco 700,000 775,000
Knoll 777,000 1,384,000
Paddy Power (Ireland) 0 650,000
Petco Animal Supplies 1,245,000 1,445,000
Polaris Industries 550,000 850,000
Prestige Brands 350,000 657,000
Shimano (Japan) 610,000 780,000
Speedway Motorsports 553,000 933,000
Sports Authority 1,480,000 1,520,000
Vail Resorts 1,635,000 2,110,000
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Aalberts Industrie
(Netherlands) 740,000 755,000
Administaff 1,150,000 1,300,000
Carbone Lorraine (France) 200,000 260,000
Drew Industries 0 390,000
Forward Air 1,500,000 2,000,000
(INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT)
Gardner Denver 785,000 1,140,000
Genlyte Group 1,528,000 1,600,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Hexagon (Sweden) 30,000 120,000
(INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT)
Kaydon 553,000 1,100,000
Mine Safety Appliances 1,300,000 1,440,000
Nordson 600,000 1,297,000
Quanta Services 1,700,000 2,481,000
Simpson 1,200,000 1,450,000
Spartech 3,000,000 3,150,000
Ultrapar (Brazil) 0 750,000,000
United Services Group
(Netherlands) 675,000 740,000
Worthington Industries 1,050,000 1,700,000
- ----------------------------------------------------------------------------
FINANCE
Assurant 0 715,000
Independent Bank 152,000 252,000
Nuveen Investments 965,000 1,290,000
Paragon Group (United Kingdom) 0 1,950,000
Provident Bancorp 160,000 360,000
Scottish Re Group 1,250,000 1,500,000
United America Indemnity 700,000 1,300,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 2,300,000 2,350,000
Fugro (Netherlands) 0 1,365,000
(INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT)
McMoran Exploration 1,100,000 1,200,000
Pride International 2,100,000 2,300,000
Sociedad Quimica Y Minera
de Chile (Chile) 32,800 275,000
Tipperary 2,265,000 2,320,000
Veritas DGC 374,000 700,000
Western Gas 3,000,000 3,200,000
1-800-922-6769
20
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
ADDITIONS (CONTINUED)
- ----------------------------------------------------------------------------
HEALTH CARE
Advanced Medical Optics 0 552,000
Arrow International 655,000 851,000
Cytokinetics 0 705,000
CYTYC 861,000 1,150,000
Datascope 0 261,000
Decode Genetics 0 1,900,000
Dendrite International 1,333,000 2,033,000
Exelixis 888,000 2,000,000
Intermagnetics General 750,000 1,180,000
Lexicon Genetics 2,000,000 3,100,000
Martek Biosciences 519,000 900,000
NPS Pharmaceuticals 776,000 1,176,000
Rigel Pharmaceuticals 0 675,000
Seattle Genetics 0 2,300,000
Serologicals 700,000 1,200,000
Tanox 0 1,500,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Diamondrock Hospitality 1,000,000 1,303,000
Gaylord Entertainment 0 475,000
Heartland Express 980,000 1,500,000
Kite Realty Group 0 717,000
SALES
- ----------------------------------------------------------------------------
INFORMATION
3Com 2,900,000 0
Corus Entertainment (Canada) 710,000 0
FTI Consulting 1,000,000 162,000
Global Payments 1,432,000 1,407,000
Insight Communications 2,700,000 2,430,000
International Game Technology 6,700,000 6,000,000
MAPICS 2,200,000 0
McAfee 1,448,000 0
Pericom Semiconductor 521,000 68,000
Radiant Systems 1,575,000 1,542,000
Trimble Navigation 1,200,000 1,000,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
AFC Enterprises 2,000,000 1,700,000
Amer Sports 1,110,000 0
Autogrill (Italy) 1,447,000 0
Esprit Holdings (Hong Kong) 2,250,000 0
Hunter Douglas (Netherlands) 248,000 0
Kappa Create (Japan) 388,000 366,000
Masonite International (Canada) 465,000 0
Monaco Coach 1,000,000 762,000
SCP Pool 1,989,000 1,689,000
Station Casinos 890,000 745,000
Wacoal (Japan) 1,000,000 789,000
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
SALES (CONTINUED)
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Cobham (United Kingdom) 500,000 0
Dominion Homes 572,000 0
Hub Group 304,000 0
Schulman 1,000,000 336,000
- ----------------------------------------------------------------------------
FINANCE
Anglo Irish Bank (Ireland) 6,657,588 6,243,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
BankFirst 19,000 0
Credito Emiliano (Italy) 1,000,000 0
Cullen Frost Bankers 370,000 0
Den Norske Bank (Norway) 2,150,000 1,670,000
FirstFed Financial 76,000 0
Midwest Bank 170,000 18,000
Stewart Information Services 340,000 0
Texas Regional Bancshares 1,190,000 0
Washington Federal 1,605,000 1,285,000
World Acceptance 1,820,000 1,700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Equitable Resources 1,600,000 1,200,000
Hanover Compressor 1,200,000 0
Petrokazakhstan (Canada) 680,000 662,800
Quicksilver Resources 700,000 0
XTO Energy 9,000,000 5,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
Ciphergen Biosystems 1,708,000 0
CTI Molecular Imaging 1,900,000 0
Myriad Genetics 460,000 0
SYRRX, Series C 461,000 0
VISX 1,000,000 0
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Allied Waste Industries 2,500,000 0
21
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 92.4%
- ------------------------------------------------------------------------------
INFORMATION: 21.9%
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 3.6%
1,900,000 Micros Systems (b) $ 85,025
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
11,500,000 Novell (b) 71,300
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
1,478,000 Kronos (b) 59,696
LABOR MANAGEMENT SOLUTIONS
847,000 Avid Technology (b) 45,128
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
3,448,000 Aspect Communications (b)(c) 38,721
CALL CENTER SOFTWARE
2,000,000 MRO Software (b)(c) 29,220
ENTERPRISE MAINTENANCE SOFTWARE
1,521,000 Sybase (b) 27,910
DATABASE SOFTWARE
2,200,000 JDA Software Group (b)(c) 25,036
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,300,000 Witness Systems (b) 23,699
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
6,700,000 E.Piphany (b)(c) 23,316
CRM SOFTWARE
1,542,000 Radiant Systems (b)(c) 17,579
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
460,000 Maximus 16,233
OUTSOURCER FOR LOCAL GOVERNMENT
3,000,000 Lawson Software (b) 15,450
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
5,000,000 Indus International (b)(c) 12,300
600,000 Indus International (b)(c) 1,476
ENTERPRISE ASSET MANAGEMENT SOFTWARE
6,000,000 Actuate (b)(c) 11,220
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
928,000 SSA Global Technologies (b) 11,136
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
1,250,000 ClickSoftware Technologies (b) 2,338
SERVICE CHAIN OPTIMIZATION SOFTWARE
- ------------------------------------------------------------------------------
516,783
>BUSINESS INFORMATION/BUSINESS
SERVICES/ PUBLISHING: 1.8%
1,200,000 Getty Images (b) 89,112
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
1,316,000 Fair Isaac 48,034
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
1,836,000 Navigant Consulting (b) 32,424
FINANCIAL CONSULTING FIRM
2,685,000 InfoUSA (c) 31,415
BUSINESS DATA FOR SALES LEADS
1,395,000 Ceridian (b) 27,175
HR SERVICES & PAYMENT PROCESSING
500,000 Navteq (b) 18,590
MAP DATA FOR ELECTRONIC DEVICES
350,000 Dex Media 8,544
YELLOW PAGES PUBLISHER
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
1,700,000 PRIMEDIA (b) $ 6,885
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
162,000 FTI Consulting (b) 3,386
FINANCIAL CONSULTING FIRM
- ------------------------------------------------------------------------------
265,565
>TRANSACTION PROCESSORS: 1.0%
1,407,000 Global Payments 95,395
CREDIT CARD PROCESSOR
9,000,000 Hong Kong Exchanges & Clearing
(Hong Kong) 23,312
HONG KONG EQUITY & DERIVATIVES OPERATOR
1,250,000 Pegasus Systems (b)(c) 13,938
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
600,000 Cubic 10,644
REVENUE COLLECTION & DEFENSE SYSTEMS
- ------------------------------------------------------------------------------
143,289
>ELECTRONICS DISTRIBUTION: 0.9%
2,325,000 Avnet (b) 52,382
ELECTRONIC COMPONENTS DISTRIBUTION
730,000 CDW 41,676
TECHNOLOGY RESELLER
680,000 Tech Data (b) 24,895
I/T DISTRIBUTOR
710,000 Agilysys 11,147
I/T DISTRIBUTOR
- ------------------------------------------------------------------------------
130,100
>INTERNET: 0.8%
3,000,000 RSA Security (b) 34,440
ENTERPRISE SECURITY SOFTWARE
9,500,000 Skillsoft Publishing (b)(c) 32,775
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
2,000,000 ValueClick (b) 24,660
INTERNET ADVERTISING
1,135,000 Cnet Networks (b) 13,325
INTERNET ADVERTISING ON NICHE WEBSITES
1,400,000 DoubleClick (b) 11,746
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
1,879,808 Vital Stream, Cl. C (b) 1,352
STREAMING SERVICES FOR THE INTERNET
- ------------------------------------------------------------------------------
118,298
>COMPUTER SERVICES: 0.6%
4,000,000 Bearing Point (b) 29,320
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
5,000,000 Igate Capital (b)(c) 17,900
I/T & BPO OUTSOURCING SERVICES
4,600,000 AnswerThink Consulting (b)(c) 16,330
I/T INTEGRATION & BEST PRACTICE RESEARCH
2,000,000 Ciber (b) 15,960
SOFTWARE SERVICES & STAFFING
2,300,000 Analysts International (b)(c) 7,866
TECHNOLOGY STAFFING SERVICES
1,025,000 New Horizons Worldwide (b)(c) 3,587
COMPUTER TRAINING SERVICES
- ------------------------------------------------------------------------------
90,963
1-800-922-6769
22
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>CONSUMER SOFTWARE: 0.3%
1,333,000 Activision (b) $ 22,021
ENTERTAINMENT SOFTWARE
700,000 THQ (b) 20,489
ENTERTAINMENT SOFTWARE
- ------------------------------------------------------------------------------
42,510
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.4%
1,525,000 Unova (b) 40,611
BARCODE & WIRELESS LAN SYSTEMS
371,900 Neopost (France) 32,686
POSTAGE METER MACHINES
1,070,000 Avocent (b) 27,970
COMPUTER CONTROL SWITCHES
660,000 Rogers (b) 26,763
PCB LAMINATES & HIGH PERFORMANCE FOAMS
1,173,000 Belden CDT 24,868
SPECIALTY CABLE
1,870,000 CTS (c) 22,982
ELECTRONIC COMPONENTS, SENSORS & EMS
9,300,000 Advantech (Taiwan) 21,919
EMBEDDED COMPUTERS
2,100,000 Symbol Technologies 20,727
MOBILE COMPUTERS & BARCODE SCANNERS
1,070,000 II VI (b) 19,677
LASER COMPONENTS
230,000 Wincor Nixdorf (Germany) 18,791
RETAIL POS SYSTEMS & ATM MACHINES
400,000 Zebra Technologies (b) 17,516
BAR CODE PRINTERS
375,000 Diebold 16,916
AUTOMATED TELLER MACHINES
625,000 Excel Technologies (b)(c) 15,188
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
1,875,000 SeaChange International (b)(c) 13,163
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
480,000 Applied Films (b) 12,288
THIN-FILM GLASS COATING EQUIPMENT
5,000,000 Concurrent Computer (b)(c) 10,650
VIDEO ON DEMAND SYSTEMS & SERVICES
6,800,000 Phoenixtec Power (Taiwan) 7,295
UNINTERRUPTIBLE POWER SUPPLIES
- ------------------------------------------------------------------------------
350,010
>SEMICONDUCTORS/RELATED EQUIPMENT: 1.4%
1,510,000 Integrated Circuit Systems (b) 31,166
SILICON TIMING DEVICES
1,835,000 Semtech (b) 30,553
ANALOG SEMICONDUCTORS
1,905,000 IXYS (b)(c) 27,013
POWER SEMICONDUCTORS
915,000 Littelfuse (b) 25,483
LITTLE FUSES
2,000,000 Entegris (b) 19,800
SEMICONDUCTOR WAFER SHIPPING & HANDLING PRODUCTS
1,071,000 Amis Holdings (b) 14,287
ANALOG & MIXED: SIGNAL SEMICONDUCTORS
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
10,000,000 Sunplus Technology (Taiwan) $ 13,997
FABLESS SEMICONDUCTOR DESIGNER
2,101,700 ASE Test (Taiwan) (b) 13,535
SEMICONDUCTOR PACKAGING & TEST SERVICES
2,600,000 Novatek Microelectronics (Taiwan) 11,055
LCD RELATED IC DESIGNER
565,000 Supertex (b) 9,978
MIXED-SIGNAL SEMICONDUCTORS
361,000 Actel (b) 5,018
FIELD PROGRAMMABLE GATE ARRAYS
68,000 Pericom Semiconductor (b) 554
INTERFACE INTEGRATED CIRCUITS
- ------------------------------------------------------------------------------
202,439
>GAMING EQUIPMENT: 1.4%
6,000,000 International Game Technology 168,900
SLOT MACHINES & PROGRESSIVE JACKPOTS
1,050,000 Shuffle Master (b) 29,432
CARD SHUFFLERS & CASINO GAMES
- ------------------------------------------------------------------------------
198,332
>INSTRUMENTATION: 0.9%
1,000,000 Trimble Navigation (b) 38,970
GPS-BASED INSTRUMENTS
711,000 Dionex (b) 31,007
ION & LIQUID CHROMATOGRAPHY
600,000 Mettler Toledo (b) 27,948
LABORATORY EQUIPMENT
2,300,000 Spectris (United Kingdom) 20,346
ELECTRONIC INSTRUMENTATION & CONTROLS
428,000 Varian (b) 16,174
ANALYTICAL INSTRUMENTS
- ------------------------------------------------------------------------------
134,445
>CONTRACT MANUFACTURING: 0.5%
1,855,000 Jabil Circuit (b) 57,004
ELECTRONIC MANUFACTURING SERVICES
1,536,000 Plexus (b) 21,857
ELECTRONIC MANUFACTURING SERVICES
- ------------------------------------------------------------------------------
78,861
TELECOMMUNICATIONS
>TELECOMMUNICATION SERVICES: 2.7%
3,000,000 Western Wireless (b) 126,900
RURAL CELLULAR PHONE SERVICES
4,500,000 Crown Castle International (b) 91,440
COMMUNICATION TOWERS
3,500,000 American Tower (b) 73,570
COMMUNICATION TOWERS IN USA & MEXICO
800,000 Commonwealth Telephone 33,528
RURAL PHONE FRANCHISES & CLEC
780,000 Telephone & Data Systems 31,832
780,000 Telephone & Data Systems, Cl. S 29,905
CELLULAR & TELEPHONE SERVICES
- ------------------------------------------------------------------------------
387,175
>TELECOMMUNICATIONS EQUIPMENT: 1.2%
9,540,000 Tellabs (b) 82,998
TELECOMMUNICATIONS EQUIPMENT
2,750,000 Andrew (b) 35,090
WIRELESS INFRASTRUCTURE EQUIPMENT
23
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>TELECOMMUNICATIONS EQUIPMENT--CONTINUED
960,000 Plantronics $ 34,906
COMMUNICATION HEADSETS
1,510,000 Symmetricom (b) 15,659
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ------------------------------------------------------------------------------
168,653
MEDIA
>TELEVISION PROGRAMMING/CATV: 1.3%
1,700,000 Liberty Global (formerly known as
Liberty Media International) (b) 79,339
CATV HOLDING COMPANY
35,506 Jupiter Telecommunications (Japan) (b) 29,835
LARGEST CABLE SERVICE PROVIDER IN JAPAN
2,430,000 Insight Communications (b) 26,852
CATV FRANCHISES IN MIDWEST
2,605,000 Liberty Media (b) 26,545
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
1,250,000 Mediacom Communications (b) 8,588
CABLE TELEVISION FRANCHISES
333,000 Alliance Atlantis Communication (b)
(Canada) 7,814
CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION
460,000 Outdoor Channel (b) 6,330
CABLE TELEVISION PROGRAMMING
- ------------------------------------------------------------------------------
185,303
>TV/SATELLITE BROADCASTING: 0.7%
3,307,000 SES Global (France) 49,778
SATELLITE BROADCASTING SERVICES
1,750,000 Gray Television 21,105
MID MARKET AFFILIATED TV STATIONS
2,200,000 Entravision Communications (b) 17,138
SPANISH LANGUAGE TV, RADIO & OUTDOOR
270,000 Metropole TV (France) 6,840
TELEVISION BROADCASTER
200,000 Young Broadcasting (b) 830
TELEVISION STATIONS
- ------------------------------------------------------------------------------
95,691
>RADIO BROADCASTING: 0.4%
1,291,000 Salem Communications (b) 25,613
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
1,200,000 Cumulus Media, Cl. A (b) 14,136
RADIO STATIONS IN SMALL CITIES
992,000 Saga Communications (b) 13,888
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,200,000 Spanish Broadcasting (b) 11,988
SPANISH LANGUAGE RADIO STATIONS
- ------------------------------------------------------------------------------
65,625
-----------
INFORMATION: TOTAL 3,174,042
- ------------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 21.0%
SERVICES
>RETAIL: 6.8%
5,090,000 Chico's FAS (b) 174,485
WOMEN'S SPECIALTY RETAILER
3,200,000 Michaels Stores 132,384
CRAFT & HOBBY SPECIALTY RETAILER
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
1,245,000 Abercrombie & Fitch $ 85,531
TEEN APPAREL RETAILER
2,300,000 Aeropostale (b) 77,280
MALL BASED TEEN RETAILER
3,743,000 Christopher & Banks (c) 68,347
WOMEN'S APPAREL RETAILER
1,400,000 Williams Sonoma (b) 55,398
HOME GOODS & FURNISHING RETAILER
1,520,000 Sports Authority (b)(c) 48,336
SPORTING GOODS STORES
826,000 Urban Outfitters (b) 46,826
APPAREL & HOME SPECIALTY RETAILER
1,445,000 Petco Animal Supplies (b) 42,367
PET SUPPLIES & SERVICES
1,072,000 Zale (b) 33,972
SPECIALTY RETAILER OF JEWELRY
1,300,000 Borders Group 32,903
BOOKSTORES
1,223,000 Ann Taylor (b) 29,694
WOMEN'S APPAREL RETAILER
775,000 Genesco (b) 28,745
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
230,000 Whole Foods Market 27,209
NATURAL FOOD SUPERMARKETS
1,370,000 Hot Topic (b) 26,194
MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES &
GIFTS
958,000 Brookstone (b) 18,087
SPECIALTY CONSUMER PRODUCT RETAILER
955,000 West Marine (b) 17,247
LARGEST RETAILER OF BOATING SUPPLIES
300,000 Fast Retailing (Japan) 15,557
APPAREL RETAILER
350,000 Edgars Consolidated Stores
(South Africa) 15,183
LEADING RETAIL CONGLOMERATE
1,062,000 Gaiam (b)(c) 7,392
HEALTHY LIVING CATALOGS & E-COMMERCE
$ 6,000 Gadzooks 5% Convertible 10/07/08 (d)(f) 0
TEEN APPAREL RETAILER
- ------------------------------------------------------------------------------
983,137
>CONSUMER SERVICES: 1.7%
2,250,000 ITT Educational Services (b) 120,195
POSTSECONDARY DEGREE PROGRAMS
775,000 Weight Watchers (b) 39,998
WEIGHT LOSS PROGRAMS
1,440,000 Coinstar (b)(c) 32,674
OWNER/OPERATOR OF COIN COUNTING MACHINES
1,530,000 Central Parking 21,037
OWNER, OPERATOR & MANAGER OF PARKING LOTS &
GARAGES
870,000 Park 24 (Japan) 17,186
PARKING LOT OPERATOR
1,850,000 Princeton Review (b)(c) 10,786
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 7,614
NATIONAL CHAIN OF FITNESS CENTERS
- ------------------------------------------------------------------------------
249,490
1-800-922-6769
24
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>CASINOS: 1.3%
745,000 Station Casinos $ 49,468
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 40,784
REGIONAL RIVERBOAT CASINOS
2,750,000 Alliance Gaming (b)(c) 38,555
DIVERSIFIED GAMING COMPANY
1,925,000 Pinnacle Entertainment (b) 37,653
REGIONAL RIVERBOAT CASINOS
4,500,000 Sky City Entertainment (New Zealand) 13,985
CASINO/ENTERTAINMENT COMPLEX
226,000 Lakes Entertainment (b) 3,480
NATIVE AMERICAN CASINO DEVELOPMENT
- ------------------------------------------------------------------------------
183,925
>TRAVEL: 1.3%
2,110,000 Vail Resorts (b)(c) 59,291
OWNER/OPERATOR OF SKI RESORTS
1,814,500 Intrawest (Canada) 43,452
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 31,535
OWNER/FRANCHISER OF MID-PRICED HOTELS
314,000 Four Seasons Hotels (Canada) 20,755
LUXURY HOTEL OPERATOR
1,045,000 Navigant International (b)(c) 15,351
CORPORATE TRAVEL AGENCY
698,000 Jurys Doyle Hotel (Ireland) 13,088
OWNER/OPERATOR OF MID-PRICED HOTELS
- ------------------------------------------------------------------------------
183,472
>ENTERTAINMENT/LEISURE PRODUCTS: 0.9%
905,000 International Speedway Motors 50,915
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
1,220,000 RC2 (b)(c) 45,835
COLLECTIBLES, TOYS & INFANT PRODUCTS
933,000 Speedway Motorsports 34,110
MOTORSPORT RACETRACK OWNER & OPERATOR
500,000 Callaway Golf 7,715
PREMIUM GOLF CLUBS & BALLS
- ------------------------------------------------------------------------------
138,575
>RESTAURANTS: 0.3%
1,700,000 AFC Enterprises (c) 22,406
POPEYES RESTAURANTS
364,000 Cheesecake Factory (b) 12,642
CASUAL DINING RESTAURANTS
366,000 Kappa Create (Japan) 7,628
SUSHI CHAIN RESTAURANT OPERATOR
- ------------------------------------------------------------------------------
42,676
>CRUISE LINES: 0.1%
400,000 Carnival 21,820
LARGEST CRUISE LINE
- ------------------------------------------------------------------------------
>GAMING: 0.1%
650,000 Paddy Power (Ireland) 11,093
IRISH BETTING SERVICES
690,000 Intralot (Greece) 10,526
LOTTERY & GAMING SYSTEMS & SERVICES
- ------------------------------------------------------------------------------
21,619
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
GOODS
>APPAREL: 2.4%
5,980,000 Coach (b) $ 200,749
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
844,000 Oxford Industries (c) 36,334
BRANDED & PRIVATE LABEL APPAREL
3,000,000 Billabong International (Australia) 30,993
ACTION SPORTS APPAREL BRAND MANAGER
469,000 Carter's (b) 27,380
CHILDREN'S BRANDED APPAREL
400,000 Columbia Sportswear (b) 19,756
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
728,000 Steven Madden (b)(c) 12,929
WHOLESALER/RETAILER OF FASHION FOOTWEAR
789,000 Wacoal (Japan) 10,011
WOMEN'S SPECIALTY APPAREL
3,882,411 Pacific Brands (Australia) 6,669
AUSTRALIAN BRANDED APPAREL
- ------------------------------------------------------------------------------
344,821
>FURNITURE/TEXTILES: 2.2%
2,200,000 HNI 112,530
OFFICE FURNITURE & FIREPLACES
765,000 Mohawk Industries (b) 63,113
CARPET & FLOORING
1,900,000 Herman Miller 58,596
OFFICE FURNITURE
2,130,000 Nobia (Sweden) 30,913
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
844,000 American Woodmark (c) 25,328
KITCHEN CABINET MANUFACTURER
1,384,000 Knoll 23,680
OFFICE FURNITURE
- ------------------------------------------------------------------------------
314,160
>NONDURABLES: 1.1%
895,000 Scotts Company (b) 63,733
CONSUMER LAWN & GARDEN PRODUCTS
1,689,000 SCP Pool 59,267
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
630,000 Natura Cosmeticos (Brazil) 20,103
DIRECT RETAILER OF COSMETICS
657,000 Prestige Brands (b) 12,812
OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS
- ------------------------------------------------------------------------------
155,915
>LEISURE VEHICLES: 1.0%
1,745,000 Harley-Davidson 86,552
MOTORCYCLES & RELATED MERCHANDISE
850,000 Polaris Industries 45,900
LEISURE VEHICLES & RELATED PRODUCTS
762,000 Monaco Coach 13,099
RECREATIONAL VEHICLES
2,850,000 Ducati Motor (Italy) (b) 3,374
MOTORCYCLES & RELATED MERCHANDISE
- ------------------------------------------------------------------------------
148,925
>FOOD & BEVERAGES: 0.9%
725,000 Orkla (Norway) 26,582
FOOD & DIVERSIFIED CONSUMER GOODS
25
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>FOOD & BEVERAGES--CONTINUED
1,000,000 Kerry (Ireland) $ 24,662
FOOD INGREDIENTS
850,000 NBTY (b) 22,049
VITAMINS & SUPPLEMENTS
30,000,000 Global Bio-Chem Technology
Group (China) 18,578
1,700,000 Global Bio-Chem Technology Group
Warrants (China) 28
REFINER OF CORN-BASED COMMODITIES
3,000,000 Lion Nathan (Australia) 17,247
BEER BREWER/DISTRIBUTOR
1,800,000 Davide Campari (Italy) 13,152
SPIRITS & WINE
900,000 IAWS (Ireland) 12,574
BAKED GOODS
- ------------------------------------------------------------------------------
134,872
>DURABLE GOODS: 0.9%
1,316,000 Helen of Troy (b) 33,505
HAIRDRYERS & CURLING IRONS
465,000 Hyundai Mobis (South Korea) 31,116
AUTO PARTS
10,000,000 Techtronic Industries (Hong Kong) 25,191
POWER TOOLS & MOTORIZED APPLIANCES
780,000 Shimano (Japan) 22,133
BICYCLE COMPONENTS & FISHING TACKLE
133,000 Funai Electric (Japan) 13,599
CONSUMER ELECTRONICS
- ------------------------------------------------------------------------------
125,544
-----------
CONSUMER GOODS/SERVICES: TOTAL 3,048,951
- ------------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 15.4%
>MACHINERY: 2.5%
1,050,000 Esco Technologies (b)(c) 105,840
FILTRATION & TEST EQUIPMENT
2,250,000 Ametek 94,162
AEROSPACE/INDUSTRIAL INSTRUMENTS
1,297,000 Nordson 44,461
DISPENSING SYSTEMS FOR ADHESIVES & COATINGS
1,140,000 Gardner Denver (b)(c) 39,991
AIR COMPRESSORS, BLOWERS & PUMPS
840,000 Pentair 35,960
PUMPS, WATER TREATMENT & TOOLS
1,100,000 Kaydon 30,635
SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS
106,000 Oshkosh Truck 8,298
SPECIALTY TRUCK MANUFACTURER
150,000 Tennant 5,312
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ------------------------------------------------------------------------------
364,659
>INDUSTRIAL GOODS: 2.2%
3,200,000 Clarcor (c) 93,600
MOBILE & INDUSTRIAL FILTERS
1,600,000 Genlyte Group (b)(c) 77,984
COMMERCIAL LIGHTING FIXTURES
1,440,000 Mine Safety Appliances 66,528
SAFETY EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
2,000,000 Donaldson $ 60,660
INDUSTRIAL AIR FILTRATION
390,000 Drew Industries (b) 17,706
RV & MFG HOME COMPONENTS
3,000,000 Electric City (b)(c) 2,760
ELECTRICITY CONSERVATION DEVICES
- ------------------------------------------------------------------------------
319,238
>LOGISTICS: 2.0%
2,750,000 Expeditors International
of Washington 136,978
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 62,658
GLOBAL LOGISTICS & FREIGHT FORWARDING
2,000,000 Forward Air (c) 56,540
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
2,600,000 Exel (United Kingdom) 39,359
GLOBAL LOGISTICS & FREIGHT FORWARDING
- ------------------------------------------------------------------------------
295,535
>INDUSTRIAL DISTRIBUTION: 1.9%
2,286,000 Watsco (c) 97,384
HVAC DISTRIBUTION
1,925,000 Airgas 47,490
INDUSTRIAL GAS DISTRIBUTOR
3,800,000 Grafton Group (Ireland) (b) 43,973
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
1,200,000 Hughes Supply 33,720
INDUSTRIAL DISTRIBUTION
1,031,000 Nuco2 (b)(c) 26,466
BULK CO 2 GAS DISTRIBUTION TO RESTAURANTS
600,000 Aviall (b) 18,954
AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR
- ------------------------------------------------------------------------------
267,987
>CONSTRUCTION: 1.3%
738,000 Florida Rock Industries 54,132
CONCRETE & AGGREGATES
1,450,000 Simpson 44,298
WALL JOINT MAKER
787,500 Wienerberger (Austria) 36,494
BRICKS & CLAY ROOFING TILES
42,500 Geberit International (Switzerland) 27,119
PLUMBING SUPPLIES
380,000 Daito Trust Construction (Japan) 14,190
APARTMENT BUILDER
3,000,000 Consorcio (Mexico) 10,358
AFFORDABLE HOUSING BUILDER
- ------------------------------------------------------------------------------
186,591
>STEEL: 1.2%
2,850,000 Gibraltar Industries (c) 52,839
STEEL PROCESSING
600,000 Tenaris (Argentina) 46,962
STEEL PIPE FOR OIL WELLS & PIPELINES
158,000 Vallourec (France) 45,368
SEAMLESS TUBES
1,700,000 Worthington Industries 26,860
STEEL PROCESSING
- ------------------------------------------------------------------------------
172,029
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>OUTSOURCING SERVICES & TRAINING: 1.1%
1,800,000 Labor Ready (b) $ 41,958
TEMPORARY MANUAL LABOR
1,300,000 Administaff (c) 30,888
PROFESSIONAL EMPLOYER ORGANIZATION
635,000 Bilfinger Berger (Germany) 29,560
CONSTRUCTION & RELATED SERVICES
2,481,000 Quanta Services (b) 21,833
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
740,000 United Services Group (Netherlands) 19,528
TEMPORARY STAFFING SERVICES
565,000 Meitec (Japan) 17,341
STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS
600,000 GP Strategies (b) 4,884
TRAINING PROGRAMS
- ------------------------------------------------------------------------------
165,992
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.1%
3,150,000 Spartech (c) 56,070
PLASTICS DISTRIBUTION & COMPOUNDING
450,000 Novozymes (Denmark) 22,233
INDUSTRIAL ENZYMES
35,000 Sika (Switzerland) (b) 21,784
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL
APPLICATION
200,000 Imerys (France) 13,748
INDUSTRIAL MINERALS PRODUCER
750,000,000 Ultrapar (Brazil) 13,111
SPECIALTY CHEMICALS & LIQUID PROPANE GAS
DISTRIBUTION
260,000 Carbone Lorraine (France) 12,337
ADVANCED INDUSTRIAL MATERIALS
20,000 Givaudan (Switzerland) 11,600
INDUSTRIAL FRAGRANCES & FLAVORS
336,000 Schulman 6,011
PLASTICS DISTRIBUTION & COMPOUNDING
- ------------------------------------------------------------------------------
156,894
>WATER: 1.1%
856,000 Cuno (b) 61,153
FILTRATION & FLUIDS CLARIFICATION
3,000,000 Tetra Tech (b)(c) 40,590
RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING
1,080,000 Pall 32,789
FILTRATION & FLUIDS CLARIFICATION
554,000 Watts Water Technologies 18,553
WATER, VALVES, REGULATORS & FILTRATION
- ------------------------------------------------------------------------------
153,085
>OTHER INDUSTRIAL SERVICES: 0.5%
825,000 Mobile Mini (b)(c) 28,446
LEASES PORTABLE STORAGE UNITS
1,500,000 Clark (c) 21,495
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
35,000 Schindler (Switzerland) 12,598
ELEVATOR MANUFACTURER & SERVICE PROVIDER
300,000 IMTech (Netherlands) 10,484
TECHNICAL ENGINEERING
185,000 Jaakko Poyry (Finland) 5,538
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
- ------------------------------------------------------------------------------
78,561
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>CONGLOMERATES: 0.4%
755,000 Aalberts Industrie (Netherlands) $ 34,500
FLOW CONTROL & HEAT TREATMENT
5,550 Pargesa (Switzerland) 20,226
INDUSTRIAL & MEDIA HOLDINGS
120,000 Hexagon (Sweden) 2,422
MEASUREMENT EQUIPMENT & POLYMERS
- ------------------------------------------------------------------------------
57,148
>ELECTRICAL COMPONENTS: 0.1%
1,125,000 Ushio (Japan) 19,937
INDUSTRIAL LIGHT SOURCES
- ------------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 2,237,656
- ------------------------------------------------------------------------------
FINANCE: 12.1%
>BANKS: 4.6%
2,712,000 Associated Banc-Corp 91,286
MIDWEST BANK
3,502,000 TCF Financial 90,632
GREAT LAKES BANK
1,958,000 BOK Financial 90,303
SOUTHWEST MIDDLE MARKET BANK
6,243,000 Anglo Irish Bank (Ireland) 77,328
SMALL BUSINESS & MIDDLE MARKET BANKING
2,734,000 Glacier Bancorp (c) 71,439
MOUNTAIN STATES BANK
1,320,000 West Coast Bancorp (c) 32,221
PORTLAND SMALL BUSINESS LENDER
250,000 Komercni Banka (Czech Republic) 31,314
LEADING CZECH UNIVERSAL BANK
1,850,000 Depfa Bank (Ireland) 29,563
INTERNATIONAL PUBLIC SECTOR FINANCE
1,516,000 Republic 22,710
MICHIGAN BANK
756,000 Chittenden 20,563
VERMONT & WESTERN MASSACHUSETTS BANK
640,000 Great Southern Bancorp 20,026
MISSOURI REAL ESTATE LENDER
1,670,000 Den Norske Bank (Norway) 17,305
LARGEST NORWEGIAN BANK
510,000 CityBank Lynnwood (c) 15,820
SEATTLE REAL ESTATE LENDER
551,000 West Bancorporation 10,359
DES MOINES COMMERCIAL BANK
256,000 First Financial BankShares 8,663
WEST TEXAS BANK
336,000 Sterling Bancorp 7,174
NEW YORK CITY NICHE LENDER
252,000 Independent Bank 7,167
MICHIGAN BANK
382,000 Cascade Financial 6,303
SEATTLE COMMUNITY BANK
242,000 First Mutual Bancshares 6,268
SEATTLE COMMUNITY BANK
200,000 S Y Bancorp 4,570
LOUISVILLE BANK
27
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>BANKS--CONTINUED
18,000 Midwest Bank $ 347
CHICAGO BANK
- ------------------------------------------------------------------------------
661,361
>INSURANCE: 2.7%
575,000 Philadelphia Consolidated Holding (b) 48,737
SPECIALTY INSURANCE
1,169,000 Leucadia National 45,158
INSURANCE HOLDING COMPANY
995,000 Protective Life 42,009
LIFE INSURANCE
1,020,000 HCC Insurance Holdings 38,627
SPECIALTY INSURANCE
109,000 Markel (b) 36,951
SPECIALTY INSURANCE
1,500,000 Scottish Re Group 36,360
LIFE REINSURANCE
710,000 Selective Insurance Group 35,181
COMMERCIAL & PERSONAL LINES INSURANCE
715,000 Assurant 25,811
SPECIALTY INSURANCE
570,000 RLI 25,422
SPECIALTY INSURANCE
1,300,000 United America Indemnity (b) 22,347
SPECIALTY INSURANCE
560,000 Endurance Specialty Holdings 21,179
COMMERCIAL LINES INSURANCE/REINSURANCE
210,000 StanCorp Financial 16,082
GROUP LIFE & DISABILITY INSURANCE
- ------------------------------------------------------------------------------
393,864
>FINANCE COMPANIES: 1.7%
5,831,000 AmeriCredit (b) 148,690
AUTO LENDING
1,700,000 World Acceptance (b)(c) 51,085
PERSONAL LOANS
1,100,000 Intermediate Capital (United Kingdom) 20,527
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
1,000,000 Northgate (United Kingdom) 16,181
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
1,950,000 Paragon Group (United Kingdom) 14,755
UK BUY-TO-LET FINANCE COMPANY
- ------------------------------------------------------------------------------
251,238
>SAVINGS & LOANS: 1.7%
4,081,000 Peoples Bank Bridgeport 123,409
CONNECTICUT SAVINGS & LOAN
1,178,000 Anchor Bancorp Wisconsin (c) 35,646
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 34,510
PREMIER MORTGAGE LENDER IN INDIA
1,285,000 Washington Federal 30,223
OLD FASHIONED THRIFT
200,000 Bankinter (Spain) 10,197
MORTGAGE LENDER
360,000 Provident Bancorp 4,360
NEW YORK STATE THRIFT
- ------------------------------------------------------------------------------
238,345
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>MONEY MANAGEMENT: 1.3%
2,355,000 SEI Investments $ 87,959
MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT
2,390,000 Eaton Vance 57,145
SPECIALTY MUTUAL FUNDS
1,290,000 Nuveen Investments 48,530
SPECIALTY MUTUAL FUNDS
- ------------------------------------------------------------------------------
193,634
>BROKERAGE: 0.1%
690,000 Investment Technology Group (b) 14,504
ELECTRONIC TRADING
- ------------------------------------------------------------------------------
-----------
FINANCE: TOTAL 1,752,946
- ------------------------------------------------------------------------------
ENERGY/MINERALS: 9.4%
>OIL/GAS PRODUCERS: 5.0%
5,000,000 XTO Energy 169,950
NATURAL GAS PRODUCER
3,000,000 Talisman Energy (Canada) 112,198
OIL & GAS PRODUCER
3,200,000 Western Gas 111,680
OIL PRODUCER & COAL SEAM GAS PRODUCER
3,400,000 Ultra Petroleum (b) 103,224
NATURAL GAS PRODUCER
15,400,000 Tullow Oil (United Kingdom) 51,333
OIL & GAS PRODUCER
1,000,000 Southwestern Energy (b) 46,980
NATURAL GAS PRODUCER
700,000 Denbury Resources (b) 27,839
OIL PRODUCER USING CO2 INJECTION
1,000,000 Range Resources 26,900
OIL & GAS PRODUCER
662,800 Petrokazakhstan (Canada) 24,245
OIL PRODUCER & REFINER IN KAZAKHSTAN
1,200,000 McMoran Exploration (b) 23,412
NATURAL GAS PRODUCERS & LNG DEVELOPER
2,320,000 Tipperary (b)(c) 14,500
COAL SEAM GAS PRODUCER
3,200,000 Vaalco Energy (b)(c) 11,072
OIL & GAS PRODUCER
- ------------------------------------------------------------------------------
723,333
>OIL SERVICES: 2.7%
2,350,000 FMC Technologies (b) 75,130
OIL & GAS WELL HEAD MANUFACTURER
2,300,000 Pride International (b) 59,110
OFFSHORE DRILLING CONTRACTOR
500,000 Carbo Ceramics 39,480
NATURAL GAS WELL STIMULANTS
5,000,000 Newpark Resources (b)(c) 37,500
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
1,600,000 Chicago Bridge & Iron 36,576
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS &
LNG
1,365,000 Fugro (Netherlands) 33,877
SURVEY & GPS SERVICES
2,400,000 Key Energy Services (b) 29,040
OIL & GAS WELL WORKOVER SERVICES
1-800-922-6769
28
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>OIL SERVICES--CONTINUED
1,350,000 Enerflex Systems (Canada) (c) $ 27,719
NATURAL GAS COMPRESSOR
2,000,000 Saipem (Italy) 26,856
OFFSHORE CONSTRUCTION & DRILLING
700,000 Veritas DGC (b) 19,418
GEOPHYSICAL CONTRACTOR
168,000 Pioneer Drilling (b) 2,564
OIL & GAS WELL DRILLER
- ------------------------------------------------------------------------------
387,270
>DISTRIBUTION/MARKETING/REFINING: 1.2%
1,200,000 Equitable Resources 81,600
NATURAL GAS PRODUCER & UTILITY
1,900,000 Oneok 62,035
NATURAL GAS UTILITY, MARKETING & PROCESSING
1,206,000 Atmos Energy 34,733
NATURAL GAS UTILITY
- ------------------------------------------------------------------------------
178,368
>MINING: 0.5%
1,440,000 Xstrata (United Kingdom) 27,666
DIVERSIFIED MINING HOLDING COMPANY
275,000 Sociedad Quimica Y Minera
de Chile (Chile) 27,500
PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM &
IODINE
900,000 Noranda (Canada) 15,414
DIVERSIFIED MINING HOLDING COMPANY
1,000,000 Ivanhoe Mines (Canada) (b) 7,757
COPPER MINING IN MONGOLIA
- ------------------------------------------------------------------------------
78,337
-----------
ENERGY/MINERALS: TOTAL 1,367,308
- ------------------------------------------------------------------------------
HEALTH CARE: 8.6%
>SERVICES: 2.9%
2,491,000 Lincare Holdings (b) 101,732
HOME HEALTH CARE SERVICES
1,370,000 Charles River Laboratories (b) 66,102
PHARMACEUTICAL RESEARCH
821,000 Coventry Health Care (b) 58,086
PPO NETWORK
2,592,000 NDCHealth Group (c) 46,578
HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES
3,470,000 Gambro (Sweden) 46,304
PRODUCTS & SERVICES FOR RENAL CARE
510,000 OPG Groep (Netherlands) 35,513
HEALTHCARE SUPPLIES & PHARMACIES
2,033,000 Dendrite International (b) 28,055
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
1,200,000 Serologicals (b) 25,500
BLOOD COLLECTION & ANTIBODY PRODUCTION
236,000 Omega Pharma (Belgium) 12,184
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 5,852
MEDICAL TRANSCRIPTION SERVICES
- ------------------------------------------------------------------------------
425,906
>MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.7%
1,629,000 Edwards Lifesciences (b) 70,080
HEART VALVES
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
1,240,000 Diagnostic Products $ 58,689
IMMUNODIAGNOSTIC KITS
1,180,000 Intermagnetics General (b) 36,297
MRI EQUIPMENT
851,000 Arrow International 27,147
DISPOSABLE CATHETERS
1,150,000 CYTYC (b) 25,369
CONSUMABLES RELATED TO WOMEN'S HEALTH
583,000 Orthofix International (b) 25,092
BONE FIXATION & STIMULATION DEVICES
365,000 Essilor International (France) 24,838
EYEGLASS LENSES
714,000 ICU Medical (b)(c) 22,969
INTRAVENOUS THERAPY PRODUCTS
552,000 Advanced Medical Optics (b) 21,942
MEDICAL DEVICES FOR EYE CARE
875,000 Viasys Healthcare (b) 19,766
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
390,000 Hogy Medical (Japan) 17,395
DISPOSABLE SURGICAL PRODUCTS
350,000 Haemonetics (b) 14,224
BLOOD & PLASMA COLLECTION EQUIPMENT
125,000 Synthes (Switzerland) 13,679
PRODUCTS FOR ORTHOPEDIC SURGERY
261,000 Datascope 8,704
MEDICAL DEVICES
- ------------------------------------------------------------------------------
386,191
>BIOTECHNOLOGY/DRUG DELIVERY: 2.2%
880,000 Neurocrine Biosciences (b) 37,013
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
900,000 Martek Biosciences (b) 34,155
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
1,350,000 DOV Pharmaceutical (b)(c) 25,191
DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION
2,400,000 Pozen (b)(c) 19,680
DRUGS FOR MIGRAINES
1,179,000 AtheroGenics (b) 18,840
DRUGS FOR ATHEROSCLEROSIS
1,900,000 Decode Genetics (b) 17,841
DRUGS FOR HEART ATTACK, ASTHMA & VASCULAR DISEASE
1,055,000 Nektar Therapeutics (b) 17,766
DRUG DELIVERY TECHNOLOGIES
1,500,000 Tanox (b) 17,580
DRUGS FOR ASTHMA & HIV
2,000,000 Medarex (b) 16,660
HUMANIZED ANTIBODIES
3,100,000 Lexicon Genetics (b) 15,314
DRUG DISCOVERY
2,000,000 Exelixis (b) 14,860
TREATMENTS FOR CANCER & METABOLIC DISORDERS
675,000 Rigel Pharmaceuticals (b) 13,446
DRUGS FOR HAY FEVER, ASTHMA, HEPATITIS & CANCER
1,176,000 NPS Pharmaceuticals (b) 13,348
DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM
2,300,000 Seattle Genetics (b)(c) 12,328
ANTIBODY-BASED THERAPIES FOR CANCER
1,200,000 Ligand Pharmaceuticals (b) 8,340
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
865,000 Arena Pharmaceuticals (b) 5,899
NOVEL DRUG TARGETING TECHNOLOGY
29
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
705,000 Cytokinetics (b) $ 4,900
DRUGS FOR CANCER & HEART FAILURE
5,500,000 La Jolla Pharmaceutical (b)(c) 4,510
LUPUS TREATMENT
635,000 Maxygen (b) 4,356
MOLECULAR BREEDING
1,875,000 Locus Discovery, Series D, Pfd. (d)(f) 3,750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
638,000 Diversa (b) 3,324
MOLECULAR BREEDING
1,249,999 Perlegen Sciences (d)(f) 2,632
LARGE SCALE GENE SEQUENCING
359,944 Microdose (d)(f) 270
DRUG INHALERS
- ------------------------------------------------------------------------------
312,003
>MEDICAL SUPPLIES: 0.4%
686,000 Techne (b) 31,494
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE
SCIENCES
650,000 Owens & Minor 21,028
DISTRIBUTION OF MEDICAL SUPPLIES
- ------------------------------------------------------------------------------
52,522
>HOSPITAL MANAGEMENT: 0.2%
500,000 Rhoen-Klinikum (Germany) 34,626
HOSPITAL MANAGEMENT
- ------------------------------------------------------------------------------
>PHARMACEUTICALS: 0.2%
500,000 Par Pharmaceuticals (b) 15,905
GENERICS
3,495,000 United Drug (Ireland) 14,996
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
- ------------------------------------------------------------------------------
30,901
-----------
HEALTH CARE: TOTAL 1,242,149
- ------------------------------------------------------------------------------
OTHER INDUSTRIES: 4.0%
>REAL ESTATE: 2.6%
1,320,000 General Growth Properties 54,239
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 49,112
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
635,000 Macerich Company 42,577
REGIONAL SHOPPING MALLS
650,000 SL Green Realty 41,925
MANHATTAN OFFICE BUILDINGS
620,000 Mills 37,690
REGIONAL SHOPPING MALLS
575,000 Federal Realty Investment Trust 33,925
SHOPPING CENTERS
2,552,000 Highland Hospitality (c) 26,668
HOTEL REAL ESTATE INVESTMENT TRUST
1,375,000 Crescent Real Estate Equities 25,781
CLASS A OFFICE BUILDINGS
475,000 Gaylord Entertainment (b) 22,083
CONVENTION HOTELS
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
1,355,000 Sponda (Finland) $ 13,928
OFFICE & WAREHOUSE PROPERTY COMPANY
1,000,000 Diamondrock
Hospitality 144A (b)(d) 11,300
303,000 Diamondrock Hospitality 3,424
HOTEL REAL ESTATE INVESTMENT TRUST
717,000 Kite Realty Group 10,755
COMMUNITY SHOPPING CENTERS
37,407 Security Capital European Realty
(Luxembourg) (d)(f) 527
SELF STORAGE PROPERTIES
- ------------------------------------------------------------------------------
373,934
>TRANSPORTATION: 0.6%
1,500,000 Heartland Express 29,145
REGIONAL TRUCKER
720,000 Grupo Aeroportaurio Del Sureste
(Mexico) 22,932
CANCUN & COZUMEL AIRPORT OPERATOR
18,000,000 Comfort Del Gro (Singapore) 17,993
TAXI & MASS TRANSIT SERVICE
70,000 Kobenhavns Lufthavne (Denmark) 16,569
COPENHAGEN AIRPORT AUTHORITY
- ------------------------------------------------------------------------------
86,639
>REGULATED UTILITIES: 0.4%
1,650,000 Northeast Utilities 34,419
REGULATED ELECTRIC UTILITY
989,800 Red Electrica (Spain) 27,320
SPANISH POWER GRID
- ------------------------------------------------------------------------------
61,739
>WASTE MANAGEMENT: 0.4%
1,500,000 Waste Connections (b) 55,935
SOLID WASTE MANAGEMENT
- ------------------------------------------------------------------------------
-----------
OTHER INDUSTRIES TOTAL 578,247
TOTAL COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 92.4% -----------
(COST: $7,966,904) 13,401,299
SHORT-TERM OBLIGATIONS: 7.6%
$ 125,000 Aluminum Company America
3.08% - 3.24% Due
7/12/05 - 8/3/05 124,790
107,000 Toyota Motor Credit 3.04% - 3.21%
Due 7/13/05 - 8/4/05 106,831
99,000 SBC Communications 3.10% - 3.14%
Due 7/7/05 - 7/26/05 98,859
85,000 HSBC Finance Corp 3.23% - 3.25%
Due 8/5/05 - 8/10/05 84,713
78,000 Verizon Network 2.74%
Due 4/26/05 77,840
73,000 General Electric Capital Services
3.08% - 3.20% -
Due 7/21/05 - 8/01/25 72,846
1-800-922-6769
30
PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--CONTINUED
$ 63,000 American General Finance
3.13% - 3.26%
Due 7/19/05 - 8/9/05 $ 62,846
62,000 Hewlett Packard 3.14% - 3.16% -
Due 7/27/05 - 7/28/05 61,856
45,000 American Express Credit 3.06%
Due 7/11/05 44,962
45,000 Prudential Funding 3.09%
Due 7/22/05 44,919
45,000 LaSalle Bank 3.14% Due 7/25/05 44,906
45,000 Verizon Global Funding 3.21% -
Due 8/2/05 44,872
43,000 Marshall + Ilsley 3.17%
Due 7/29/05 42,894
40,000 Campbell Soup Company 3.04%
Due 7/8/05 39,976
35,000 General Electric Capital Corporate
3.01% Due 7/1/05 35,000
35,000 Eaton Company 3.03% Due 7/6/05 34,985
35,000 Countrywide Funding 3.29%
Due 8/11/05 34,869
34,000 AIG Funding 3.11% - Due 7/18/05 33,950
6,597 Repurchase Agreement with State Street Bank &
Trust dated 6/30/05, due 7/1/05 at 3.00%
collateralized by Federal National Mortgage
Association Notes, maturing 3/24/08 market
value $6,733 (repurchase proceeds: $6,598) 6,597
- ------------------------------------------------------------------------------
(AMORTIZED COST: $1,098,511) 1,098,511
-----------
TOTAL INVESTMENTS: 100.0% 14,499,810
(COST: $9,065,415)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,997
-----------
TOTAL NET ASSETS: 100% $14,502,807
==============================================================================
31
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$9,065,415 and net unrealized appreciation was $5,434,395 consisting of gross
unrealized appreciation of $5,840,365 and gross unrealized depreciation of
$405,970.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent or
more of its outstanding voting shares. On June 30, 2005, the Fund held five
percent or more of the outstanding voting securities of the following companies:
AnswerThink Consulting 10.71%
Christopher & Banks 10.46
Spartech 9.87
New Horizons Worldwide 9.80
Indus International 9.75
Actuate 9.66
Gibraltar Industries 9.59
Igate Capital 9.51
Analysts International 9.27
World Acceptance 9.07
West Coast Bancorp 8.91
Skillsoft Publishing 8.89
Glacier Bancorp 8.75
E.Piphany 8.63
Watsco 8.32
Pozen 8.29
Esco Technologies 8.26
Clark 8.15
MRO Software 7.90
Concurrent Computer 7.85
JDA Software Group 7.56
La Jolla Pharmaceutical 7.44
NDCHealth Group 7.18
Electric City 7.17
Gaiam 7.16
Bally Total Fitness 6.89
Nuco2 6.79
Navigant International 6.74
Princeton Review 6.71
SeaChange International 6.60
Highland Hospitality 6.37
Clarcor 6.20
Forward Air 6.18%
Pegasus Systems 6.03
Enerflex Systems 6.00
Newpark Resources 5.93
RC2 5.93
DOV Pharmaceutical 5.93
Sports Authority 5.86
AFC Enterprises 5.78
Genlyte Group 5.76
IXYS 5.71
Vaalco Energy 5.69
Coinstar 5.66
Gardner Denver 5.66
Aspect Communications 5.62
Tipperary 5.60
Steven Madden 5.60
Mobile Mini 5.57
Seattle Genetics 5.45
Alliance Gaming 5.38
Tetra Tech 5.29
Radiant Systems 5.28
Excel Technologies 5.18
Anchor Bancorp Wisconsin 5.18
ICU Medical 5.16
American Woodmark 5.11
Administaff 5.09
CTS 5.08
CityBank Lynnwood 5.06
Vail Resorts 5.01
Oxford Industries 5.00
InfoUSA 5.00
The aggregate cost and value of these companies at June 30, 2005, was
$1,549,261 and $1,988,672, respectively. Investments in affiliate companies
represent 13.7% of total net assets at June 30, 2005. Investment activity
and income amounts relating to affiliates during the six months ended June
30, 2005 were as follows:
Dividend Income $ 14,830
Net realized gain or loss $ 1,653
Change in unrealized gain or loss $ (41,103)
Purchases $ 156,956
Proceeds from sales $ 18,992
1-800-922-6769
32
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At June 30, 2005, these securities were
illiquid. At June 30, 2005, these securities (in thousands) amounted to
$18,479, which represents 0.13% of total net assets.
Additional information on these securities is as follows:
ACQUISITION SHARES/
SECURITY DATES PAR (000) COST (000) VALUE (000)
- ----------------------------------------------------------------------------------------------
Diamondrock Hospitality 06/29/04 1,000,000 $ 10,000 $ 11,300
Gadzooks 5% Convertible 10/07/08 10/08/03 $ 6,000 6,000 0
Locus Discovery, Series D, Pfd. 09/05/01 1,875,000 7,500 3,750
Microdose 11/24/00 359,944 2,005 270
Perlegen Sciences 03/30/01 1,249,999 4,500 2,632
Security Capital European Realty
(Luxembourg) 08/20/98-11/12/99 37,407 748 527
---------- ----------
$ 30,753 $ 18,479
========== ==========
(e) On June 30, 2005, the market value of foreign securities (in thousands)
represents 14.95% of total net assets. The Fund's foreign portfolio was
diversified as follows:
VALUE PERCENT
-------------------------------------------------
Canada $ 259,354 1.79%
Ireland 227,277 1.57
United Kingdom 190,167 1.31
France 185,595 1.28
Japan 184,812 1.27
Netherlands 133,902 0.92
Switzerland 107,006 0.74
Germany 82,977 0.57
Sweden 79,639 0.55
Taiwan 67,801 0.47
Australia 54,909 0.38
Hong Kong 48,503 0.33
Argentina 46,962 0.32
Norway 43,887 0.30
Italy 43,382 0.30
Denmark 38,802 0.27
VALUE PERCENT
-------------------------------------------------
Spain $ 37,517 0.26%
Austria 36,494 0.25
India 34,510 0.24
Mexico 33,290 0.23
Brazil 33,214 0.23
Czech Republic 31,314 0.22
South Korea 31,116 0.22
Chile 27,500 0.19
Finland 19,466 0.13
China 18,606 0.13
Singapore 17,993 0.12
South Africa 15,183 0.11
New Zealand 13,985 0.10
Belgium 12,184 0.08
Greece 10,526 0.07
Luxembourg 527 0.00
---------- ----------
Total Foreign Portfolio $2,168,400 14.95%
========== ==========
(f) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
33
COLUMBIA ACORN INTERNATIONAL
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Bloomsbury Publishing 0 911,000
Expro International 2,600,000 2,840,000
IAWS (Ireland) 1,400,000 1,425,000
Kensington 1,650,000 1,700,000
Paddy Power (Ireland) 0 600,000
Paragon Group 1,600,000 2,800,000
Ulster Television 223,000 1,281,000
United Drug (Ireland) 4,300,000 4,825,000
William Hill 0 1,200,000
Workspace Group 2,100,000 2,450,000
>FRANCE
April Group 400,000 492,000
Iliad 279,500 390,000
Imerys 300,000 360,000
Metropole TV 360,000 450,000
Rubis 0 31,000
>GERMANY
Bilfinger Berger 300,000 445,000
CTS Eventim 0 77,000
GFK 350,000 415,000
Grenke Grenkeleasing 160,000 203,000
Wincor Nixdorf 225,000 275,000
>NETHERLANDS
Aalberts Industrie 540,000 550,000
Fugro 1,115,200 1,245,000
(INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT)
Sligro Food Group 340,000 400,000
Smit International 0 289,000
United Services Group 620,000 684,000
>SWITZERLAND
BKW Energie 0 119,000
(INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT)
Kuehne & Nagel 85,000 95,000
>SWEDEN
Gambro 470,000 762,000
Hexagon 1,194,000 1,230,000
(INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT)
>RUSSIAN FEDERATION
Mechel Steel Group 260,000 370,000
RBC Information Systems 0 700,000
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Ito En 142,000 301,000
Sato 88,800 450,000
Shimano 250,000 450,000
Ushio 550,000 750,000
>TAIWAN
Advantech 4,978,000 6,500,000
ASE Test 1,245,100 1,772,600
Novatek Microelectronics 0 1,800,000
>INDIA
Housing Development Finance 1,300,000 1,329,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA
ABC Learning Center 0 1,225,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>BRAZIL
Caemi 6,300,000 8,800,000
Diagnosticos 156,250 200,000
Porto Seguro 594,000 1,000,000
Ultrapar 0 500,000,000
>MEXICO
URBI Desarrollo 700,000 1,000,000
>CHILE
Sociedad Quimica Y Minera
de Chile 16,800 160,000
1-800-922-6769
34
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Anglo Irish Bank (Ireland) 4,741,010 3,888,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Hit Entertainment 1,270,000 0
Tullow Oil 7,500,000 6,500,000
>FRANCE
Neopost 377,500 327,500
>NETHERLANDS
Hunter Douglas 128,000 0
>SWITZERLAND
Bachem 110,000 0
>SPAIN
Abengoa 2,000,000 1,357,000
>ITALY
Amplifon 270,000 190,000
Autogrill 830,000 0
Credito Emiliano 1,000,000 0
>FINLAND
Amer Sports 555,000 0
>NORWAY
Den Norske Bank 910,000 0
Ekornes 522,300 470,000
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
ASIA
>JAPAN
ARRK 380,000 0
Eneserve 358,000 63,000
Kappa Create 402,000 380,000
NIFCO 818,000 14,000
Olympus Optical 325,000 0
Wacoal 1,500,000 1,185,000
>HONG KONG
Esprit Holdings 2,000,000 0
Lerado Group 27,932,000 27,480,000
Ngai Lik Industrial 14,500,000 11,330,000
>SOUTH KOREA
Yuhan 63,280 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Corus Entertainment 330,000 0
Masonite International 445,000 0
Petrokazakhstan 185,000 153,100
35
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 96.0%
- ------------------------------------------------------------------------------
EUROPE: 59.7%
>UNITED KINGDOM/IRELAND: 19.6%
3,888,000 Anglo Irish Bank (Ireland) $ 48,158
SMALL BUSINESS & MIDDLE MARKET BANKING
2,350,000 Grafton Group (Ireland) (b) 27,194
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
1,750,000 Exel 26,492
GLOBAL LOGISTICS & FREIGHT FORWARDING
2,840,000 Expro International 23,056
OFFSHORE OIL FIELD SERVICES
6,500,000 Tullow Oil 21,667
OIL & GAS PRODUCER
2,800,000 Paragon Group 21,187
UK BUY-TO-LET FINANCE COMPANY
4,825,000 United Drug (Ireland) 20,703
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
1,275,000 Depfa Bank (Ireland) 20,375
INTERNATIONAL PUBLIC SECTOR FINANCE
1,425,000 IAWS (Ireland) 19,908
BAKED GOODS
800,000 Kerry (Ireland) 19,730
FOOD INGREDIENTS
1,700,000 Kensington 17,127
NON-CONFORMING MORTGAGE COMPANY
900,000 Intermediate Capital 16,795
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
975,000 Northgate 15,777
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
600,000 Cobham 15,205
AEROSPACE COMPONENTS
798,000 Jurys Doyle Hotel (Ireland) 14,963
OWNER/OPERATOR OF MID-PRICED HOTELS
750,000 Xstrata 14,409
DIVERSIFIED MINING HOLDING COMPANY
1,175,000 Business Post 13,384
PARCEL & EXPRESS MAIL SERVICE
2,200,000 BBA Group 12,141
AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS
1,200,000 William Hill 11,545
LARGEST BOOKMAKER
1,281,000 Ulster Television 10,749
IRISH TELEVISION & RADIO STATION OPERATOR
1,200,000 Spectris 10,616
ELECTRONIC INSTRUMENTS & CONTROLS
3,800,000 RPS Group 10,486
ENVIRONMENTAL CONSULTING
2,450,000 Workspace Group 10,342
REAL ESTATE COMPANY
600,000 Paddy Power (Ireland) 10,240
IRISH BETTING SERVICES
500,000 Viridian 6,977
NORTHERN IRELAND ELECTRIC UTILITY
911,000 Bloomsbury Publishing 6,143
PUBLISHING
- ------------------------------------------------------------------------------
445,369
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>FRANCE/BELGIUM: 9.7%
117,000 Vallourec $ 33,595
SEAMLESS TUBES
1,980,000 SES Global 29,803
SATELLITE BROADCASTING SERVICES
327,500 Neopost 28,784
POSTAGE METER MACHINES
360,000 Imerys 24,746
INDUSTRIAL MINERALS PRODUCER
492,000 April Group 15,296
INSURANCE POLICY CONSTRUCTION
390,000 Iliad 14,566
HIGH SPEED INTERNET SERVICE PROVIDER
450,000 Metropole TV 11,399
TELEVISION BROADCASTER
215,000 Carbone Lorraine 10,202
ADVANCED INDUSTRIAL MATERIALS
140,000 Essilor International 9,527
EYEGLASS LENSES
184,000 Omega Pharma (Belgium) 9,500
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
400,000 Fininfo 8,378
DATA FEEDS FOR FRENCH BANKS & BROKERS
94,000 Bacou Dalloz 7,689
SAFETY EQUIPMENT
96,000 Pierre & Vacances 7,081
VACATION APARTMENT LETS
140,000 Norbert Dentressangle 6,600
TRANSPORT
31,000 Rubis 1,928
TANK STORAGE & LPG SUPPLIER
- ------------------------------------------------------------------------------
219,094
>GERMANY/AUSTRIA: 8.0%
275,000 Wincor Nixdorf 22,467
RETAIL POS SYSTEMS & ATM MACHINES
315,000 Rhoen-Klinikum Pfd. 21,773
300,000 Rhoen-Klinikum 20,775
HOSPITAL MANAGEMENT
445,000 Bilfinger Berger 20,715
CONSTRUCTION & RELATED SERVICES
375,000 Wienerberger (Austria) 17,378
BRICKS & CLAY ROOFING TILES
415,000 GFK 16,363
MARKET RESEARCH SERVICES
450,000 Hugo Boss Designs 14,761
FASHION APPAREL
175,000 Deutsche Boerse 13,653
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
200,000 Vossloh 9,352
RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES
203,000 Grenke Grenkeleasing 8,603
FINANCING FOR IT EQUIPMENT
864,998 Takkt 8,346
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES
1-800-922-6769
36
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>GERMANY/AUSTRIA--CONTINUED
260,000 Deutsche Beteiligungs $ 4,053
PRIVATE EQUITY INVESTMENT MANAGEMENT
77,000 CTS Eventim (b) 3,232
EVENT TICKET SALES
- ------------------------------------------------------------------------------
181,471
>NETHERLANDS: 7.7%
1,245,000 Fugro 30,899
SURVEY & GPS SERVICES
550,000 Aalberts Industries 25,132
FLOW CONTROL & HEAT TREATMENT
327,000 OPG Groep 22,770
HEALTHCARE SUPPLIES & PHARMACIES
230,000 Koninklijke Ten Cate 20,674
ADVANCED TEXTILES & INDUSTRIAL FABRICS
684,000 United Services Group 18,050
TEMPORARY STAFFING SERVICES
400,000 Sligro Food Group 16,066
FOOD SERVICE & WHOLESALING
400,000 IMTech 13,979
TECHNICAL ENGINEERING
890,000 Unit 4 Aggresso (b) 13,581
BUSINESS & SECURITY SOFTWARE
289,000 Smit International 13,398
HARBOR & OFFSHORE TOWAGE & MARINE SERVICES
- ------------------------------------------------------------------------------
174,549
>SWITZERLAND: 4.3%
95,000 Kuehne & Nagel 20,088
FREIGHT FORWARDING/LOGISTICS
25,000 Geberit International 15,953
PLUMBING SUPPLIES
24,000 Sika (b) 14,937
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
3,000 Pargesa 10,933
INDUSTRIAL & MEDIA CONGLOMERATE
30,000 Schindler 10,798
ELEVATOR MANUFACTURER & SERVICE PROVIDER
85,000 Synthes 9,302
PRODUCTS FOR ORTHOPEDIC SURGERY
15,000 Givaudan 8,700
INDUSTRIAL FRAGRANCES & FLAVORS
119,000 BKW Energie 7,437
ELECTRIC UTILITY
- ------------------------------------------------------------------------------
98,148
>SWEDEN: 2.4%
1,230,000 Hexagon 24,827
MEASUREMENT EQUIPMENT & POLYMERS
1,075,000 Nobia 15,601
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
762,000 Gambro 10,168
PRODUCTS/SERVICES FOR RENAL CARE
188,000 Sweco (b) 3,388
NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING
- ------------------------------------------------------------------------------
53,984
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>SPAIN: 1.7%
1,357,000 Abengoa $ 15,722
ENGINEERING & CONSTRUCTION
620,000 Red Electrica 17,113
SPANISH POWER GRID
120,000 Bankinter 6,118
MORTGAGE LENDER
- ------------------------------------------------------------------------------
38,953
>ITALY: 1.4%
2,120,000 Davide Campari 15,490
SPIRITS & WINE
190,000 Amplifon 12,055
HEARING AID RETAILER
3,388,000 Ducati Motor (b) 4,011
MOTORCYCLES & RELATED MERCHANDISE
- ------------------------------------------------------------------------------
31,556
>CZECH REPUBLIC: 1.0%
183,000 Komercni Banka 22,922
LEADING CZECH UNIVERSAL BANK
- ------------------------------------------------------------------------------
>FINLAND: 1.0%
439,000 Jaakko Poyry 13,142
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
950,000 Sponda 9,765
OFFICE & WAREHOUSE PROPERTY COMPANY
- ------------------------------------------------------------------------------
22,907
>RUSSIAN FEDERATION: 0.9%
700,000 RBC Information Systems (b) 11,620
FINANCIAL INFORMATION, MEDIA, & IT SERVICES
370,000 Mechel Steel Group 9,398
COKING COAL
- ------------------------------------------------------------------------------
21,018
>NORWAY: 0.8%
470,000 Ekornes 9,091
NICHE FURNITURE MANUFACTURER
221,000 Orkla 8,103
FOOD & DIVERSIFIED CONSUMER GOODS
- ------------------------------------------------------------------------------
17,194
>GREECE: 0.6%
930,000 Intralot 14,187
LOTTERY & GAMING SYSTEMS/SERVICES
- ------------------------------------------------------------------------------
>DENMARK: 0.4%
35,000 Kobenhavns Lufthavne 8,285
COPENHAGEN AIRPORT AUTHORITY
- ------------------------------------------------------------------------------
>POLAND: 0.2%
132,000 Central European Distribution (b) 4,928
SPIRITS & WINE DISTRIBUTION
-----------
EUROPE: TOTAL 1,354,565
- ------------------------------------------------------------------------------
37
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
ASIA: 21.7%
>JAPAN: 10.6%
480,100 Daito Trust Construction $ 17,928
APARTMENT BUILDER
862,000 Park 24 17,028
PARKING LOT OPERATOR
2,900,000 Bank of Yokohama 16,664
REGIONAL BANK
301,000 Ito En 15,435
BOTTLED TEA & OTHER BEVERAGES
338,000 Hogy Medical 15,076
DISPOSABLE SURGICAL PRODUCTS
1,185,000 Wacoal 15,035
WOMEN'S SPECIALTY APPAREL
470,000 Meitec 14,425
STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS
750,000 Ushio 13,291
INDUSTRIAL LIGHT SOURCES
450,000 Shimano 12,769
BICYCLE COMPONENTS & FISHING TACKLE
14,465 Jupiter Telecommunications (b) 12,155
LARGEST CABLE SERVICE PROVIDER IN JAPAN
220,000 Fast Retailing 11,408
APPAREL RETAILER
110,000 Funai Electric 11,247
CONSUMER ELECTRONICS
906,000 Toyo Technica 10,380
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
2,248,000 Hiroshima Bank 10,219
REGIONAL BANK
450,000 Sato 10,038
BAR CODE PRINTERS & SUPPLIES
1,400,000 Chiba Bank 9,185
REGIONAL BANK
450,200 Ain Pharmaciez 9,098
DISPENSING PHARMACY/DRUGSTORE OPERATOR
1,500,000 Fukuoka Bank 8,857
REGIONAL BANK
380,000 Kappa Create 7,920
SUSHI CHAIN RESTAURANT OPERATOR
63,000 Eneserve 1,879
POWER GENERATORS
14,000 NIFCO 212
MOLDED PLASTIC COMPONENTS
- ------------------------------------------------------------------------------
240,249
>TAIWAN: 4.3%
15,740,000 Phoenixtec Power 16,887
UNINTERRUPTIBLE POWER SUPPLIES
6,500,000 Advantech 15,319
EMBEDDED COMPUTERS
1,772,600 ASE Test (b) 11,416
SEMICONDUCTOR PACKAGING & TEST SERVICES
5,167,000 Springsoft Systems 10,740
ELECTRONIC DESIGN AUTOMATION SOFTWARE
9,661,000 Chicony Electronic 9,993
PC POWER SUPPLIES & KEYBOARDS
6,000,000 Sunplus Technology 8,398
FABLESS SEMICONDUCTOR DESIGNER
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
5,300,000 Wah Lee Industrial $ 7,888
DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT
1,800,000 Novatek Microelectronics 7,654
LCD RELATED IC DESIGNER
8,470,000 Bank of Kaohsiung 5,980
COMMERCIAL BANKING
3,010,000 Taiwan Fu Hsing 3,380
DOOR LOCK MANUFACTURER
- ------------------------------------------------------------------------------
97,655
>HONG KONG/CHINA: 2.7%
6,000,000 Hong Kong Exchanges & Clearing 15,541
HONG KONG EQUITY & DERIVATIVES OPERATOR
25,000,000 Global Bio-Chem Technology
Group (China) 15,481
1,800,000 Global Bio-Chem Technology Group
Warrants (China) 30
REFINER OF CORN-BASED COMMODITIES
6,000,000 Techtronic Industries 15,115
POWER TOOLS & MOTORIZED APPLIANCES
9,800,000 Hainan Meilan Airport (China) 5,573
CHINESE AIRPORT OPERATOR
17,700,000 Linmark 5,059
SOURCING OF CONSUMER GOODS
27,480,000 Lerado Group 2,898
BABY STROLLERS & INFANT CAR SEATS MANUFACTURER
11,330,000 Ngai Lik Industrial 2,235
CONSUMER ELECTRONICS MANUFACTURER
- ------------------------------------------------------------------------------
61,932
>SOUTH KOREA: 1.2%
250,000 Hyundai Mobis 16,729
AUTO PARTS
100,000 Samsung Fire & Marine 8,083
NON-LIFE INSURANCE
200,000 Samyoung Heat Exchange 3,069
POWER PLANT RELATED MACHINERY
- ------------------------------------------------------------------------------
27,881
>INDIA: 1.2%
1,329,000 Housing Development Finance 26,978
PREMIER MORTGAGE LENDER IN INDIA
- ------------------------------------------------------------------------------
>SINGAPORE: 1.1%
16,000,000 Comfort Del Gro 15,993
TAXI & MASS TRANSIT SERVICE
19,500,000 LMA International (b) 9,219
MEDICAL EQUIPMENT & SUPPLIES
- ------------------------------------------------------------------------------
25,212
>INDONESIA: 0.6%
45,000,000 PT Perusahaan Gas Negara 13,279
GAS PIPELINE OPERATOR
- ------------------------------------------------------------------------------
-----------
ASIA: TOTAL 493,186
- ------------------------------------------------------------------------------
OTHER COUNTRIES: 8.2%
>AUSTRALIA/NEW ZEALAND: 3.9%
3,000,000 Billabong International 30,993
ACTION SPORTS APPAREL BRAND MANAGER
3,000,000 Lion Nathan 17,247
BEER BREWER/DISTRIBUTOR
1-800-922-6769
38
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>AUSTRALIA/NEW ZEALAND--CONTINUED
350,000 Perpetual Trustees $ 15,232
AUSTRALIAN MUTUAL FUND MANAGER
3,000,000 Sky City Entertainment
(New Zealand) 9,323
CASINO/ENTERTAINMENT COMPLEX
3,882,489 Pacific Brands 6,670
AUSTRALIAN BRANDED APPAREL
530,000 Major Drilling Group International (b) 5,225
MINING EXPLORATION DRILLER
1,225,000 ABC Learning Center 5,187
CHILDCARE CENTERS
- ------------------------------------------------------------------------------
89,877
>CANADA: 3.6%
595,000 Talisman Energy 22,253
OIL & GAS PRODUCER
1,190,000 Shawcor 17,472
OIL & GAS PIPELINE PRODUCTS
450,000 Intrawest 10,776
OWNER/OPERATOR OF SKI RESORTS
400,000 Noranda 6,851
DIVERSIFIED MINING HOLDING COMPANY
1,100,000 Kinross Gold (b) 6,722
GOLD MINING
850,000 Ivanhoe Mines (b) 6,593
COPPER MINING IN MONGOLIA
153,100 Petrokazakhstan 5,600
OIL PRODUCER & REFINER IN KAZAKHSTAN
2,000,000 Northern Orion Resources (b) 4,921
MINING OF COPPER & GOLD IN ARGENTINA
- ------------------------------------------------------------------------------
81,188
>SOUTH AFRICA: 0.7%
350,000 Edgars Consolidated Stores 15,183
LEADING RETAIL CONGLOMERATE
- ------------------------------------------------------------------------------
-----------
OTHER COUNTRIES: TOTAL 186,248
- ------------------------------------------------------------------------------
LATIN AMERICA: 6.4%
>BRAZIL: 2.5%
640,000 Natura Cosmeticos 20,422
DIRECT RETAILER OF COSMETICS
1,000,000 Porto Seguro 8,948
AUTO & LIFE INSURANCE
500,000,000 Ultrapar 8,741
SPECIALTY CHEMICALS & LIQUID PROPANE
GAS DISTRIBUTION
280,000 America Latina Logistics 8,290
RAIL OPERATOR IN BRAZIL & ARGENTINA
8,800,000 Caemi 8,249
IRON ORE/KAOLIN PRODUCER
200,000 Diagnosticos (b) 2,710
MEDICAL DIAGNOSTIC SERVICES
- ------------------------------------------------------------------------------
57,360
NUMBER OF SHARES OR
PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
>MEXICO: 1.6%
660,000 Grupo Aeroportaurio Del Sureste $ 21,021
CANCUN & COZUMEL AIRPORT OPERATOR
3,000,000 Consorcio ARA 10,358
AFFORDABLE HOUSING BUILDER
1,000,000 URBI Desarrollo (b) 5,490
AFFORDABLE HOUSING BUILDER
- ------------------------------------------------------------------------------
36,869
>ARGENTINA: 1.2%
340,000 Tenaris 26,612
STEEL PIPE FOR OIL WELLS & PIPELINES
- ------------------------------------------------------------------------------
>CHILE: 1.1%
160,000 Sociedad Quimica Y Minera
de Chile 16,000
PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM &
IODINE
300,000 CorpBanca 7,830
CONSUMER & SME BANKING
- ------------------------------------------------------------------------------
23,830
-----------
LATIN AMERICA: TOTAL 144,671
TOTAL COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 96.0% -----------
(COST: $1,527,519) 2,178,670
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 3.7%
$ 34,000 Citigroup Funding 3.10% -
Due 7/1/05 34,000
30,000 LaSalle Bank 3.20% - Due 7/5/05 29,989
19,046 Repurchase Agreement with
State Street Bank & Trust dated 6/30/05, due
7/1/05 at 3.00% collateralized by Federal
National Mortgage Association Notes, maturing
3/24/08 market value $19,429 (repurchase
proceeds: $19,048) 19,046
- ------------------------------------------------------------------------------
(AMORTIZED COST: $83,035) 83,035
-----------
TOTAL INVESTMENTS: 99.7% 2,261,705
(COST: $1,610,554)(a)(c)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.3% 6,552
-----------
TOTAL NET ASSETS: 100% $ 2,268,257
==============================================================================
39
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purpose cost of investments was
$1,610,554 and net unrealized appreciation was $651,151 consisting of
gross unrealized appreciation of $710,929 and gross unrealized
depreciation of $59,778.
(b) Non-income producing security.
(c) On June 30, 2005, the Fund's total investments were denominated in
currencies as follows:
% OF
TOTAL
CURRENCY VALUENET ASSETS
------------------------------------------------
Euro $ 863,991 38.1%
British Pounds 264,098 11.6
Japanese Yen 240,249 10.6
US Dollar 197,460 8.7
Other currencies less than
5% of total net assets 695,907 30.7
----------- ------
$ 2,261,705 99.7%
=========== ======
1-800-922-6769
40
COLUMBIA ACORN INTERNATIONAL
>PORTFOLIO DIVERSIFICATION (UNAUDITED)
At June 30, 2005, the Fund's portfolio investments as a percent of net assets
was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 108,960 4.8%
Industrial Materials 96,862 4.3
Conglomerates 76,614 3.4
Steel 60,207 2.6
Construction 59,401 2.6
Machinery 51,243 2.3
Specialty Chemicals 48,378 2.1
Outsourcing & Training Services 44,616 2.0
Electrical Components 28,496 1.2
Industrial Distribution 27,194 1.2
- ----------------------------------------------------------------------------
601,971 26.5
>CONSUMER GOODS/SERVICES
Apparels 72,518 3.2
Food 55,704 2.5
Beverages 48,172 2.1
Retail 47,744 2.1
Gaming 35,972 1.6
Other Consumer Services 32,194 1.4
Durables Goods 31,895 1.4
Nondurables 28,525 1.3
Travel 25,739 1.1
Furniture & Textiles 24,692 1.1
Consumer Electronics 11,247 0.5
Casinos 9,323 0.4
Restaurants 7,920 0.4
Consumer Goods Distribution 4,928 0.2
Leisure Products 3,232 0.1
- ----------------------------------------------------------------------------
439,805 19.4
>FINANCE
Banks 150,190 6.6
Other Finance Companies 79,489 3.5
Savings & Loans 33,096 1.5
Insurance 32,327 1.4
Money Management 19,285 0.8
- ----------------------------------------------------------------------------
314,387 13.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Computer Hardware &
Related Equipment $ 64,666 2.9%
Business Information &
Marketing Services 35,227 1.6
Satellite Broadcasting 29,803 1.3
Financial Processors 29,194 1.3
Semiconductors &
Related Equipment 27,468 1.2
Business Software 24,321 1.1
Television Broadcasting 22,148 1.0
Instrumentation 20,996 0.9
Internet Related 14,566 0.6
Cable Television 12,155 0.5
Computer Services 11,620 0.5
Electronics Distribution 7,888 0.3
Publishing 6,143 0.3
Contract Manufacturing 2,235 0.1
- ----------------------------------------------------------------------------
308,430 13.6
>ENERGY/MINERALS
Oil Services 71,427 3.1
Mining 50,421 2.2
Oil/Gas Producers 49,520 2.2
Agricultural Commodities 15,511 0.7
Refining/Marketing/Distribution 15,207 0.7
Non-Ferrous Metals 11,947 0.5
Independent Power 1,879 0.1
- ----------------------------------------------------------------------------
215,912 9.5
>HEALTH CARE
Hospital Management 42,548 1.9
Services 32,938 1.5
Pharmaceuticals 30,203 1.3
Medical Equipment 28,048 1.2
Hospital/ Laboratory Supplies 17,786 0.8
- ----------------------------------------------------------------------------
151,523 6.7
>OTHER INDUSTRIES
Transportation 79,160 3.5
Real Estate 35,955 1.6
Regulated Utilities 31,527 1.4
- ----------------------------------------------------------------------------
146,642 6.5
TOTAL COMMON STOCKS AND
--------------------------
OTHER EQUITY-LIKE SECURITIES 2,178,670 96.0
SHORT-TERM OBLIGATIONS 83,035 3.7
--------------------------
TOTAL INVESTMENTS 2,261,705 99.7
CASH AND OTHER ASSETS
LESS LIABILITIES 6,552 0.3
--------------------------
NET ASSETS $ 2,268,257 100.0%
============================================================================
41
COLUMBIA ACORN USA
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
--------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
INFORMATION
American Tower 40,000 490,000
Navigant Consulting 0 98,300
Novell 1,330,000 1,850,000
Salem Communications 293,100 393,100
SSA Global Technologies 0 218,500
Tellabs 200,000 975,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
HNI 60,000 100,000
International Speedway Motors 241,300 271,300
- ----------------------------------------------------------------------------
HEALTH CARE
Advanced Medical Optics 0 94,171
Arrow International 0 100,000
Charles River Laboratories 40,000 220,000
Intermagnetics General 0 75,000
Neurocrine Biosciences 155,000 175,000
Serologicals 0 405,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Layne Christensen 156,700 242,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Genlyte Group 244,000 308,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Nordson 40,100 211,800
Quanta Services 300,000 400,000
Spartech 125,000 287,500
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Heartland Express 0 87,800
NUMBER OF SHARES
--------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
INFORMATION
Mediacom Communications 300,000 0
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Urban Outfitters 48,200 0
- ----------------------------------------------------------------------------
HEALTH CARE
CTI Molecular Imaging 245,000 0
VISX 170,600 0
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Equitable Resources 85,600 55,600
Quicksilver Resources 540,000 350,000
Range Resources 75,000 0
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Hub Group 206,000 0
Insurance Auto 41,900 0
1-800-922-6769
42
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 90.5%
- ------------------------------------------------------------------------------
INFORMATION: 27.4%
>TELECOMMUNICATION SERVICES: 7.3%
652,000 Western Wireless (b) $ 27,580
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 20,422
COMMUNICATION TOWERS
333,800 Commonwealth Telephone 13,990
RURAL PHONE FRANCHISES & CLEC
490,000 American Tower (b) 10,300
COMMUNICATION TOWERS IN USA & MEXICO
10,000 Telephone & Data Systems 408
10,000 Telephone & Data Systems Cl. S 383
CELLULAR & TELEPHONE SERVICES
- ------------------------------------------------------------------------------
73,083
>BUSINESS/CONSUMER SOFTWARE: 7.3%
501,200 Micros Systems (b) 22,429
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
1,850,000 Novell (b) 11,470
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
974,000 JDA Software Group (b) 11,084
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
266,650 Kronos (b) 10,770
LABOR MANAGEMENT SOLUTIONS
473,500 MRO Software (b) 6,918
ENTERPRISE MAINTENANCE SOFTWARE
260,000 Aspect Communications (b) 2,920
CALL CENTER SOFTWARE
218,500 SSA Global Technologies (b) 2,622
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
653,200 E.Piphany (b) 2,273
CRM SOFTWARE
60,000 Maximus 2,117
OUTSOURCER FOR GOVERNMENT
- ------------------------------------------------------------------------------
72,603
>COMPUTER HARDWARE/
SEMICONDUCTORS/RELATED
EQUIPMENT: 3.8%
365,300 Integrated Circuit Systems (b) 7,540
SILICON TIMING DEVICES
260,000 Unova (b) 6,924
BARCODE & WIRELESS LAN SYSTEMS
570,000 Symbol Technologies 5,626
MOBILE COMPUTERS & BARCODE SCANNERS
445,000 Entegris (b) 4,406
SEMICONDUCTOR WAGER SHIPPING & HANDLING PRODUCTS
99,000 Zebra Technologies (b) 4,335
BAR CODE PRINTERS
424,100 SeaChange International (b) 2,977
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
100,000 Belden CDT 2,120
SPECIALTY CABLE
70,000 Littelfuse (b) 1,950
LITTLE FUSES
40,000 Rogers (b) 1,622
PCB LAMINATES & HIGH PERFORMANCE FOAMS
- ------------------------------------------------------------------------------
37,500
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>BROADCASTING: 2.1%
393,100 Salem Communications (b) $ 7,799
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
695,000 Spanish Broadcasting (b) 6,943
SPANISH LANGUAGE RADIO STATIONS
610,000 Entravision Communications (b) 4,752
SPANISH LANGUAGE TV, RADIO & OUTDOOR
138,500 Gray Television 1,670
MID MARKET AFFILIATED TV STATIONS
- ------------------------------------------------------------------------------
21,164
>TELECOMMUNICATIONS EQUIPMENT: 1.8%
975,000 Tellabs (b) 8,483
TELECOMMUNICATIONS EQUIPMENT
480,000 Andrew (b) 6,125
WIRELESS INFRASTRUCTURE EQUIPMENT
300,000 Symmetricom (b) 3,111
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ------------------------------------------------------------------------------
17,719
>TRANSACTION PROCESSORS: 1.6%
211,640 Global Payments 14,349
CREDIT CARD PROCESSOR
143,100 Pegasus Systems (b) 1,596
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ------------------------------------------------------------------------------
15,945
>BUSINESS INFORMATION/BUSINESS
SERVICES/PUBLISHING: 1.1%
102,800 Getty Images (b) 7,634
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
90,000 Ceridian (b) 1,753
HR SERVICES & PAYMENT PROCESSING
98,300 Navigant Consulting (b) 1,736
FINANCIAL CONSULTING FIRM
- ------------------------------------------------------------------------------
11,123
>COMPUTER SERVICES: 0.8%
1,005,500 AnswerThink Consulting (b) 3,570
I/T INTEGRATION & BEST PRACTICE RESEARCH
786,000 RCM Technologies (b)(c) 3,333
TECHNOLOGY ENGINEERING SERVICES
200,000 Igate Capital (b) 716
I/T & BPO OUTSOURCING SERVICES
- ------------------------------------------------------------------------------
7,619
>INTERNET: 0.7%
460,600 DoubleClick (b) 3,864
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
285,000 ValueClick (b) 3,514
INTERNET ADVERTISING
- ------------------------------------------------------------------------------
7,378
>INSTRUMENTATION: 0.4%
90,000 Trimble Navigation (b) 3,507
GPS-BASED INSTRUMENTS
- ------------------------------------------------------------------------------
>ELECTRONICS DISTRIBUTION: 0.3%
60,000 CDW 3,425
TECHNOLOGY RESELLER
- ------------------------------------------------------------------------------
43
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>CONTRACT MANUFACTURING: 0.2%
117,700 Plexus (b) $ 1,675
ELECTRONIC MANUFACTURING SERVICES
- ------------------------------------------------------------------------------
-----------
INFORMATION: TOTAL 272,741
- ------------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 18.0%
>RETAIL: 8.0%
285,000 Abercrombie & Fitch 19,579
TEEN APPAREL RETAILER
435,750 Aeropostale (b) 14,641
MALL BASED TEEN RETAILER
360,000 Petco Animal Supplies (b) 10,555
PET SUPPLIES & SERVICES
230,000 Chico's FAS (b) 7,884
WOMEN'S SPECIALTY RETAILER
393,750 Christopher & Banks 7,190
WOMEN'S APPAREL RETAILER
212,500 Ann Taylor (b) 5,159
WOMEN'S APPAREL RETAILER
100,000 Michaels Stores 4,137
CRAFT & HOBBY SPECIALTY RETAILER
95,000 Genesco (b) 3,524
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
100,000 Sports Authority (b) 3,180
SPORTING GOODS STORES
141,200 Brookstone (b) 2,666
SPECIALTY CONSUMER PRODUCT RETAILER
60,000 West Marine (b) 1,084
LARGEST RETAILER OF BOATING SUPPLIES
- ------------------------------------------------------------------------------
79,599
>CONSUMER SERVICES: 4.0%
396,000 ITT Educational Services (b) 21,154
POSTSECONDARY DEGREE PROGRAMS
435,000 Coinstar (b) 9,870
OWNER/OPERATOR OF COIN COUNTING MACHINES
371,700 Central Parking 5,111
OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES
60,000 Weight Watchers (b) 3,097
WEIGHT LOSS PROGRAMS
- ------------------------------------------------------------------------------
39,232
>ENTERTAINMENT/LEISURE PRODUCTS: 1.8%
271,300 International Speedway Motors 15,263
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
195,000 Callaway Golf 3,009
PREMIUM GOLF CLUBS & BALLS
- ------------------------------------------------------------------------------
18,272
>APPAREL: 1.7%
194,200 Oxford Industries 8,360
BRANDED & PRIVATE LABEL APPAREL
168,000 Coach (b) 5,640
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
134,000 Steven Madden (b) 2,380
WHOLESALER/RETAILER OF FASHION FOOTWEAR
- ------------------------------------------------------------------------------
16,380
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>NONDURABLES: 1.3%
177,200 Scotts Company (b) $ 12,618
CONSUMER LAWN & GARDEN PRODUCTS
38,900 Prestige Brands (b) 759
OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS
- ------------------------------------------------------------------------------
13,377
>FURNITURE: 1.1%
100,000 HNI 5,115
OFFICE FURNITURE & FIREPLACES
85,000 Herman Miller 2,621
OFFICE FURNITURE
60,000 American Woodmark 1,801
KITCHEN CABINET MANUFACTURER
20,000 Mohawk Industries (b) 1,650
CARPET & FLOORING
- ------------------------------------------------------------------------------
11,187
>FOOD & BEVERAGES: 0.1%
37,000 NBTY (b) 960
VITAMINS & SUPPLEMENTS
- ------------------------------------------------------------------------------
-----------
CONSUMER GOODS/SERVICES: TOTAL 179,007
- ------------------------------------------------------------------------------
HEALTH CARE: 14.2%
>MEDICAL EQUIPMENT: 5.4%
573,000 Edwards Lifesciences (b) 24,650
HEART VALVES
221,300 Diagnostic Products 10,474
IMMUNODIAGNOSTIC KITS
220,000 Viasys Healthcare (b) 4,970
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
94,171 Advanced Medical Optics (b) 3,743
MEDICAL DEVICES FOR EYE CARE
115,700 ICU Medical (b) 3,722
INTRAVENOUS THERAPY PRODUCTS
100,000 Arrow International 3,190
DISPOSABLE CATHETERS
75,000 Intermagnetics General (b) 2,307
MRI EQUIPMENT
- ------------------------------------------------------------------------------
53,056
>SERVICES: 4.8%
220,000 Charles River Laboratories (b) 10,615
PHARMACEUTICAL RESEARCH
246,800 Lincare Holdings (b) 10,079
HOME HEALTH CARE SERVICES
133,250 Coventry Health Care (b) 9,427
PPO NETWORK
405,000 Serologicals (b) 8,606
BLOOD COLLECTION & ANTIBODY PRODUCTION
423,800 NDCHealth Group 7,616
HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES
100,000 Dendrite International (b) 1,380
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
- ------------------------------------------------------------------------------
47,723
1-800-922-6769
44
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY: 2.2%
175,000 Neurocrine Biosciences (b) $ 7,361
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
360,000 Nektar Therapeutics (b) 6,062
DRUG DELIVERY TECHNOLOGIES
260,000 AtheroGenics (b) 4,155
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID
ARTHRITIS, ASTHMA
315,000 Ligand Pharmaceuticals (b) 2,189
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
300,000 Lexicon Genetics (b) 1,482
DRUG DISCOVERY
375,000 Locus Discovery, Series D, Pfd. (d)(e) 750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
363,636 Metabolex, Series F (d)(e) 53
DRUGS FOR DIABETES
- ------------------------------------------------------------------------------
22,052
>MEDICAL SUPPLIES: 1.0%
222,800 Techne (b) 10,229
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
- ------------------------------------------------------------------------------
>PHARMACEUTICALS: 0.8%
245,500 Par Pharmaceuticals (b) 7,809
GENERICS
- ------------------------------------------------------------------------------
-----------
HEALTH CARE: TOTAL 140,869
- ------------------------------------------------------------------------------
ENERGY/MINERALS:11.8%
>OIL SERVICES: 6.1%
635,000 Chicago Bridge & Iron 14,516
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG
401,700 FMC Technologies (b) 12,842
OIL & GAS WELL HEAD MANUFACTURER
300,000 Pride International (b) 7,710
OFFSHORE DRILLING CONTRACTOR
941,000 Newpark Resources (b) 7,058
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
242,000 Layne Christensen (b) 4,807
WATER/MINERAL DRILLER & COAL SEAM GAS PRODUCER
355,000 Hanover Compressor (b) 4,086
NATURAL GAS COMPRESSOR RENTAL
266,800 Pioneer Drilling (b) 4,071
OIL & GAS WELL DRILLER
51,000 Carbo Ceramics 4,027
NATURAL GAS WELL STIMULANTS
135,000 Key Energy Services (b) 1,634
OIL & GAS WELL WORKOVER SERVICES
- ------------------------------------------------------------------------------
60,751
>OIL & GAS PRODUCERS: 4.0%
350,000 Quicksilver Resources (b) 22,376
NATURAL GAS & COAL SEAM GAS PRODUCER
272,000 Western Gas 9,493
OIL & COAL SEAM GAS PRODUCER
104,200 Southwestern Energy (b) 4,895
NATURAL GAS PRODUCER
450,000 Vaalco Energy (b) 1,557
OIL & GAS PRODUCER
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>OIL & GAS PRODUCERS--CONTINUED
70,000 McMoran Exploration (b) $ 1,366
NATURAL GAS PRODUCERS & LNG DEVELOPER
- ------------------------------------------------------------------------------
39,687
>DISTRIBUTION/MARKETING/REFINING: 1.7%
245,000 Oneok 7,999
NATURAL GAS UTILITY, MARKETING & PROCESSING
193,000 Atmos Energy 5,558
NATURAL GAS UTILITY
55,600 Equitable Resources 3,781
NATURAL GAS PRODUCER & UTILITY
- ------------------------------------------------------------------------------
17,338
-----------
ENERGY/MINERALS: TOTAL 117,776
- ------------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 9.7%
>MACHINERY: 5.0%
282,000 Esco Technologies (b) 28,426
FILTRATION & TEST EQUIPMENT
194,000 Pentair 8,305
PUMPS, WATER TREATMENT & TOOLS
211,800 Nordson 7,261
DISPENSING SYSTEMS FOR ADHESIVES & COATINGS
110,000 Ametek 4,603
AEROSPACE/INDUSTRIAL INSTRUMENTS
50,000 Kaydon 1,392
SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS
- ------------------------------------------------------------------------------
49,987
>INDUSTRIAL GOODS: 1.6%
308,000 Genlyte Group (b) 15,012
COMMERCIAL LIGHTING FIXTURES
25,000 Donaldson 758
INDUSTRIAL AIR FILTRATION
- ------------------------------------------------------------------------------
15,770
>WATER: 1.0%
134,000 Cuno (b) 9,573
FILTRATION & FLUIDS CLARIFICATION
- ------------------------------------------------------------------------------
>CONSTRUCTION: 0.8%
112,700 Florida Rock Industries 8,267
CONCRETE & AGGREGATES
- ------------------------------------------------------------------------------
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.5%
287,500 Spartech 5,118
PLASTICS DISTRIBUTION & COMPOUNDING
- ------------------------------------------------------------------------------
>OUTSOURCING SERVICES: 0.4%
400,000 Quanta Services (b) 3,520
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ------------------------------------------------------------------------------
>INDUSTRIAL DISTRIBUTION: 0.3%
113,000 Nuco2 (b) 2,901
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ------------------------------------------------------------------------------
45
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.1%
95,000 Clark $ 1,361
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
- ------------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 96,497
- ------------------------------------------------------------------------------
FINANCE: 8.7%
>FINANCE COMPANIES: 4.4%
1,091,500 AmeriCredit (b) 27,833
AUTO LENDING
520,200 World Acceptance (b) 15,632
PERSONAL LOANS
- ------------------------------------------------------------------------------
43,465
>INSURANCE: 2.6%
430,000 HCC Insurance Holdings 16,284
SPECIALTY INSURANCE
14,000 Markel (b) 4,746
SPECIALTY INSURANCE
35,000 Philadelphia Consolidated Holding (b) 2,967
SPECIALTY INSURANCE
91,000 United America Indemnity (b) 1,564
SPECIALTY INSURANCE
- ------------------------------------------------------------------------------
25,561
>BANKS: 1.3%
263,000 TCF Financial 6,806
GREAT LAKES BANK
197,656 Chittenden 5,376
VERMONT & WESTERN MASSACHUSETTS BANK
20,000 First Financial BankShares 677
WEST TEXAS BANK
30,000 West Bancorporation 564
DES MOINES COMMERCIAL BANK
- ------------------------------------------------------------------------------
13,423
>SAVINGS & LOAN: 0.4%
116,400 Anchor Bancorp Wisconsin 3,522
WISCONSIN THRIFT
- ------------------------------------------------------------------------------
-----------
FINANCE: TOTAL 85,971
- ------------------------------------------------------------------------------
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
OTHER INDUSTRIES: 0.7%
>REAL ESTATE: 0.2%
100,000 Crescent Real Estate Equities $ 1,875
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality 366
HOTEL REAL ESTATE INVESTMENT TRUST
- ------------------------------------------------------------------------------
2,241
>REGULATED UTILITIES: 0.2%
90,000 Northeast Utilities 1,877
REGULATED ELECTRIC UTILITY
- ------------------------------------------------------------------------------
>LOGISTICS: 0.2%
87,800 Heartland Express 1,706
REGIONAL DRY VAN TRUCKER
- ------------------------------------------------------------------------------
>WASTE MANAGEMENT: 0.1%
42,800 Waste Connections (b) 1,596
SOLID WASTE MANAGEMENT
- ------------------------------------------------------------------------------
-----------
OTHER INDUSTRIES: TOTAL 7,420
-----------
TOTAL COMMON STOCKS AND OTHER 900,281
EQUITY-LIKE SECURITIES: 90.5%
(COST: $601,302)
SHORT-TERM OBLIGATIONS: 9.8%
$ 33,000 Citigroup Funding 3.10% -
Due 7/1/05 33,000
33,000 LaSalle Bank 3.20% - Due 7/5/05 32,989
28,000 Verizon Network 3.26% -
Due 7/8/05 27,982
3,283 Repurchase Agreement with State
Street Bank & Trust dated 6/30/05,
due 7/01/05 at 3.00%
collateralized by Federal Home Loan
Mortgage Association
Notes, maturing 3/24/08 market
value $3,351 (repurchase
proceeds: $3,283) 3,283
- ------------------------------------------------------------------------------
(AMORTIZED COST: $97,254) 97,254
-----------
TOTAL INVESTMENTS: 100.3% 997,535
(COST: $698,556)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: (0.3)% (3,136)
-----------
TOTAL NET ASSETS: 100% $ 994,399
==============================================================================
1-800-922-6769
46
- --------------------------------------------------------------------------------
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$698,556 and net unrealized appreciation was $298,979 consisting of gross
unrealized appreciation of $332,259 and gross unrealized depreciation of
$33,280.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On June 30, 2005, the Fund held
five percent or more of the outstanding voting securities of the following
companies:
RCM Technologies 6.90%
The aggregate cost and value of this company at June 30, 2005, was $5,636
and $3,333, respectively. Investments in affiliate companies represent
0.3% of total net assets at June 30, 2005. Investment activity and income
amounts relating to affiliates during the six months ended June 30, 2005,
were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (622)
Purchases $ --
Proceeds from sales $ --
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At June 30, 2005, these securities were
illiquid. At June 30, 2005, these securities (in thousands) amounted to
$803 which represents 0.1% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES (000) COST (000) VALUE (000)
- ---------------------------------------------------------------------------------------
Locus Discovery, Series D, Pfd. 09/05/01 375 $ 1,500 $ 750
Metabolex, Series F 05/11/00 364 2,000 53
---------- -----------
$ 3,500 $ 803
========== ===========
(e) Represents fair value as determined in good faith under procedures by the
Board of Trustees.
47
COLUMBIA ACORN INTERNATIONAL SELECT
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Compass Group 220,000 400,000
Grafton Group (Ireland) 70,000 105,000
William Hill 0 80,000
>SWITZERLAND
BKW Energie 0 11,200
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
>SWEDEN
Gambro 0 38,900
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Ito En 12,000 32,800
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Anglo Irish Bank (Ireland) 282,442 244,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
>ITALY
Autogrill 70,000 0
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Fast Retailing 11,500 0
Olympus Optical 23,000 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Noranda 50,000 0
1-800-922-6769
48
COLUMBIA ACORN INTERNATIONAL SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
COMMON STOCKS: 95.7%
- ------------------------------------------------------------------------------
EUROPE: 60.3%
>UNITED KINGDOM/IRELAND: 22.4%
244,000 Anglo Irish Bank (Ireland) $ 3,022
SMALL BUSINESS & MIDDLE MARKET BANKING
192,000 Exel 2,907
GLOBAL LOGISTICS & FREIGHT FORWARDING
132,000 Depfa Bank (Ireland) 2,109
INTERNATIONAL PUBLIC SECTOR FINANCE
130,000 IAWS (Ireland) 1,816
MANUFACTURER OF BAKED GOODS
400,000 Compass Group 1,678
INTERNATIONAL CONCESSION & CONTRACT CATERER
105,000 Grafton Group (Ireland) (b) 1,215
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
80,000 William Hill 770
LARGEST BOOKMAKER
80,000 British Sky Broadcasting 754
DIGITAL SATELLITE BROADCASTING
40,000 Intermediate Capital 746
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
25,000 Kerry (Ireland) 617
FOOD INGREDIENTS
17,000 Cobham 431
AEROSPACE COMPONENTS
- ------------------------------------------------------------------------------
16,065
>FRANCE/BELGIUM: 13.2%
33,000 Neopost 2,900
POSTAGE METER MACHINES
170,000 SES Global 2,559
SATELLITE BROADCASTING SERVICES
27,000 Imerys 1,856
INDUSTRIAL MINERALS PRODUCER
34,000 Belgacom (Belgium) 1,158
TELECOM SERVICE PROVIDER
14,500 Essilor International 987
EYEGLASS LENSES
- ------------------------------------------------------------------------------
9,460
>SWITZERLAND: 12.1%
10,200 Kuehne & Nagel 2,157
FREIGHT FORWARDING/LOGISTICS
14,000 Swatch Group 1,959
WATCH & ELECTRONICS MANUFACTURER
1,900 Geberit International 1,212
PLUMBING SUPPLIES
10,000 Synthes 1,094
PRODUCTS FOR ORTHOPEDIC SURGERY
2,300 Schindler 828
ELEVATOR MANUFACTURER & SERVICE PROVIDER
11,200 BKW Energie 700
ELECTRIC UTILITY
1,200 Givaudan 696
INDUSTRIAL FRAGRANCES & FLAVORS
- ------------------------------------------------------------------------------
8,646
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>NORWAY: 3.6%
157,500 Den Norske Bank $ 1,632
LARGEST NORWEGIAN BANK
26,000 Orkla 953
FOOD & DIVERSIFIED CONSUMER GOODS
- ------------------------------------------------------------------------------
2,585
>CZECH REPUBLIC: 2.9%
16,840 Komercni Banka 2,109
LEADING CZECH UNIVERSAL BANK
- ------------------------------------------------------------------------------
>SPAIN: 2.8%
73,000 Red Electrica 2,015
SPANISH POWER GRID
- ------------------------------------------------------------------------------
>GERMANY: 2.6%
13,000 Deutsche Boerse 1,014
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
12,000 Rhoen-Klinikum 830
HOSPITAL MANAGEMENT
- ------------------------------------------------------------------------------
1,844
>SWEDEN: 0.7%
38,900 Gambro 519
PRODUCTS/SERVICES FOR RENAL CARE
- ------------------------------------------------------------------------------
-----------
EUROPE: TOTAL 43,243
- ------------------------------------------------------------------------------
ASIA: 23.7%
>JAPAN: 17.4%
68,000 Shimano 1,930
BICYCLE COMPONENTS & FISHING TACKLE
16,200 Hoya 1,861
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
48,000 Daito Trust Construction 1,792
APARTMENT BUILDER
32,800 Ito En 1,682
BOTTLED TEA & OTHER BEVERAGES
1,627 Jupiter Telecommunications (b) 1,367
LARGEST CABLE SERVICE PROVIDER IN JAPAN
77,000 Ushio 1,365
INDUSTRIAL LIGHT SOURCES
11,000 Funai Electric 1,125
CONSUMER ELECTRONICS
181,800 Hiroshima Bank 826
REGIONAL BANK
94,000 Bank of Yokohama 540
REGIONAL BANK
- ------------------------------------------------------------------------------
12,488
>HONG KONG/CHINA: 4.1%
650,000 Hong Kong Exchanges & Clearing 1,684
HONG KONG EQUITY & DERIVATIVES OPERATOR
2,000,000 Global Bio-Chem Technology
Group (China) 1,239
REFINER OF CORN-BASED COMMODITIES
- ------------------------------------------------------------------------------
2,923
49
COLUMBIA ACORN INTERNATIONAL SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>SINGAPORE: 2.2%
1,600,000 Comfort Del Gro $ 1,599
TAXI & MASS TRANSIT SERVICE
- ------------------------------------------------------------------------------
-----------
ASIA: TOTAL 17,010
- ------------------------------------------------------------------------------
OTHER COUNTRIES: 7.7%
>CANADA: 5.0%
300,000 Kinross Gold (b) 1,833
GOLD MINING
47,000 Talisman Energy 1,758
OIL & GAS PRODUCER
- ------------------------------------------------------------------------------
3,591
>AUSTRALIA: 2.7%
330,000 Lion Nathan 1,897
BEER BREWER/DISTRIBUTOR
- ------------------------------------------------------------------------------
-----------
OTHER: TOTAL 5,488
- ------------------------------------------------------------------------------
LATIN AMERICA: 4.0%
>ARGENTINA: 4.0%
37,000 Tenaris 2,896
STEEL PIPE FOR OIL WELLS & PIPELINES
- ------------------------------------------------------------------------------
-----------
LATIN AMERICA: TOTAL 2,896
-----------
TOTAL COMMON STOCKS: 95.7% 68,637
(COST: $53,994)
PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATION: 4.3%
$ 3,087 Repurchase Agreement with
State Street Bank & Trust
dated 6/30/05, due 7/1/05
at 3.00% collateralized by
Federal National Mortgage
Association Notes, maturing
3/24/08 market value
$3,149 (repurchase
proceeds: $3,087) $ 3,087
- ------------------------------------------------------------------------------
(COST: $3,087) 3,087
-----------
TOTAL INVESTMENTS: 100.0% 71,724
(COST: $57,081)(a)(C)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (14)
-----------
TOTAL NET ASSETS: 100% $ 71,710
==============================================================================
- --------------------------------------------------------------------------------
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purpose cost of investments was
$57,081 and net unrealized appreciation was $14,643 consisting of gross
unrealized appreciation of $16,972 and gross unrealized depreciation of
$2,329.
(b) Non-income producing security.
(c) On June 30, 2005, the Fund's total investments were denominated in
currencies as follows:
% OF
TOTAL
CURRENCY VALUE NET ASSETS
--------------------------------------------------
Euro $22,098 30.8%
Japanese Yen 12,488 17.4
Swiss Franc 8,646 12.1
British Pounds 7,285 10.2
US Dollar 5,983 8.3
Canadian Dollar 3,591 5.0
Other currencies less
than 5% of total
net assets 11,633 16.2
------- -------
$71,724 100.0%
======= =======
1-800-922-6769
50
COLUMBIA ACORN INTERNATIONAL SELECT
>PORTFOLIO DIVERSIFICATION (UNAUDITED)
At June 30, 2005, the Fund's portfolio investments as a percent of net assets
was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 5,892 8.2%
Industrial Materials 3,068 4.3
Machinery 2,900 4.1
Steel 2,896 4.0
Electrical Components 1,796 2.5
Construction 1,792 2.5
Industrial Distribution 1,215 1.7
Specialty Chemicals 696 1.0
- ----------------------------------------------------------------------------
20,255 28.3
>CONSUMER GOODS/SERVICES
Durable Goods 3,889 5.4
Beverages 3,579 5.0
Food 2,433 3.4
Restaurants 1,678 2.3
Consumer Electronics 1,125 1.6
Non-Durables 953 1.3
Gaming 770 1.1
- ----------------------------------------------------------------------------
14,427 20.1
>FINANCE
Banks 10,238 14.3
Other Finance Companies 746 1.0
- ----------------------------------------------------------------------------
10,984 15.3
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Financial Processors $ 2,698 3.8%
Satellite Broadcasting and
Services 2,559 3.6
Semiconductors and Related
Equipment 1,861 2.6
Cable Television 1,367 1.9
Telephone Services 1,158 1.6
Television Broadcasting 754 1.0
- ----------------------------------------------------------------------------
10,397 14.5
>ENERGY/MINERALS
Non-Ferrous Metals 1,833 2.6
Oil/Gas Producers 1,758 2.4
Agricultural Commodities
(includes Forestry) 1,239 1.7
- ----------------------------------------------------------------------------
4,830 6.7
>HEALTH CARE
Medical Equipment 2,081 2.9
Hospital Management 830 1.2
HealthCare Services 519 0.7
- ----------------------------------------------------------------------------
3,430 4.8
>OTHER INDUSTRIES
Regulated Utilities 2,715 3.8
Transportation 1,599 2.2
- ----------------------------------------------------------------------------
4,314 6.0
---------------------------
TOTAL COMMON STOCKS 68,637 95.7
SHORT-TERM OBLIGATION 3,087 4.3
---------------------------
TOTAL INVESTMENTS 71,724 100.0
CASH AND OTHER ASSETS
LESS LIABILITIES (14) 0.0
---------------------------
NET ASSETS $ 71,710 100.0%
============================================================================
51
COLUMBIA ACORN SELECT
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Coach 1,260,000 1,400,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Costco 820,000 845,000
ITT Educational Services 1,451,000 1,550,000
International Speedway Motors 550,000 670,000
- ----------------------------------------------------------------------------
INFORMATION
American Tower 2,300,000 2,350,000
Aspect Communications 2,074,700 2,182,000
CDW 525,000 690,000
Novell 4,000,000 5,000,000
Tellabs 8,100,000 8,900,000
Tribune Company 0 490,000
- ----------------------------------------------------------------------------
FINANCE
Conseco 0 1,800,000
Nuveen Investments 0 975,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Mine Safety Appliances 0 850,000
Quanta Services 1,576,000 2,810,000
Spartech 0 173,000
Worthington Industries 0 2,000,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 400,000 450,000
Pride International 1,654,000 1,854,000
NUMBER OF SHARES
---------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Herman Miller 1,160,000 471,032
- ----------------------------------------------------------------------------
INFORMATION
FTI Consulting 925,000 143,200
McAfee 2,539,900 0
Moodys 940,000 0
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Synopsys 860,000 0
1-800-922-6769
52
COLUMBIA ACORN SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
COMMON STOCKS: 90.6%
- ------------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 29.4%
>RETAIL: 11.4%
3,000,000 Safeway $ 67,770
RETAIL FOOD & DRUG STORES
975,000 Abercrombie & Fitch 66,982
TEEN APPAREL RETAILER
845,000 Costco 37,873
WAREHOUSE SUPERSTORES
- ------------------------------------------------------------------------------
172,625
>CONSUMER SERVICES: 8.0%
1,550,000 ITT Educational Services (b) 82,801
POSTSECONDARY DEGREE PROGRAMS
728,000 Weight Watchers (b) 37,572
WEIGHT LOSS PROGRAM
- ------------------------------------------------------------------------------
120,373
>FURNITURE & MANUFACTURERS: 4.1%
1,400,000 Coach (b) 46,998
DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES
471,032 Herman Miller 14,527
OFFICE FURNITURE
- ------------------------------------------------------------------------------
61,525
>LEISURE VEHICLES: 3.4%
1,050,000 Harley-Davidson 52,080
MOTORCYCLES & RELATED MERCHANDISE
- ------------------------------------------------------------------------------
>ENTERTAINMENT: 2.5%
670,000 International Speedway Motors 37,694
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- ------------------------------------------------------------------------------
-----------
CONSUMER GOODS/SERVICES: TOTAL 444,297
- ------------------------------------------------------------------------------
INFORMATION: 26.3%
>TELECOMMUNICATIONS EQUIPMENT: 5.1%
8,900,000 Tellabs (b) 77,430
TELECOMMUNICATIONS EQUIPMENT
- ------------------------------------------------------------------------------
>BUSINESS SOFTWARE: 3.7%
5,000,000 Novell (b) 31,000
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
2,182,000 Aspect Communications (b) 24,504
CALL CENTER SOFTWARE
- ------------------------------------------------------------------------------
55,504
>INTERNET: 3.5%
9,600,000 Skillsoft Publishing (b)(c) 33,120
PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING)
820,000 IAC/Interactive Corp (b) 19,721
DOMINATE INTERNET MIDDLEMAN
- ------------------------------------------------------------------------------
52,841
>MOBILE COMMUNICATIONS: 3.3%
2,350,000 American Tower (b) 49,397
COMMUNICATION TOWERS IN USA & MEXICO
- ------------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
>TELEVISION PROGRAMMING/CATV: 2.8%
896,350 Liberty Global (formerly known
as Liberty Media International) (b) $41,833
CATV HOLDING COMPANY
- ------------------------------------------------------------------------------
>ELECTRONICS DISTRIBUTION: 2.6%
690,000 CDW 39,392
TECHNOLOGY RESELLER
- ------------------------------------------------------------------------------
>INSTRUMENTATION: 2.1%
1,400,000 Tektronix 32,578
ANALYTICAL INSTRUMENTS
- ------------------------------------------------------------------------------
>BUSINESS INFORMATION: 1.5%
537,800 Fair Isaac 19,630
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
143,200 FTI Consulting (b) 2,993
FINANCIAL CONSULTING FIRM
- ------------------------------------------------------------------------------
22,623
>PUBLISHING: 1.1%
490,000 Tribune Company 17,238
NEWSPAPERS & TV STATIONS
- ------------------------------------------------------------------------------
>COMPUTER SERVICES: 0.6%
2,445,000 AnswerThink Consulting (b)(c) 8,680
I/T INTEGRATION & BEST PRACTICE RESEARCH
- ------------------------------------------------------------------------------
-----------
INFORMATION: TOTAL 397,516
- ------------------------------------------------------------------------------
FINANCE: 17.1%
>MONEY MANAGEMENT: 6.7%
2,500,000 Janus Capital 37,600
MANAGES MUTUAL FUNDS
975,000 Nuveen Investments 36,680
SPECIALTY MUTUAL FUNDS
729,500 SEI Investments 27,247
MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT
- ------------------------------------------------------------------------------
101,527
>INSURANCE: 5.3%
120,000 Markel (b) 40,680
SPECIALTY INSURANCE
1,800,000 Conseco (b) 39,276
INDIVIDUAL LIFE INSURANCE & ANNUITY PRODUCTS
- ------------------------------------------------------------------------------
79,956
>BANKS: 5.1%
1,970,000 TCF Financial 50,984
GREAT LAKES BANK
750,000 Associated Banc-Corp 25,245
MIDWEST BANK
- ------------------------------------------------------------------------------
76,229
-----------
FINANCE: TOTAL 257,712
- ------------------------------------------------------------------------------
53
NUMBER OF SHARES VALUE (000)
- ------------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 8.7%
>INDUSTRIAL GOODS: 2.6%
850,000 Mine Safety Appliances $ 39,270
SAFETY EQUIPMENT
- ------------------------------------------------------------------------------
>LOGISTICS: 2.2%
661,000 Expeditors International
of Washington 32,924
INTERNATIONAL FREIGHT FORWARDER
- ------------------------------------------------------------------------------
>STEEL: 2.1%
2,000,000 Worthington Industries 31,600
STEEL PROCESSING
- ------------------------------------------------------------------------------
>OUTSOURCING SERVICES & TRAINING: 1.6%
2,810,000 Quanta Services (b) 24,728
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ------------------------------------------------------------------------------
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 0.2%
173,000 Spartech 3,079
PLASTICS DISTRIBUTION & COMPOUNDING
- ------------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 131,601
- ------------------------------------------------------------------------------
HEALTH CARE: 5.0%
>SERVICES: 5.0%
530,000 Coventry Health Care (b) 37,497
PPO NETWORK
910,000 Lincare Holdings (b) 37,164
HOME HEALTH CARE SERVICES
- ------------------------------------------------------------------------------
74,661
-----------
HEALTH CARE: TOTAL 74,661
- ------------------------------------------------------------------------------
ENERGY/MINERALS: 4.1%
>OIL SERVICES: 4.1%
1,854,000 Pride International (b) 47,648
OFFSHORE DRILLING CONTRACTOR
450,000 FMC Technologies (b) 14,386
OIL & GAS WELL HEAD MANUFACTURER
- ------------------------------------------------------------------------------
62,034
-----------
ENERGY & MINERALS: TOTAL 62,034
-----------
TOTAL COMMON STOCKS: 90.6% 1,367,821
(COST: $1,146,802)
PRINCIPAL AMOUNT (000) VALUE (000)
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 8.3%
$ 32,000 Toyota Motor Credit 3.25% -
Due 7/6/05 $ 31,985
30,000 General Electric Capital 3.25% -
Due 7/7/05 29,984
26,000 Prudential Funding 3.10% -
Due 7/1/05 26,000
26,000 LaSalle Bank 3.20% - Due 7/5/05 25,991
11,354 Repurchase Agreement with
State Street Bank & Trust
dated 6/30/05, due 7/1/05 at
3.00% collateralized by
Federal National Mortgage
Association Notes, maturing
3/24/08 market value
$11,583 (repurchase
proceeds: $11,355) 11,354
- ------------------------------------------------------------------------------
(AMORTIZED COST: $125,314) 125,314
-----------
TOTAL INVESTMENTS: 98.9% 1,493,135
(COST: $1,272,116)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.1% 17,357
-----------
TOTAL NET ASSETS: 100% $ 1,510,492
==============================================================================
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$1,272,116 and net unrealized appreciation was $221,019 consisting of
gross unrealized appreciation of $262,819 and gross unrealized
depreciation of $41,800.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On June 30, 2005, the Fund held
five percent or more of the outstanding voting securities of the following
companies:
Skillsoft Publishing 8.98%
AnswerThink Consulting 5.69
The aggregate cost and value of these companies at June 30, 2005, was
$71,464 and $41,800 respectively. Investments in affiliate companies
represent 2.8% of total net assets at June 30, 2005. Investment activity
and income amounts relating to affiliates during the six months ended June
30, 2005, were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (22,985)
Purchases $ 13,030
Proceeds from sales $ --
1-800-922-6769
54
COLUMBIA ACORN FAMILY OF FUNDS
> STATEMENTS OF ASSETS AND LIABILITIES
> STATEMENTS OF OPERATIONS
> STATEMENTS OF CHANGES IN NET ASSETS
> FINANCIAL HIGHLIGHTS
> NOTES TO FINANCIAL STATEMENTS
55
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
JUNE 30, 2005 FUND INTERNATIONAL USA
- ------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at cost $ 7,516,154 $ 1,610,554 $ 692,920
Affiliated investments, at cost (See Note 4) 1,549,261 -- 5,636
- ------------------------------------------------------------------------------------------------------------------------------
Unaffiliated investments, at value $ 12,511,138 $ 2,261,705 $ 994,202
Affiliated investments, at value (See Note 4) 1,988,672 -- 3,333
Cash 1 --* --*
Foreign currency (cost: Columbia Acorn Fund $2,163;
Columbia Acorn International $1,853; Columbia
Acorn International Select $44) 2,150 1,850 --
Receivable for:
Investments sold 22,839 19,931 --
Fund shares sold 21,664 2,402 1,275
Dividends and interest 7,263 4,474 191
Payment on a liquidated security 161 -- 54
Foreign tax reclaims 1,020 839 4
Deferred Trustees' Compensation Investments 1,362 419 95
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 14,556,270 2,291,620 999,154
LIABILITIES:
Expense reimbursement due to Investment Adviser -- -- --
Payable for:
Investments purchased 21,915 18,883 2,652
Fund shares redeemed 16,061 1,752 888
Management fee 7,487 1,464 704
Administration fee 520 82 34
12b-1 Service & Distribution fees 2,579 86 110
Reports to shareholders 1,695 321 146
Deferred Trustees' fees 1,362 419 95
Transfer agent fees 594 87 38
Trustees' fees 42 -- --
Custody fees 23 81 2
Deferred foreign capital gains tax payable -- 2 --
Other liabilities 1,185 186 86
- ------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 53,463 23,363 4,755
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399
==============================================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 8,620,923 $ 1,570,855 $ 666,167
Undistributed (Overdistributed) net investment
income (Accumulated net investment loss) 7,920 3,915 1,568
Accumulated net realized gain (loss) 439,517 42,430 27,631
Net unrealized appreciation (depreciation) on:
Investments 5,434,395 651,151 298,979
Foreign currency translations (109) (91) --
Foreign capital gains tax -- (3) --
Liquidated security 161 -- 54
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399
==============================================================================================================================
Net asset value per share -
Class A (a) $ 26.21 $ 29.23 $ 25.73
(Net assets/shares) ($2,852,237/108,814) ($88,608/3,032) ($126,647/4,923)
Maximum offering price per share -
Class A (b) $ 27.81 $ 31.01 $ 27.30
(Net asset value per share/
front-end sales charge) ($26.21/0.9425) ($29.23/0.9425) ($25.73/0.9425)
Net asset value and offering price
per share - Class B (a) $ 25.37 $ 28.74 $ 24.97
(Net assets/shares) ($1,365,518/53,831) ($60,364/2,100) ($71,766/2,874)
Net asset value and offering price
per share - Class C (a) $ 25.35 $ 28.73 $ 24.96
(Net assets/shares) ($1,102,416/43,491) ($35,220/1,226) ($41,376/1,657)
Net asset value and offering price
per share - Class Z (a) $ 26.79 $ 29.46 $ 26.21
(Net assets/shares) ($9,182,636/342,777) ($2,084,065/70,732) ($754,610/28,787)
COLUMBIA COLUMBIA
ACORN ACORN
JUNE 30, 2005 INTERNATIONAL SELECT SELECT
- ------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at cost $ 57,081 $ 1,200,652
Affiliated investments, at cost (See Note 4) -- 71,464
- ------------------------------------------------------------------------------------------------------
Unaffiliated investments, at value $ 71,724 $ 1,451,335
Affiliated investments, at value (See Note 4) -- 41,800
Cash 1 1
Foreign currency (cost: Columbia Acorn Fund $2,163;
Columbia Acorn International $1,853; Columbia
Acorn International Select $44) 44 --
Receivable for:
Investments sold -- 12,593
Fund shares sold 101 8,263
Dividends and interest 90 242
Payment on a liquidated security -- --
Foreign tax reclaims 39 --
Deferred Trustees' Compensation Investments -- --
- ------------------------------------------------------------------------------------------------------
Total Assets 71,999 1,514,234
LIABILITIES:
Expense reimbursement due to Investment Adviser 1 --
Payable for:
Investments purchased 149 436
Fund shares redeemed 9 1,555
Management fee 55 971
Administration fee 2 52
12b-1 Service & Distribution fees 7 381
Reports to shareholders 37 205
Deferred Trustees' fees 12 47
Transfer agent fees 5 63
Trustees' fees 3 --
Custody fees -- 3
Deferred foreign capital gains tax payable -- --
Other liabilities 9 29
- ------------------------------------------------------------------------------------------------------
Total Liabilities 289 3,742
- ------------------------------------------------------------------------------------------------------
NET ASSETS $ 71,710 $ 1,510,492
======================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 88,128 $ 1,260,521
Undistributed (Overdistributed) net investment
income (Accumulated net investment loss) (554) (3,585)
Accumulated net realized gain (loss) (30,502) 32,537
Net unrealized appreciation (depreciation) on:
Investments 14,643 221,019
Foreign currency translations (5) --
Foreign capital gains tax -- --
Liquidated security -- --
- ------------------------------------------------------------------------------------------------------
NET ASSETS $ 71,710 $ 1,510,492
======================================================================================================
Net asset value per share -
Class A (a) $ 17.69 $ 20.68
(Net assets/shares) ($6,175/349) ($638,215/30,866)
Maximum offering price per share -
Class A (b) $ 18.77 $ 21.94
(Net asset value per share/
front-end sales charge) ($17.69/0.9425) ($20.68/0.9425)
Net asset value and offering price
per share - Class B (a) $ 17.25 $ 20.01
(Net assets/shares) ($5,779/335) ($193,930/9,693)
Net asset value and offering price
per share - Class C (a) $ 17.26 $ 20.00
(Net assets/shares) ($3,246/188) ($129,129/6,457)
Net asset value and offering price
per share - Class Z (a) $ 17.84 $ 20.97
(Net assets/shares) ($56,510/3,168) ($549,218/26,192)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge and/or applicable redemption fee.
(b) On sales of $50,000 or more the offering price is reduced.
* Rounds to less than $500.
See accompanying notes to financial statements.
1-800-922-6769
56
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
(IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT
- ----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income $ 71,373 $ 31,907 $ 5,871 $ 1,004 $ 3,502
Dividend income from affiliates
(See Note 4) 14,830 -- -- -- --
Interest income 14,191 1,190 1,165 53 1,789
- ----------------------------------------------------------------------------------------------------------------------
100,394 33,097 7,036 1,057 5,291
Foreign taxes withheld (3,008) (2,545) (6) (94) --
- ----------------------------------------------------------------------------------------------------------------------
Total Investment Income 97,386 30,552 7,030 963 5,291
EXPENSES:
Management fee 44,457 8,705 4,040 315 5,556
Administration fee 2,969 471 193 14 287
12b-1 Service and Distribution fees:
Class A 3,343 99 143 7 686
Class B 5,677 244 295 23 772
Class C 5,276 164 193 14 569
Transfer agent fees:
Class A 1,039 45 57 4 247
Class B 1,134 67 66 9 200
Class C 640 26 26 3 91
Class Z 1,293 639 122 33 200
Custody fees 826 787 16 30 19
Trustees' fees 323 53 21 20 65
Registration & blue sky fees 538 208 94 33 118
Compliance fees 259 40 16 1 24
Non-recurring costs (See Note 8) 85 13 6 --* 8
Other expenses 1,969 281 146 42 224
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 69,828 11,842 5,434 548 9,066
Less custody fees paid indirectly (18) (1) (2) --* (4)
Less reimbursement of expenses by
Investment Adviser -- -- -- (7) --
Less expenses waived by Investment Adviser (395) (39) (16) (1) (117)
Less reimbursement of expenses by Transfer
Agent (785) (200) (51) (11) (118)
Non-recurring costs reimbursed (See Note 8) (85) (13) (6) --* (8)
- ----------------------------------------------------------------------------------------------------------------------
Net Expenses 68,545 11,589 5,359 529 8,819
- ----------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 28,841 18,963 1,671 434 (3,528)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Unaffiliated investments 440,635 106,812 30,997 664 32,796
Affiliated investments (See Note 4) 1,653 -- -- -- --
Foreign currency transactions (344) (638) -- (15) --
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain 441,944 106,174 30,997 649 32,796
======================================================================================================================
Net change in net unrealized appreciation
(depreciation) on:
Unaffiliated investments (50,748) (64,434) 19,017 (885) 1
Affiliated investments (See Note 4) (41,103) -- (622) -- (22,985)
Foreign currency translations (499) (527) -- (7) --
Foreign capital gains tax -- (3) -- -- --
Liquidated security 161 -- 54 -- --
- ----------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) (92,189) (64,964) 18,449 (892) (22,984)
======================================================================================================================
Net realized and unrealized gain (loss) 349,755 41,210 49,446 (243) 9,812
- ----------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets resulting
from Operations $ 378,596 $ 60,173 $ 51,117 $ 191 $ 6,284
======================================================================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
57
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
OPERATIONS:
Net investment income (loss) $ 28,841 $ (13,051) $ 18,963 $ 16,703
Net realized gain on investments and
foreign currency transactions 441,944 693,184 106,174 175,881
Net change in net unrealized appreciation
(depreciation) on investments, foreign
currency translations, foreign capital
gains tax and liquidated security (92,189) 1,701,999 (64,964) 276,935
- -------------------------------------------------------------------------------------------------------
Net Increase from Operations 378,596 2,382,132 60,173 469,519
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (966) (374)
Net realized gain -- Class A (41,222) (89,952) -- --
Net investment income -- Class B -- -- (281) (75)
Net realized gain -- Class B (20,635) (49,011) -- --
Net investment income -- Class C -- -- (172) (42)
Net realized gain -- Class C (16,577) (37,671) -- --
Net investment income -- Class Z -- (5,620) (29,780) (16,439)
Net realized gain -- Class Z (130,799) (290,184) -- --
- -------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders (209,233) (472,438) (31,199) (16,930)
SHARE TRANSACTIONS:
Subscriptions -- Class A 415,008 703,271 22,421 19,736
Distributions reinvested -- Class A 37,158 81,405 785 306
Redemptions -- Class A (302,648) (453,387) (6,328) (17,531)
- -------------------------------------------------------------------------------------------------------
Net Increase -- Class A 149,518 331,289 16,878 2,511
Subscriptions -- Class B 27,942 90,732 9,579 10,422
Distributions reinvested -- Class B 18,804 44,616 247 66
Redemptions -- Class B (89,021) (146,696) (5,267) (7,152)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (42,275) (11,348) 4,559 3,336
Subscriptions -- Class C 78,997 145,878 6,602 8,030
Distributions reinvested -- Class C 13,377 30,636 141 35
Redemptions -- Class C (80,206) (136,434) (2,650) (6,936)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 12,168 40,080 4,093 1,129
Subscriptions -- Class Z 805,490 1,596,519 278,879 206,434
Distributions reinvested -- Class Z 112,557 254,191 23,508 14,669
Redemptions -- Class Z (545,473) (1,447,781) (163,679) (284,074)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 372,574 402,929 138,708 (62,971)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share
Transactions 491,985 762,950 164,238 (55,995)
- -------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 33 86
- -------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 661,348 2,672,644 193,245 396,680
NET ASSETS:
Beginning of period 13,841,459 11,168,815 2,075,012 1,678,332
- -------------------------------------------------------------------------------------------------------
End of period $14,502,807 $13,841,459 $2,268,257 $2,075,012
=======================================================================================================
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME OR (ACCUMULATED
NET INVESTMENT LOSS) $ 7,920 $ (20,921) $ 3,915 $ 16,151
=======================================================================================================
COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN USA INTERNATIONAL SELECT ACORN SELECT
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004 2005 2004
OPERATIONS:
Net investment income (loss) $ 1,671 $ (6,571) $ 434 $ 51 $ (3,528) $ (8,994)
Net realized gain on investments and
foreign currency transactions 30,997 28,245 649 7,208 32,796 47,420
Net change in net unrealized appreciation
(depreciation) on investments, foreign
currency translations, foreign capital
gains tax
and liquidated security 18,449 121,948 (892) 2,762 (22,984) 133,791
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase from Operations 51,117 143,622 191 10,021 6,284 172,217
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (79) (6) -- --
Net realized gain -- Class A (1,741) (622) -- -- (2,737) (10,300)
Net investment income -- Class B -- -- (46) -- -- --
Net realized gain -- Class B (1,039) (415) -- -- (885) (3,895)
Net investment income -- Class C -- -- (24) -- -- --
Net realized gain -- Class C (592) (224) -- -- (576) (2,321)
Net investment income -- Class Z -- -- (888) (151) -- --
Net realized gain -- Class Z (10,141) (3,487) -- -- (3,269) (8,700)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders (13,513) (4,748) (1,037) (157) (7,467) (25,216)
SHARE TRANSACTIONS:
Subscriptions -- Class A 20,621 27,362 2,233 1,860 185,756 274,350
Distributions reinvested -- Class A 1,590 572 71 5 2,555 9,614
Redemptions -- Class A (12,727) (22,954) (408) (763) (66,604) (91,343)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 9,484 4,980 1,896 1,102 121,707 192,621
Subscriptions -- Class B 1,922 4,936 1,294 1,664 21,878 61,755
Distributions reinvested -- Class B 948 375 41 -- 795 3,496
Redemptions -- Class B (6,087) (10,452) (614) (586) (12,553) (19,113)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (3,217) (5,141) 721 1,078 10,120 46,138
Subscriptions -- Class C 3,125 5,707 1,001 786 32,636 49,173
Distributions reinvested -- Class C 490 187 20 -- 473 1,934
Redemptions -- Class C (3,206) (8,114) (291) (2,429) (13,807) (17,236)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 409 (2,220) 730 (1,643) 19,302 33,871
Subscriptions -- Class Z 111,981 199,048 13,951 11,787 180,330 204,740
Distributions reinvested -- Class Z 8,943 3,134 582 146 2,389 6,716
Redemptions -- Class Z (41,487) (161,267) (3,618) (7,456) (79,260) (114,619)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 79,437 40,915 10,915 4,477 103,459 96,837
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share
Transactions 86,113 38,534 14,262 5,014 254,588 369,467
- -----------------------------------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 6 4 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 123,717 177,408 13,422 14,882 253,405 516,468
NET ASSETS:
Beginning of period 870,682 693,274 58,288 43,406 1,257,087 740,619
- -----------------------------------------------------------------------------------------------------------------------------------
End of period $ 994,399 $ 870,682 $ 71,710 $ 58,288 $1,510,492 $1,257,087
===================================================================================================================================
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME OR (ACCUMULATED NET
INVESTMENT LOSS) $ 1,568 $ (103) $ (554) $ 49 $ (3,585) $ (57)
===================================================================================================================================
See accompanying notes to financial statements.
1-800-922-6769
Spread 58-59
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
Subscriptions -- Class A 16,259 29,671 765 809
Shares issued in reinvestment and capital
gains -- Class A 1,446 3,255 27 13
Less shares redeemed -- Class A (11,869) (19,230) (215) (722)
- -------------------------------------------------------------------------------------------------------
Net Increase -- Class A 5,836 13,696 577 100
Subscriptions -- Class B 1,130 3,928 332 438
Shares issued in reinvestment and capital
gains -- Class B 756 1,836 8 3
Less shares redeemed -- Class B (3,599) (6,388) (183) (301)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (1,713) (624) 157 140
Subscriptions -- Class C 3,191 6,282 229 333
Shares issued in reinvestment and capital
gains -- Class C 538 1,261 5 2
Less shares redeemed -- Class C (3,242) (5,916) (92) (293)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 487 1,627 142 42
Subscriptions -- Class Z 30,921 66,041 9,414 8,246
Shares issued in reinvestment and capital
gains -- Class Z 4,286 9,967 805 624
Less shares redeemed -- Class Z (20,944) (60,621) (5,589) (11,723)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 14,263 15,387 4,630 (2,853)
- -------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of
Beneficial Interest 18,873 30,086 5,506 (2,571)
- -------------------------------------------------------------------------------------------------------
COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN USA INTERNATIONAL SELECT ACORN SELECT
(UNAUDITED) (UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004 2005 2004
Subscriptions -- Class A 835 1,239 124 116 9,331 14,418
Shares issued in reinvestment and capital
gains -- Class A 63 24 4 --* 126 473
Less shares redeemed -- Class A (517) (1,043) (23) (49) (3,358) (4,824)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 381 220 105 67 6,099 10,067
Subscriptions -- Class B 80 229 74 108 1,133 3,336
Shares issued in reinvestment and capital
gains -- Class B 39 16 2 -- 41 177
Less shares redeemed -- Class B (255) (485) (35) (38) (653) (1,035)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (136) (240) 41 70 521 2,478
Subscriptions -- Class C 129 261 58 52 1,692 2,649
Shares issued in reinvestment and capital
gains -- Class C 20 8 1 -- 24 98
Less shares redeemed -- Class C (134) (379) (17) (167) (718) (929)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 15 (110) 42 (115) 998 1,818
Subscriptions -- Class Z 4,462 8,912 768 707 8,931 10,606
Shares issued in reinvestment and capital
gains -- Class Z 349 128 33 10 116 326
Less shares redeemed -- Class Z (1,659) (7,291) (202) (479) (3,928) (5,997)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 3,152 1,749 599 238 5,119 4,935
- -----------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of
Beneficial Interest 3,412 1,619 787 260 12,737 19,298
- -----------------------------------------------------------------------------------------------------------------------------------
* Rounds to less than 500 shares.
See accompanying notes to financial statements.
1-800-922-6769
Spread 60-61
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS
(UNAUDITED)
SIX MONTHS
ENDED
COLUMBIA ACORN FUND CLASS Z JUNE 30, YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.45 $ 22.56 $ 15.50 $ 17.88 $ 17.21 $ 18.53
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.09 0.04 0.03 0.02 0.05 0.10
Net realized and unrealized gain (loss) 0.64 4.78 7.05 (2.40) 1.01 1.55
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.73 4.82 7.08 (2.38) 1.06 1.65
- ----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- (0.02) -- -- (0.04) (0.11)
From net realized gains (0.39) (0.91) (0.02) -- (0.35) (2.86)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to
Shareholders (0.39) (0.93) (0.02) -- (0.39) (2.97)
==================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 26.79 $ 26.45 $ 22.56 $ 15.50 $ 17.88 $ 17.21
==================================================================================================================================
Total Return (b) 2.78%(c)(d) 21.51%(d) 45.68% (13.31)% 6.14% 10.06%
==================================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (e) 0.76%(f) 0.81% 0.80% 0.82% 0.82% 0.83%
Net investment income (e) 0.66%(f) 0.18% 0.17% 0.15% 0.28% 0.55%
Reimbursement 0.02%(f) 0.02% -- -- -- --
Portfolio turnover rate 8%(c) 20% 10% 13% 20% 29%
Net assets at end of period (IN MILLIONS) $ 9,183 $ 8,689 $ 7,065 $ 4,022 $ 4,220 $ 3,983
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Not annualized.
(d) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) The benefits derived from custody fees paid indirectly had no impact.
(f) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED
COLUMBIA ACORN INTERNATIONAL CLASS Z JUNE 30, YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 29.03 $ 22.66 $ 15.40 $ 18.47 $ 23.85 $ 35.33
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.26 0.25 0.21 0.14 0.12 0.01
Net realized and unrealized gain (loss) 0.60 6.37 7.13 (3.10) (5.11) (6.73)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.86 6.62 7.34 (2.96) (4.99) (6.72)
- ----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.43) (0.25) (0.08) (0.11) -- (0.66)
From net realized gains -- -- -- -- (0.39) (4.10)
- ----------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to
Shareholders (0.43) (0.25) (0.08) (0.11) (0.39) (4.76)
==================================================================================================================================
REDEMPTION FEES
Redemption fees added to paid in capital 0.00(a)(b) 0.00(a)(b) -- -- -- --
==================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 29.46 $ 29.03 $ 22.66 $ 15.40 $ 18.47 $ 23.85
==================================================================================================================================
Total Return (c) 2.97%(d)(e) 29.47%(e) 47.80% (16.10)% (21.11)% (20.02)%
==================================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.01%(g) 1.08% 1.05% 1.06% 1.06% 1.05%
Net investment income (f) 1.79%(g) 1.01% 1.19% 0.80% 0.62% 0.02%
Reimbursement 0.02%(g) 0.02% -- -- -- --
Portfolio turnover rate 15%(d) 40% 40% 52% 45% 63%
Net assets at end of period (IN MILLIONS) $ 2,084 $ 1,919 $ 1,563 $ 1,241 $ 1,613 $ 2,459
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Not annualized.
(e) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED
COLUMBIA ACORN USA CLASS Z JUNE 30, YEAR ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.20 $ 21.01 $ 14.28 $ 17.52 $ 14.90 $ 16.75
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) 0.07 (0.15) (0.13) (0.10) (0.08) (0.05)
Net realized and unrealized gain (loss) 1.30 4.48 6.86 (3.14) 2.94 (1.48)
- --------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 1.37 4.33 6.73 (3.24) 2.86 (1.53)
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- -- (0.00)(b)
From net realized gains (0.36) (0.14) -- -- (0.24) (0.32)
- --------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to
Shareholders (0.36) (0.14) -- -- (0.24) (0.32)
================================================================================================================================
NET ASSET VALUE, END OF PERIOD $ 26.21 $ 25.20 $ 21.01 $ 14.28 $ 17.52 $ 14.90
================================================================================================================================
Total Return (c) 5.48%(d)(e) 20.62%(e) 47.13% (18.49)% 19.25% (8.99)%
================================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.03%(g) 1.09% 1.11% 1.17% 1.17% 1.15%
Net investment income (loss) (f) 0.55%(g) (0.66)% (0.72)% (0.64)% (0.46)% (0.32)%
Reimbursement 0.01%(g) 0.02% -- -- -- --
Portfolio turnover rate 7%(d) 18% 7% 31% 24% 45%
Net assets at end of period (IN MILLIONS) $ 755 $ 646 $ 502 $ 235 $ 229 $ 222
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Not annualized.
(e) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
See accompanying notes to financial statements
1-800-922-6769
Spread 62-63
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS, CONTINUED
(UNAUDITED)
SIX MONTHS
ENDED
COLUMBIA ACORN INTERNATIONAL SELECT CLASS Z JUNE 30, YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $18.02 $14.58 $10.29 $ 12.09 $ 17.15 $ 19.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a) 0.13 0.04 0.06 0.03 (0.05) (0.11)
Net realized and unrealized gain (loss) (0.03) 3.47 4.24 (1.83) (4.92) (2.53)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.10 3.51 4.30 (1.80) (4.97) (2.64)
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.28) (0.07) (0.01) -- (0.01) (0.04)
From net realized gains -- -- -- -- (0.08) (0.10)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to
Shareholders (0.28) (0.07) (0.01) -- (0.09) (0.14)
=================================================================================================================================
REDEMPTION FEES
Redemption fees added to paid in capital 0.00(a)(b) 0.00(a)(b) -- -- -- --
=================================================================================================================================
NET ASSET VALUE, END OF PERIOD $17.84 $18.02 $14.58 $ 10.29 $ 12.09 $ 17.15
=================================================================================================================================
Total Return (c) 0.58%(d)(e) 24.14%(e) 41.79%(e) (14.89)%(e) (29.05)%(e) (13.35)%
=================================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.45%(g) 1.45% 1.45% 1.45% 1.45% 1.33%
Net investment income (loss) (f) 1.42%(g) 0.27% 0.56% 0.26% (0.32)% (0.42)%
Reimbursement 0.03%(g) 0.29% 0.42% 0.33% 0.01% --
Portfolio turnover rate 13%(d) 73% 69% 102% 82% 79%
Net assets at end of period (IN MILLIONS) $ 57 $ 46 $ 34 $ 26 $ 37 $ 130
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Not annualized.
(e) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(UNAUDITED)
SIX MONTHS
ENDED
COLUMBIA ACORN SELECT CLASS Z JUNE 30, YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000
NET ASSET VALUE, BEGINNING OF PERIOD $21.13 $18.20 $14.04 $15.23 $14.13 $13.70
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a) (0.02) (0.10) (0.10) (0.10) (0.05) (0.07)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (0.01)(b) 3.47 4.39 (1.09) 1.18 1.59
Total from Investment Operations (0.03) 3.37 4.29 (1.19) 1.13 1.52
- -------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- -- (0.01)
From net realized gains (0.13) (0.44) (0.13) -- (0.03) (1.08)
- -------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to
Shareholders (0.13) (0.44) (0.13) -- (0.03) (1.09)
===============================================================================================================================
NET ASSET VALUE, END OF PERIOD $20.97 $21.13 $18.20 $14.04 $15.23 $14.13
===============================================================================================================================
Total Return (c) (0.14)%(d)(e) 18.58%(e) 30.61% (7.81)%(e) 8.00%(e) 11.68%
===============================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 1.00%(f)(g) 1.13%(f) 1.12%(f) 1.26%(f) 1.35% 1.34%(h)
Net investment loss (0.20)%(f)(g) (0.52)%(f) (0.63)%(f) (0.67)%(f) (0.44)% (0.52)%(h)
Reimbursement 0.04%(g) 0.02% -- 0.01% 0.03% --
Portfolio turnover rate 14%(d) 34% 16% 40% 82% 116%
Net assets at end of period (IN MILLIONS) $ 549 $ 445 $ 294 $ 93 $ 70 $ 67
(a) Per share data was calculated using average shares outstanding during the
period.
(b) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments in the Fund.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Not annualized.
(e) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) In accordance with a requirement of the U.S. Securities and Exchange
Commission, the ratios reflect total expenses prior to the reduction of
custody fees for cash balances the Fund maintains with the custodian
("custody fees paid indirectly"). The ratios of expenses to average daily
net assets and net investment loss to average daily net assets net of
custody fees paid indirectly would have been 1.32% and (0.50)%,
respectively for the year ended December 31, 2000.
See accompanying notes to financial statements
1-800-922-6769
64-65 Spread
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are each a
series of Columbia Acorn Trust (the "Trust"), an open-end management investment
company organized as a Massachusetts business trust. The investment objective of
each Fund is to seek long-term growth of capital. The Funds may issue an
unlimited number of shares. The Funds offer four classes of shares: Class A,
Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Effective January 3, 2005, Columbia Acorn International and Columbia Acorn
International Select impose a 2% redemption fee on Class A, Class B and Class C
shares that are owned 60 days or less. See "Fund Policy on Trading of Fund
Shares and Redemption Fees" as disclosed within the Funds' prospectus for more
information.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares. Generally, you may
exchange your Class Z shares of the Fund for shares of another fund at no
additional charge. However, if you exchange Class Z shares of Columbia Acorn
International or Columbia Acorn International Select that you have owned 60 days
or less for Class Z shares of a fund distributed by Columbia Funds Distributor,
Inc., that does not have a redemption fee (including Columbia Acorn Fund,
Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a
redemption fee of 2% of the redemption proceeds. Exchanges between Columbia
Acorn International and Columbia Acorn International Select (or a fund
distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will
not be subject to the 2% redemption fee. In addition, if you redeem shares of
Columbia Acorn International of Columbia Acorn International Select that you
have owned 60 days or less, the Fund will charge you a redemption fee of 2% of
redemption proceeds, with certain exceptions. See "Fund Policy on Trading of
Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for
more information.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate semiannual report. The semiannual financial statements
for the Columbia Thermostat Fund, another Fund of the Trust, begin on page 73 of
this report.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Securities of the Funds are valued at market value or, if a market quotation for
a security is not readily available or is deemed not to be reliable because of
events or circumstances that have occurred between the market quotation and the
time as of which the security is to be valued, the security is valued at a fair
value determined in accordance with procedures established by the Board of
Trustees. Securities traded on securities exchanges or in over-the-counter
markets in which transaction prices are reported are valued at the last sales
price at the time of valuation. If a security is traded principally on the
Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied.
Securities for which there are no reported sales on the valuation date are
valued at the latest bid quotation. Short-term debt obligations having a
maturity of 60 days or less from the valuation date are valued on an amortized
cost basis, which approximate fair value. Securities for which quotations are
not available are valued at a fair value as determined in good faith by the
Board of Trustees. The Trust has retained an independent statistical fair value
pricing service to assist in the fair valuation process for securities
principally traded in a foreign market in order to adjust for possible changes
in value that may occur between the close of the foreign exchange and the time
at which Fund shares are priced. If a security is valued at a "fair value", that
value may be different from the last quoted market price for the security.
1-800-922-6769
66
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodians, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment adviser determines that the value
of the underlying securities is at all times at least equal to the resale price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on short-term debt
obligations and long-term debt obligations when required for federal income tax
purposes. Realized gains and losses from security transactions are reported on
an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Funds no longer own the applicable securities, the proceeds are
recorded as realized gains.
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
>Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Funds or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Funds will not
incur any registration costs upon such resale.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" on the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the six months ended June 30, 2005.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange (the "Exchange") on each day the Exchange is open for
trading. All income, expenses (other than the Class A, Class B and Class C 12b-1
service and distribution fees
67
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
and Class A, Class B, Class C and Class Z transfer agent fees) and realized and
unrealized gains (losses) of a fund are allocated to each class proportionately
on a daily basis for purposes of determining the net asset value of each class.
Redemption fees are accounted for as an addition to paid in capital and are
allocated to each class proportionately for purposes of determining the net
asset value of each class.
>Custody fees/credits
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The Funds could have invested a portion of the assets utilized in
connection with the expense offset arrangement in an income-producing asset if
they had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses on the Statements of Operations.
>Federal income taxes
The Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Funds paid no federal income taxes and no federal
income tax provision was required.
>Foreign capital gains taxes
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 15%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The tax character of distributions paid during the year ended December 31, 2004
was as follows:
LONG-
TERM
ORDINARY CAPITAL
INCOME* GAINS
- --------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 30,840 $ 441,598
Columbia Acorn International 16,930 --
Columbia Acorn USA -- 4,748
Columbia Acorn International Select 157 --
Columbia Acorn Select -- 25,216
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
The following capital loss carryforwards, determined as of December 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 COLUMBIA ACORN COLUMBIA ACORN
EXPIRATION INTERNATIONAL USA
- --------------------------------------------------------------------------
(IN THOUSANDS)
2009 $ -- $ 2,529*
2010 14,102 506
2011 48,477 --
- --------------------------------------------------------------------------
TOTAL $62,579 $ 3,035
YEAR OF COLUMBIA ACORN
EXPIRATION INTERNATIONAL SELECT
- --------------------------------------------------------------------------
(IN THOUSANDS)
2009 $ 16,135
2010 12,528
2011 2,488
- --------------------------------------------------------------------------
TOTAL $ 31,151
* Of these carryforwards, $2,529 (expiring in 2009) remains from the Columbia
Acorn USA's merger with Stein Roe Small Company Growth Fund on 7/26/2002.
Utilization of Stein Roe Small Company Growth Fund's losses could be subject to
limitations imposed by the Internal Revenue Code.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs.
Effective March 8, 2005, under the Funds' investment management agreement,
fees are accrued daily and paid monthly to Columbia WAM at the annual rates
shown in the table below for each fund.
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------
Net asset value:
On the first $700 million 0.74%
Next $1.3 billion 0.69%
Next $4 billion 0.64%
Net assets in excess of $6 billion 0.63%
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------
Net asset value:
On the first $100 million 1.19%
Next $400 million 0.94%
Net assets in excess of $500 million 0.74%
COLUMBIA ACORN USA
- --------------------------------------------------------------------------
Net asset value:
On the first $200 million 0.94%
Net assets in excess of $200 million 0.89%
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68
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------------------------
On average daily net assets: 0.94%
COLUMBIA ACORN SELECT
- --------------------------------------------------------------------------
Net asset value:
On the first $700 million 0.85%
Net assets in excess of $700 million 0.80%
Prior to March 8, 2005, under the Funds' investment management agreement,
fees were accrued daily and paid monthly to Columbia WAM at the annual rates
shown in the table below for each fund.
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------
Net asset value:
On the first $700 million 0.75%
Next $1.3 billion 0.70%
Net assets in excess of $2 billion 0.65%
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million 0.95%
Net assets in excess of $500 million 0.75%
COLUMBIA ACORN USA
- --------------------------------------------------------------------------
Net asset value:
On the first $200 million 0.95%
Net assets in excess of $200 million 0.90%
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------------------------
On average daily net assets: 0.95%
COLUMBIA ACORN SELECT
- --------------------------------------------------------------------------
Net asset value:
On the first $700 million 0.90%
Net assets in excess of $700 million 0.85%
In accordance with the terms of the NYAG Settlement (as defined and
discussed further under Note 8 to these Financial Statements - "Legal
Proceedings"), Columbia WAM waived a portion of the fees payable under the
Funds' investment management agreement so that those fees are retained at the
following rates as a percent of average daily net assets: COLUMBIA ACORN FUND -
0.740% - up to $700 million; 0.690% - $700 million to $2 billion; 0.640% - $2
billion to $6 billion; 0.630% - $6 billion and over; COLUMBIA ACORN
INTERNATIONAL - 1.190% - up to $100 million; 0.940% - $100 million to $500
million; 0.740% - $500 million and over; COLUMBIA ACORN USA - 0.940% - up to
$200 million; 0.890% - $200 million and over; COLUMBIA ACORN INTERNATIONAL
SELECT - 0.940% on average daily net assets; COLUMBIA ACORN SELECT - 0.850% - up
to $700 million; 0.800% - $700 million and over. The fee waiver was effective as
of March 8, 2005 but applied as if it had gone into effect on December 1, 2004.
For the six months ended June 30, 2005, the Funds' effective investment
advisory fee rates were as follows:
- --------------------------------------------------------------------------
Columbia Acorn Fund 0.65%
Columbia Acorn International 0.80%
Columbia Acorn USA 0.90%
Columbia Acorn International Select 0.94%
Columbia Acorn Select 0.84%
==========================================================================
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of interest, taxes and extraordinary expenses, if any) exceeding
1.45% of the average annual net assets for Columbia Acorn International Select
Class Z shares and 1.35% of the average annual net assets for Columbia Acorn
Select Class Z shares.
Columbia WAM provides administrative services and receives an
administration fee from the Funds at the following rates:
COLUMBIA ACORN TRUST
- --------------------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset in excess of $16 billion 0.03%
For the six months ended June 30, 2005 each Fund's effective
administration fee rate was 0.043%.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Funds' principal underwriter and receives no
compensation on the sale of Class Z shares.
Each Fund has adopted a 12b-1 plan which requires it to pay CFDI a service
and distribution fee on the net assets attributable to Class A, Class B and
Class C shares.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Funds. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. The Transfer Agent has made the decision to
waive the reimbursement for certain out-of-pocket expenses.
69
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for
the six months ended June 30, 2005 were as follows:
- --------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 323
Columbia Acorn International 53
Columbia Acorn USA 21
Columbia Acorn International Select 20
Columbia Acorn Select 65
==========================================================================
The Board of Trustees appointed a Chief Compliance Officer to the Trust in
accordance with federal securities regulations. The Funds, along with other
affiliated funds, will pay their pro-rata share of the expenses associated with
the Office of the Chief Compliance Officer. These expenses are disclosed
separately as "Compliance fees" on the Statements of Operations.
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
An affiliate may include any company in which a fund owns five percent or
more of its outstanding voting securities. On June 30, 2005, Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select each held five percent or
more of the outstanding voting securities of one or more companies. Details of
investments in those affiliated companies are presented on pages 32, 47 and 54,
respectively.
During the six months ended June 30, 2005, the Funds engaged in purchase
and sale transactions with funds that have a common investment adviser (or
affiliated investment advisers), common Directors/Trustees, and/or common
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
PURCHASES SALES
- --------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 3,046 $ 1,713
Columbia Acorn International 4,757 623
Columbia Acorn USA -- 311
Columbia Acorn International Select 5,483 92
Columbia Acorn Select -- 912
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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 Statements of Operations. No amounts were borrowed under this facility for
the six months ended June 30, 2005.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the six months ended June 30, 2005 were:
COLUMBIA ACORN FUND
- --------------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 1,459,490
Proceeds from sales 1,076,808
==========================================================================
COLUMBIA ACORN INTERNATIONAL
- --------------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 506,385
Proceeds from sales 305,798
==========================================================================
COLUMBIA ACORN USA
- --------------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 121,693
Proceeds from sales 57,382
==========================================================================
COLUMBIA ACORN INTERNATIONAL SELECT
- --------------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 24,315
Proceeds from sales 7,891
==========================================================================
COLUMBIA ACORN SELECT
- --------------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 465,643
Proceeds from sales 170,312
==========================================================================
7. Redemption Fees
For the six months ended June 30, 2005, the redemption fees for Columbia Acorn
International and Columbia Acorn International Select amounted to $32,722 and
$6,294, respectively.
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70
8. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG and consented to the entry of a
cease-and-desist order by the SEC (the "SEC Order" and together, the
"Settlements"). The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia has agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and desist from violations of the antifraud provisions and certain other
provisions of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts will be distributed in accordance with a distribution plan to
be developed by an independent distribution consultant, who is acceptable to the
SEC staff and the independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are named as
defendants in class and derivative complaints which have been consolidated in a
Multi-District Action in the federal district court for the District of
Massachusetts. These lawsuits contend that defendants permitted certain
investors to market time their trades in certain Columbia Acorn Funds. The
Multi-District Action is ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are
also defendants in a consolidated lawsuit filed in the federal district court of
Massachusetts alleging that Columbia WAM used Fund assets to make undisclosed
payments to brokers as an incentive for the brokers to market the Funds over
other mutual funds to investors. The complaint alleges Columbia WAM and the
Trustees of the Trust breached certain common law duties and federal laws.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV. The plaintiffs' complaint
71
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
was dismissed by the district court. However, plaintiffs are in the process of
appealing that decision.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. The lawsuit alleges that defendants violated common law duties
to fund shareholders as well as sections of the Investment Company Act of 1940,
by failing to ensure that the Trust funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs allege that defendants failed to submit Proof
of Claims in connection with settlements of securities class action lawsuits
filed against companies in which the funds held positions. The complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to
Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM
have been dismissed as defendants in this lawsuit.
On March 21, 2005, a class action complaint was filed against the Columbia
Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales
Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due
to the alleged market timing of the Columbia Acorn Funds. In addition to the
rescission of sales charges, plaintiffs seek recovery of actual damages,
attorneys' fees and cost. The case has been removed to the federal district
court of Massachusetts.
The Trust and Columbia WAM intend to defend these suits vigorously.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund. In connection with
the events described in detail above, various parties have filed suit against
certain funds, their Boards and/or BOA (and affiliated entities). These suits
are ongoing. However, based on currently available information, the Columbia
Acorn Trust believes that the likelihood that these lawsuits will have a
material adverse impact on any fund is remote, and Columbia WAM believes that
the lawsuits are not likely to materially affect its ability to provide
investment management services to the Funds.
For the six months ended June 30, 2005, Columbia Management has assumed
consulting services and legal fees incurred by the Funds in connection with
these matters and the amounts are as follows:
- --------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 85
Columbia Acorn International 13
Columbia Acorn USA 6
Columbia Acorn International Select --*
Columbia Acorn Select 8
==========================================================================
* Rounds to less than $500.
9. Subsequent Event
Effective August 22, 2005, the Funds' distributor will be Columbia Management
Distributors, Inc. and the Funds' transfer agent will be Columbia Management
Services, Inc.
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COLUMBIA THERMOSTAT FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ---------------------------------------------------------------
>BOND MUTUAL FUNDS: 59.9%
6,794,681 Columbia Intermediate Bond Fund,
Class Z $ 61,764
3,435,575 Columbia Federal Securities Fund,
Class Z 37,035
2,864,156 Columbia High Yield Fund, Class Z 24,746
- ---------------------------------------------------------------
TOTAL BOND MUTUAL FUNDS
(COST: $122,607) 123,545
>STOCK MUTUAL FUNDS: 39.9%
1,118,975 Columbia Growth & Income Fund,
Class Z 20,444
2,319,364 Columbia Growth Stock Fund,
Class Z (b) 20,039
627,082 Columbia Acorn Fund, Class Z 16,800
602,341 Columbia Acorn Select, Class Z 12,631
452,128 Columbia Mid Cap Value Fund,
Class Z 12,551
- ---------------------------------------------------------------
TOTAL STOCK MUTUAL FUNDS
(COST: $67,473) 82,465
>SHORT-TERM OBLIGATIONS: 0.4%
$ 751 Repurchase Agreement with State
Street Bank & Trust dated
6/30/05, due 7/1/05 at 3.00%
collateralized by Federal
National Mortgage Association
Notes, maturing 3/24/08 market
value $769 (repurchase
proceeds: $751) 751
- ---------------------------------------------------------------
(COST: $751) 751
----------
TOTAL INVESTMENTS: 100.2% 206,761
(COST: $190,831)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: (0.2)% (421)
----------
TOTAL NET ASSETS: 100% $ 206,340
===============================================================
>Notes to Statement of Investments (in thousands)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$190,831 and net unrealized appreciation was $15,930 consisting of gross
unrealized appreciation of $16,094 and gross unrealized depreciation of
$164.
(b) Non-income producing security.
73
COLUMBIA THERMOSTAT FUND
>STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2005
- --------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at value (cost: $751) $ 751
Affiliated investments, at value (cost: $190,080) 206,010
Cash 490
Receivable for fund shares sold 153
Expense reimbursement due from Investment Adviser 28
- --------------------------------------------------------------------------------------
Total Assets 207,432
LIABILITIES:
Payable for:
Investments purchased 490
Fund shares redeemed 361
Management fee 16
Administration fee 7
Deferred trustees fee 5
Transfer agent fees 16
Trustees' fees 2
Custody fees 3
Reports to shareholders 73
12b-1 Service & Distribution fees 102
Other liabilities 17
- --------------------------------------------------------------------------------------
Total Liabilities 1,092
- --------------------------------------------------------------------------------------
NET ASSETS $ 206,340
======================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 187,052
Undistributed net investment income 2,080
Accumulated net realized gain 1,278
Net unrealized appreciation on investments 15,930
- --------------------------------------------------------------------------------------
NET ASSETS $ 206,340
======================================================================================
Net asset value per share -- Class A (a) $ 13.04
(Net assets/shares) ($71,945/5,518)
Maximum offering price per share -- Class A (b) $ 13.84
(Net asset value per share/front-end sales charge) ($13.04/0.9425)
Net asset value and offering price per share -- Class B (a) $ 13.02
(Net assets/shares) ($79,557/6,110)
Net asset value and offering price per share -- Class C (a) $ 13.01
(Net assets/shares) ($30,449/2,341)
Net asset value, offering and redemption price per share -- Class Z $ 13.06
(Net assets/shares) ($24,389/1,867)
(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.
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COLUMBIA THERMOSTAT FUND
>STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
(IN THOUSANDS)
- --------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends from affiliated investment company shares $ 2,882
Interest income 11
- --------------------------------------------------------------------------------------
Total Investment Income 2,893
EXPENSES:
Management fee 102
Administration fee 44
12b-1 Service and Distribution fees:
Class A 92
Class B 330
Class C 151
Transfer agent fees:
Class A 45
Class B 65
Class C 23
Class Z 10
Trustees' fees 10
Custody fees 6
Reports to shareholders 67
Compliance fees 4
Non-recurring costs (See Note 7) 1
Other expenses 47
- --------------------------------------------------------------------------------------
Total expenses 997
Less custody fees paid indirectly --*
Less reimbursement of expenses by Investment Adviser (149)
Less reimbursement of expenses by Transfer Agent (19)
Non-recurring costs reimbursed (See Note 7) (1)
- --------------------------------------------------------------------------------------
Net Expenses 828
- --------------------------------------------------------------------------------------
Net Investment Income 2,065
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Affiliated investments 1,532
Distributions from affiliated investment company shares 280
- --------------------------------------------------------------------------------------
Net realized gain 1,812
Net change in unrealized appreciation (depreciation) on investments (1,503)
- --------------------------------------------------------------------------------------
Net realized and unrealized gain 309
- --------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 2,374
======================================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
75
COLUMBIA THERMOSTAT FUND
>STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS YEAR ENDED
INCREASE IN NET ASSETS: ENDED JUNE 30, DECEMBER 31,
- ------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
OPERATIONS:
Net investment income $ 2,065 $ 3,334
Net realized gain on investments and distributions from
affiliated investment company shares 1,812 3,692
Net change in net unrealized appreciation (depreciation)
on investments (1,503) 8,154
- ------------------------------------------------------------------------------------------------
Net Increase from Operations 2,374 15,180
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- (1,488)
Net realized gain -- Class A (1,365) (141)
Net investment income -- Class B -- (997)
Net realized gain -- Class B (1,495) (146)
Net investment income -- Class C -- (383)
Net realized gain -- Class C (573) (61)
Net investment income -- Class Z -- (450)
Net realized gain -- Class Z (449) (36)
- ------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (3,882) (3,702)
SHARE TRANSACTIONS:
Subscriptions -- Class A 7,179 42,302
Distributions reinvested -- Class A 1,229 1,425
Redemptions -- Class A (13,096) (13,080)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A (4,688) 30,647
Subscriptions -- Class B 6,412 27,802
Distributions reinvested -- Class B 1,356 1,024
Redemptions -- Class B (5,578) (6,671)
- ------------------------------------------------------------------------------------------------
Net Increase -- Class B 2,190 22,155
Subscriptions -- Class C 3,670 12,939
Distributions reinvested -- Class C 523 378
Redemptions -- Class C (4,611) (4,000)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C (418) 9,317
Subscriptions -- Class Z 4,257 8,408
Distributions reinvested -- Class Z 427 470
Redemptions -- Class Z (1,184) (3,140)
- ------------------------------------------------------------------------------------------------
Net Increase -- Class Z 3,500 5,738
- ------------------------------------------------------------------------------------------------
Net Increase from Share Transactions 584 67,857
- ------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (924) 79,335
- ------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 207,264 127,929
- ------------------------------------------------------------------------------------------------
End of period $ 206,340 $ 207,264
- ------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME $ 2,080 $ 15
================================================================================================
See accompanying notes to financial statements.
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76
COLUMBIA THERMOSTAT FUND
>STATEMENT OF CHANGES IN NET ASSETS, CONTINUED
(UNAUDITED)
SIX MONTHS YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31,
- ------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
Subscriptions -- Class A 551 3,381
Shares issued in reinvestment and capital gains -- Class A 94 110
Less shares redeemed -- Class A (1,006) (1,049)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A (361) 2,442
Subscriptions -- Class B 493 2,213
Shares issued in reinvestment and capital gains -- Class B 104 79
Less shares redeemed -- Class B (428) (530)
- ------------------------------------------------------------------------------------------------
Net Increase -- Class B 169 1,762
Subscriptions -- Class C 282 1,028
Shares issued in reinvestment and capital gains -- Class C 41 29
Less shares redeemed -- Class C (354) (316)
- ------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C (31) 741
Subscriptions -- Class Z 327 669
Shares issued in reinvestment and capital gains -- Class Z 33 36
Less shares redeemed -- Class Z (91) (250)
- ------------------------------------------------------------------------------------------------
Net Increase -- Class Z 269 455
- ------------------------------------------------------------------------------------------------
Net Increase in Shares of Beneficial Interest 46 5,400
- ------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
77
COLUMBIA THERMOSTAT FUND
>FINANCIAL HIGHLIGHTS
INCEPTION
(UNAUDITED) SEPTEMBER 25,
SIX MONTHS 2002 THROUGH
CLASS Z ENDED JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF PERIOD 13.12 $ 12.31 $ 10.41 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.17 0.31 0.19 0.04
Net realized and unrealized gain 0.02 0.82 1.87 0.37
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.19 1.13 2.06 0.41
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- (0.29) (0.16) --
From net realized gains (0.25) (0.03) (0.00)(b) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.25) (0.32) (0.16) --
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.06 $ 13.12 $ 12.31 $ 10.41
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return (c)(d) 1.44%(e) 9.17% 19.79% 4.10%(e)
=================================================================================================================================
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 0.25%(g)(h) 0.25%(g) 0.38%(g) 0.62%(h)(i)
Net investment income 2.59%(g)(h) 2.48%(g) 1.64%(g) 1.41%(h)(i)
Reimbursement 0.11%(h) 0.21% 0.88% 19.94%(h)
Portfolio turnover rate 35%(e) 67% 61% 11%(e)
Net assets at end of period (IN MILLIONS) $ 24 $ 21 $ 14 $ 4
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested.
(d) Had the Investment Adviser and/or Transfer Agent not reimbursed a portion
of expenses, total return would have been reduced.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) In accordance with a requirement of the U.S. Securities and Exchange
Commission, the ratios reflect total expenses prior to the reduction of
custody fees for cash balances the Fund maintains with the custodian
("custody fees paid indirectly"). The ratios of expenses to average daily
net assets and net investment income to average daily net assets net of
custody fees paid indirectly would have been 0.60% and 1.43%, respectively
for the period ended December 31, 2002.
See accompanying notes to financial statements.
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COLUMBIA THERMOSTAT FUND
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), is a series of Columbia Acorn Trust (the
"Trust"), an open-end management investment company organized as a Massachusetts
business trust. The Fund may issue an unlimited number of shares. The Fund
currently offers four classes of shares: Class A, Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") may be assessed to Class A shares purchased
without an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares.
The financial highlights for Class A, Class B and Class C shares are
presented in a separate semiannual report. The semiannual report for the other
series of the Trust is also included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a 'fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment adviser. As of June 30, 2005, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund and Columbia Growth Stock
Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as reported
by the underlying funds. Repurchase agreements, high quality short-term paper
and government securities having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis, which approximates fair
value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund, through its
custodian, receives delivery of underlying securities collateralizing each
repurchase agreement. The Fund's investment adviser determines that the value of
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income and realized gain distributions
from other funds are recorded on the ex-dividend date. Interest income is
recorded on the accrual basis and includes amortization of discounts on
short-term debt obligations when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis. Awards from class action litigation may be recorded as a
reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
79
COLUMBIA THERMOSTAT FUND
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange (the "Exchange") on each day the Exchange is open for
trading. All income, expenses (other than Class A, Class B and Class C 12b-1
service and distribution fees, and Class A, Class B, Class C and Class Z
transfer agent fees) and realized and unrealized gains (losses) of the Fund are
allocated to each class proportionately on a daily basis for purposes of
determining the net asset value of each class.
>Custody fees/credits
Custody fees are reduced based on the Fund's cash balance maintained with the
custodian. The Fund could have invested a portion of assets utilized in
connection with the expense offset arrangement in an income-producing asset if
it had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses on the Statement of Operations.
>Federal income taxes
The Fund has complied with the provisions of the Internal Revenue Code available
to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The tax character of distributions paid during the year ended December 31, 2004
was as follows:
DECEMBER 31,
2004
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Distributions paid from:
Ordinary Income* $ 3,645
Long-Term Capital Gains 57
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Fund and is responsible for the overall
management of the Fund's business affairs.
Under the Fund's investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to contractually reimburse the direct operating expenses
(exclusive of interest and fees on borrowings and expenses associated with the
Fund's investment in other investment companies) exceeding 0.25% of the average
annual net assets of the Fund's Class Z shares.
Columbia WAM has the right to recoup expense reimbursement payments made
to the Fund through December 31, 2005. This will be accomplished by the payment
of an expense reimbursement fee by the Fund to Columbia WAM computed and paid
monthly, with a limitation that immediately after such payment the Fund's
ordinary operating expenses (excluding interest and fees on borrowings and
expenses associated with the Fund's investment in other investment companies)
will not exceed 0.25% annually.
Columbia WAM provides administrative services and receives an
administration fee from the Fund at the following annual rates:
COLUMBIA ACORN TRUST
- --------------------------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset value in excess
of $16 billion 0.03%
For the six months ended June 30, 2005, the Fund's effective
administration fee rate was 0.043%.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Fund's principal indirect underwriter and receives no
compensation on the sale of Class Z shares.
The Fund has adopted a 12b-1 plan which requires it to pay CFDI a service
and distribution fee on net assets attributable to Class A, Class B and Class C
shares.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Fund. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses.
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80
The Transfer Agent has made the decision to waive the reimbursement for certain
out-of-pocket expenses.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for
the six months ended June 30, 2005 were $9,720.
The Board of Trustees appointed a Chief Compliance Officer to the Trust 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. This expense is disclosed separately
as "Compliance fees" on the Statement of Operations.
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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. No amounts were borrowed under this facility for
the six months ended June 30, 2005.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the six months ended June 30, 2005 were:
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Purchases $ 71,861
Proceeds from sales 71,924
================================================================================
7. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG and consented to the entry of a
cease-and-desist order by the SEC (the "SEC Order" and together, the
"Settlements"). The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia has agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and desist from violations of the antifraud provisions and certain other
provisions of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts will be distributed in accordance with a distribution plan to
be developed by an independent distribution consultant, who is acceptable to the
SEC staff and the independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and
81
COLUMBIA THERMOSTAT FUND
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
not unacceptable to the staff of the SEC. More specific information on the
distribution plan will be communicated by Columbia WAM and/or its affiliates at
a later date.
The Trust, Columbia WAM and the Trustees of the Trust are named as
defendants in class and derivative complaints which have been consolidated in a
Multi-District Action in the federal district court for the District of
Massachusetts. These lawsuits contend that defendants permitted certain
investors to market time their trades in certain Columbia Acorn Funds. The
Multi-District Action is ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are
also defendants in a consolidated lawsuit filed in the federal district court of
Massachusetts alleging that Columbia WAM used Fund assets to make undisclosed
payments to brokers as an incentive for the brokers to market the Funds over
other mutual funds to investors. The complaint alleges Columbia WAM and the
Trustees of the Trust breached certain common law duties and federal laws.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV. The plaintiffs' complaint was
dismissed by the district court. However, plaintiffs are in the process of
appealing that decision.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. The lawsuit alleges that defendants violated common law duties
to fund shareholders as well as sections of the Investment Company Act of 1940,
by failing to ensure that the Trust funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs allege that defendants failed to submit Proof
of Claims in connection with settlements of securities class action lawsuits
filed against companies in which the funds held positions. The complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to
Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM
have been dismissed as defendants in this lawsuit.
On March 21, 2005, a class action complaint was filed against the Columbia
Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales
Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due
to the alleged market timing of the Columbia Acorn Funds. In addition to the
rescission of sales charges, plaintiffs seek recovery of actual damages,
attorneys' fees and cost. The case has been removed to the federal district
court of Massachusetts.
The Trust and Columbia WAM intend to defend these suits vigorously.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund. In connection with
the events described in detail above, various parties have filed suit against
certain funds, their Boards and/or BOA (and affiliated entities). These suits
are ongoing. However, based on currently available information, the Columbia
Acorn Trust believes that the likelihood that these lawsuits will have a
material adverse impact on any fund is remote, and Columbia WAM believes that
the lawsuits are not likely to materially affect its ability to provide
investment management services to the Funds.
For the six months ended June 30, 2005, Columbia Management has assumed
$1,256 of consulting services and legal fees incurred by the Fund in connection
with these matters.
8. Subsequent Event
Effective August 22, 2005, the Fund's distributor will be Columbia Management
Distributors, Inc. and the Fund's transfer agent will be Columbia Management
Services, Inc.
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82
COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARE INFORMATION
MINIMUM INITIAL INVESTMENT IN
COLUMBIA ACORN INTERNATIONAL,
COLUMBIA ACORN INTERNATIONAL
SELECT AND COLUMBIA
THERMOSTAT FUND $ 1,000
$ 1,000 FOR AN IRA
MINIMUM INITIAL INVESTMENT
IN COLUMBIA ACORN FUND,
COLUMBIA ACORN USA AND
COLUMBIA ACORN SELECT* $ 50,000
MINIMUM SUBSEQUENT
INVESTMENT $ 50
EXCHANGE FEE NONE
COLUMBIA ACORN FUND ACRNX
Management Fee 0.65%
12b-1 Fee None
Other Expenses 0.11%
--------
Expense Ratio 0.76%
COLUMBIA ACORN INTERNATIONAL ACINX
Management Fee 0.80%
12b-1 Fee None
Other Expenses 0.21%
--------
Expense Ratio 1.01%
COLUMBIA ACORN USA AUSAX
Management Fee 0.90%
12b-1 Fee None
Other Expenses 0.13%
--------
Expense Ratio 1.03%
COLUMBIA ACORN INTERNATIONAL SELECT ACFFX
Management Fee 0.94%
12b-1 Fee None
Other Expenses 0.51%
--------
Net Expense Ratio 1.45%
COLUMBIA ACORN SELECT ACTWX
Management Fee 0.84%
12b-1 Fee None
Other Expenses 0.16%
--------
Expense Ratio 1.00%
COLUMBIA THERMOSTAT FUND COTZX
Management Fee 0.10%
12b-1 Fee None
Other Expenses 0.15%
--------
Net Expense Ratio 0.25%**
Fees and expenses are for the six months ended June 30, 2005 and for
Columbia Acorn International Select and Columbia Thermostat Fund include
the effect of Columbia Wanger Asset Management's undertaking to reimburse
those funds for any ordinary operating expenses, net of custody fees paid
indirectly, exceeding 1.45% and 0.25% of their average net assets,
respectively. The expense limitation for Columbia Acorn International
Select is voluntary and can be terminated by either the Fund or Columbia
Wanger Asset Management, L.P. on 30 days' notice. Columbia Thermostat
Fund's reimbursement arrangement is contractual through April 30, 2006.
The Fund's adviser and/or affiliates have contractually agreed to waive a
portion of "other expenses" through April 30, 2006.
* Effective August 5, 2005, the minimum initial investment in Columbia Acorn
Select was raised to $50,000 from $1,000.
** Does not include estimated fees and expenses of 0.85% incurred by the Fund
from the underlying portfolio funds.
83
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84
[Excerpts from:]
COLUMBIA ACORN TRUST
Management Fee Evaluation of the Senior Officer
Prepared Pursuant to the New York Attorney General's
Assurance of Discontinuance
July 2005
85
INTRODUCTION
The New York Attorney General's Assurance of Discontinuance ("Order") entered
into by Columbia Management Advisors, Inc. ("CMAI") and Columbia Funds
Distributor, Inc., ("CFDI" and collectively with "CMAI", "CMG") in February
2005, allows CMAI to manage or advise a mutual fund, including the Acorn Trust's
family of funds (the "Acorn Funds" or "Acorn" or "Trust"), only if the trustees
of the Acorn Funds appoint a "Senior Officer" to perform specified duties and
responsibilities. One of these responsibilities includes "managing the process
by which proposed management fees (including but not limited to, advisory fees)
to be charged the Acorn Funds are negotiated so that they are negotiated in a
manner which is at arms' length and reasonable and consistent with this
Assurance of Discontinuance."
The Order also provides that the Board of Trustees of the Acorn Funds ("Board")
must determine the reasonableness of proposed "management fees" by using either
an annual competitive bidding process supervised by the Senior Officer or
Independent Fee Consultant, or by obtaining "an annual independent written
evaluation prepared by or under the direction of the Senior Officer or the
Independent Fee Consultant."
"Management fees" are only part of the costs and expenses paid by mutual fund
shareholders. The expenses can vary depending upon the class of shares held but
usually include: (1) investment management or advisory fees to compensate
analysts and portfolio managers for stock research and portfolio management, as
well as the cost of operating a trading desk; (2) administrative expenses
incurred to prepare registration statements and tax returns, calculate the
Funds' net asset values, maintain effective compliance procedures and perform
recordkeeping services; (3) transfer agency costs for establishing accounts,
accepting and disbursing funds, as well as overseeing trading in Fund shares;
(4) custodial expenses incurred to hold the securities purchased by the Funds;
and (5) distribution expenses, including commissions paid to brokers that sell
the Fund shares to investors.
Columbia Wanger Asset Management, L.P. ("CWAM"), the adviser to the Acorn Funds,
has proposed that the Trust enter into separate agreements governing the first
two categories listed above: an advisory agreement governing portfolio
management, and an administration agreement governing certain administration and
clerical services. Together the fees paid under these two agreements are
referred to as "management fees." Other fund expenses are governed by separate
agreements, in particular agreements with two CWAM affiliates: CFDI, the
broker-dealer that underwrites and distributes the Acorn Funds' shares, and
Columbia Funds Services, Inc. ("CFSI"), the Funds' transfer agent. In conformity
with the terms of the Order, this evaluation, therefore, addresses only the
advisory and administrative contracts between CWAM and the Trust, and does not
extend to the other agreements.
According to the Order, the Senior Officer's evaluation must consider at least
the following:
(1) Management fees (including components thereof) charged to
institutional and other clients of CWAM for like services;
(2) Management fees (including any components thereof) charged by other
mutual fund companies for like services;
(3) Costs to CWAM and its affiliates of supplying services pursuant to
the management fee agreements, excluding any intra-corporate profit;
(4) Profit margins of CWAM and its affiliates from supplying such
services;
(5) Possible economies of scale as the Acorn Funds grow larger; and
(6) The nature and quality of CWAM's services, including the performance
of each Acorn Fund.
1-800-922-6769
86
On November 16, 2004, the Board appointed me Senior Officer under the Order. The
Board also determined not to pursue a competitive bidding process and instead,
charged me with the responsibility of evaluating the Acorn Funds' proposed
advisory and administrative fee contracts with CWAM in conformity with the
requirements of the Order. This Report is an annual evaluation required under
the Order. In discharging their responsibilities, the independent Trustees have
also consulted independent, outside counsel.
* * *
This evaluation was performed in cooperation and regular communication with the
Investment Advisory Committee of the Board of Trustees.
PROCESS AND INDEPENDENCE
The objectives of the Order are to insure the independent evaluation of the
advisory fees paid by the Acorn Funds as well as to insure that all relevant
factors are considered. In my view, the contract renewal process has been
conducted at arms-length and with independence in gathering, considering and
evaluating relevant data. For example, the selection of fund peer groups is
critical in assessing a fund's relative performance and cost. I have required
Lipper and Morningstar Inc. to prepare their reports without input or commentary
from CWAM; the engagement letters with them reflect this requirement. As a
result, the peer groups reflected in the Morningstar Inc. and Lipper reports
were determined independently. After submission of the reports, I asked CWAM to
comment on them to avoid errors and to establish a clear record of CWAM's views
on which funds, in its judgment, constitute an appropriate peer group.
Similarly, I discussed CWAM's profitability analysis with its management but
also sought the independent views of Ernst & Young on the reasonableness of
CWAM's cost allocation methodology and on the adequacy of the financial data it
provided. The evaluation of CWAM's profitability was performed in the context of
the limited industry data available.
My evaluation of the advisory contract was shaped by my experience as Acorn's
Chief Compliance Officer ("CCO"). As CCO, I report solely to the Board and have
no reporting obligation to or employment relationship with CMG or its
affiliates, except for administrative purposes. This too contributes to the
independence of this evaluation. I have made several comments on compliance
matters in evaluating the quality of service provided by CWAM and CMG.
Finally, this Report, its supporting materials and the data contained in other
materials submitted to the Investment Advisory Committee of the Board, in my
view, provide a thorough factual basis upon which the Board, in consultation
with independent counsel as it deems appropriate, may conduct management fee
negotiations that are in the best interests of the Acorn Funds' shareholders.
87
* * *
VI. CONCLUSIONS
My review of the data and other material above leads to the following
conclusions with respect to the factors identified in the Order.
1. Performance. The Acorn Funds generally have achieved outstanding
performance. The Acorn Fund, Acorn USA and Acorn Select all rank
very favorably against their peers. The international funds have
good recent performance records, but weaker long-term performance
relative to the other, domestic Acorn Funds. Recent management
changes have been followed by improved performance. The Acorn Funds
typically achieve their performance with less risk than their
competitors.
2. Management Fees relative to Peers. The management fee rankings of
the Funds - particularly on the basis of a combined advisory and
administrative fee basis - are generally above the respective
medians and, hence, more favorable to shareholders than their peer
group funds. Management fees do vary by Fund, with the Acorn Fund
the least expensive and the Acorn USA Fund the most expensive. Acorn
USA is the only fund that both Lipper and Morningstar ranked below
the median.
3. Administrative Fees. The Acorn Funds' administrative fee, which is
uniform across all Funds, is at a level comparable to that of its
peers, provides for appropriate services to Funds, and affords
breakpoints that lower the fee as assets increase.
4. Management Fees relative to Institutional and Other Mutual Fund
Accounts. CWAM's focus is on its mutual funds. It does not actively
seek to manage separate or institutional accounts. The few
institutional accounts it does manage vary in rate structures. Some
pay advisory fees commensurate with or higher than the Acorn Funds.
In a few instances, however, institutional accounts pay lower
advisory fees than do the Acorn Funds. One particular institutional
account is significant in size and has been under CWAM's management
for over 25 years. Finally, in two instances, the Acorn Funds pay
slightly higher fees than do similar funds sold through insurance
companies.
5. Costs to CWAM and its Affiliates. CWAM's costs do not appear
excessive, and, in my view, it uses appropriate methodologies to
allocate overhead costs. CWAM's affiliates do not appear to profit
indirectly from CWAM's advisory agreement with the Acorn Funds.
6. Profit Margins. CWAM's firm-wide profit margins are at the upper end
of the industry, though these comparisons are hampered by limited
industry data. High profit margins are not unexpected for firms that
manage large, successful funds and have provided outstanding
investment performance for investors. CMAI, the Funds'
administrator, currently experiences losses rather than profits in
connection with its activities relating to the Acorn Funds.
7. Economies of Scale. Economies of scale do exist at CWAM and will
expand as the assets of the Acorn Funds get larger. They are,
however, only partially reflected in the management fee schedule for
the Funds. If the Acorn Funds' assets continue to grow, under the
Funds' current fee schedules, shareholders might not benefit in a
manner generally commensurate with CWAM's increased profits.
1-800-922-6769
88
8. Nature and quality of services. This category includes a variety of
considerations that are difficult to quantify, yet can have a
significant bearing on the performance of the Acorn Funds. Several
areas merit comment.
a. Continuity of Management. It is critical that capable and
experienced portfolio managers remain committed to the Funds
and are able to hire and retain analysts to assist them. CWAM
must have in place appropriate incentive plans that align its
management's interests with those of investors. Further, CWAM
must maintain the independence of its investment process,
supported by effective information technology.
b. Compliance. CWAM has a reasonably designed compliance program
and a variety of related services that are valuable to
shareholders, such as systems to ensure best execution of
portfolio transactions and the daily review of security prices
to ensure accuracy of the Acorn Funds' NAV.
c. Administrative Services. The Acorn Funds benefit from a
variety of administrative services that are performed by CWAM
and CMAI, including preparation of registration statements,
calculation of NAV's, accounting services, shareholder
services, and other functions.
In my opinion, these conclusions, taken together, support the reasonableness of
the proposed advisory and administrative fees. In reaching my evaluation, I
weighed heavily the factors of performance and management fees relative to those
paid by competing funds. In this respect, the Acorn Funds provide excellent
performance at costs that generally fall below industry medians.
VII. RECOMMENDATIONS
The Trustees should consider the following proposals to address the issues
identified in this Report. Some of these recommendations require the collection
and evaluation of more data. This work cannot be accomplished effectively before
the expiration of the existing advisory contract on July 31, 2005. Therefore, I
recommend that the Trustees consider extending the existing contract pending
consideration of these recommendations.
These recommendations do not purport to offer the only avenues to address the
opinions and conclusions I have expressed in this Report. Economies of scale,
for example, can be addressed in a variety of ways in a management contract.
Sound business judgment will guide how any particular area is addressed with due
consideration given to all the factors that must be weighed in reaching an
advisory agreement that best serves the Acorn Fund shareholders.
I believe the Trustees should consider the following:
1. Restructure the advisory fee beyond the current breakpoint schedule
to reflect more fully economies of scale. The Trustees might
consider several ways to accomplish this objective, including
instituting a two-tier fee structure that incorporates a complex- or
CWAM-wide fee (including assets held in separate accounts) and a
fund specific fee, with each containing breakpoints to reflect their
separate economies of scale. Another approach is to consider uniform
breakpoints for all Acorn Funds, including breakpoints above current
asset levels.
2. Condition contract renewal on submission of an employment agreement
or management incentive plan designed to ensure the continued
employment of senior management, under terms that align management's
incentives with the interests of the Acorn Funds' shareholders. Any
incentive plan should be designed to
89
permit CWAM to attract and retain the highest caliber investment
professionals and to support them with effective and reliable
information technology systems.
3. Review with CWAM its anticipated capacity limitations and the degree
to which increased staffing and effective incentives may address
those issues.
Robert P. Scales
July 20, 2005
* * *
More complete copies of the Management Fee Evaluation of the Senior
Officer of the Columbia Acorn Trust, edited to delete certain confidential or
proprietary information, are available upon written request to:
R. Scott Henderson
Bank of America
MA-515-11-05
One Financial Center
Boston, MA 02111
EFFECTIVE AUGUST 22, 2005, THE FUNDS' DISTRIBUTOR WILL BE COLUMBIA
MANAGEMENT DISTRIBUTORS, INC. AND THE FUNDS' TRANSFER AGENT WILL BE COLUMBIA
MANAGEMENT SERVICES, INC.
1-800-922-6769
90
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91
COLUMBIA ACORN
- ------------------------
FAMILY OF FUNDS
TRUSTEES
Robert E. Nason
CHAIRMAN
Margaret Eisen
Leo A. Guthart
Jerome Kahn, Jr.
Steven N. Kaplan
David C. Kleinman
Charles P. McQuaid
Allan B. Muchin
Ralph Wanger
John A. Wing
OFFICERS
Charles P. McQuaid
PRESIDENT
Ben Andrews
VICE PRESIDENT
Michael G. Clarke
ASSISTANT TREASURER
J. Kevin Connaughton
ASSISTANT TREASURER
P. Zachary Egan
VICE PRESIDENT
Kenneth A. Kalina
ASSISTANT TREASURER
Bruce H. Lauer
VICE PRESIDENT, SECRETARY AND TREASURER
Louis J. Mendes
VICE PRESIDENT
Robert A. Mohn
VICE PRESIDENT
Todd M. Narter
VICE PRESIDENT
Christopher J. Olson
VICE PRESIDENT
Vincent P. Pietropaolo
ASSISTANT SECRETARY
Robert P. Scales
CHIEF COMPLIANCE OFFICER, VICE PRESIDENT
GENERAL COUNSEL AND CHIEF LEGAL OFFICER
INVESTMENT ADVISER
Columbia Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-922-6769
DISTRIBUTOR
Columbia Management Distributors, Inc.
One Financial Center
Boston, Massachusetts 02111-2621
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
Columbia Management Services, Inc.
P.O. Box 8081
Boston, Massachusetts 02266-8081
1-800-345-6611
LEGAL COUNSEL
Bell, Boyd & Lloyd LLC
Chicago, Illinois
THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO
OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800)
922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW
TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES IS AVAILABLE (I) WITHOUT
CHARGE, UPON REQUEST, BY CALLING 800-922-6769 AND (II) ON THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION REGARDING HOW
THE FUNDS VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE 12-MONTH
PERIOD ENDED JUNE 30, 2004 IS AVAILABLE FROM THE SEC'S WEBSITE.
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' FORM N-Q IS
AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY BE REVIEWED AND COPIED AT
THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, D.C. INFORMATION ON THE OPERATION
OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT:
WWW.COLUMBIAFUNDS.COM
OUR E-MAIL ADDRESS IS:
SERVICEINQUIRIES@COLUMBIAMANAGEMENT.COM
SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS,
SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE
UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL.
1-800-922-6769
92
PARKING INFORMATION FOR 2005 ANNUAL SHAREHOLDER INFORMATION MEETING
A public lot is located at 172 West Madison, between Wells and LaSalle, on the
north side of the street. The entrance is on Madison. Madison is a one-way west
street. This lot is approximately two blocks west of the Bank One building.
Valet parking is available at 183 West Monroe, between Wells and LaSalle, on the
south side of the street. The entrance is on Monroe. Monroe is a one-way east
street. No vans or trucks are allowed to park at this lot. This lot is
approximately three blocks west of the Bank One building.
55 East Monroe (formerly Mid-Continental Plaza Parking) is located on East
Monroe Street two and one half blocks east of the Bank One building. The
entrance is on the south side (right) of Monroe Street, between Wabash and
Michigan Avenues. Monroe is a one-way street east.
Grant Park Underground (indoor) parking is located 3 1 1/42 blocks east of the
Bank One building on Monroe Street. The entrance is on the north side of Monroe
Street between Columbus Drive and Lake Shore. Monroe is two-way between Lake
Shore Drive and Michigan Avenue. West of Michigan, Monroe is a one-way east.
For directions using public transportation, call (312) 836-7000 for CTA travel
information or visit the CTA website at www.transitchicago.com. For Metra
information call (312) 322-6777 during business hours or find information at
www.metrarail.com.
[LOCATION MAP]
SAVE THE DATE!
SEPTEMBER 27, 2005
Meet your portfolio managers, analysts
and fellow shareholders
at
Columbia Acorn Funds
2005 Annual Shareholder Information Meeting
Bank One Auditorium, Plaza Level
38 South Dearborn Street
Chicago, IL 60602
Bring your ideas and questions.
We're anxious to hear what's onyour mind.
[PHOTO OF ACORNS]
---------------------
PRESORTED
FIRST-CLASS MAIL
U.S. POSTAGE PAID
HOLLISTON, MA
[EAGLE HEAD LOGO] COLUMBIA FUNDS PERMIT NO. 20
---------------------
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2005 COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
SHC-44/88229-0705 05/7049
COLUMBIA ACORN
FUNDS
SEMIANNUAL REPORT
JUNE 30, 2005
[PHOTO OF WOMAN HOLDING A PHONE]
COLUMBIA ACORN FUND
COLUMBIA ACORN INTERNATIONAL
COLUMBIA ACORN USA
COLUMBIA ACORN INTERNATIONAL SELECT
COLUMBIA ACORN SELECT
COLUMBIA THERMOSTAT FUND
LOOK INSIDE FOR DETAILS
ON THE 2005 COLUMBIA
ACORN FUNDS SHAREHOLDER
INFORMATION MEETING.
----------------------------
NOT FDIC MAY LOSE VALUE
INSURED -----------------
NO BANK GUARANTEE
----------------------------
PLEASE JOIN US AT THE
2005
ANNUAL SHAREHOLDER INFORMATION MEETING
o
September 27, 2005
9 a.m. - 10 a.m. Central time,
immediately following the special meeting of shareholders
o
Bank One Auditorium, Plaza Level
38 South Dearborn Street
Chicago, IL 60602
REFRESHMENTS WILL BE SERVED.
o
PLEASE RSVP BY SEPTEMBER 20 BY CALLING
800-922-6769
DIRECTIONS TO THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING
The Bank One Auditorium is located on the Plaza Level of the Bank One building.
The Bank One building is located in the center of the Loop, bordered by Dearborn
Street on the east, Madison Street on the north, Clark Street on the west and
Monroe Street on the south.
FROM THE SOUTH:
Take 1-57 (which merges with I-94, also known as the Dan Ryan Expressway). Take
the Dan Ryan into Chicago. Follow the signs for the Kennedy Expressway West.
Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east)
from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn.
FROM THE NORTH:
Take the Kennedy Expressway (I-90/94) south to Chicago. Exit in the city at
Monroe Street. Turn left (east) from the exit onto Monroe Street. Proceed east
on Monroe Street to Dearborn.
FROM THE WEST:
Take the Eisenhower Expressway (I-290) from the west. This becomes Congress
Street in the city. Take Congress east to Dearborn Street. Turn left (north) on
Dearborn to Monroe Street.
FROM THE SOUTHWEST:
Take the Stevenson Expressway (I-55). Exit to the Kennedy Expressway
(North-Wisconsin). Travel on the Kennedy and exit using the Monroe Street exit.
Turn right (east) from the exit onto Monroe Street. Proceed east on Monroe
Street to Dearborn.
COLUMBIA ACORN FAMILY OF FUNDS SEMIANNUAL REPORT 2005
TABLE OF CONTENTS
COLUMBIA ACORN FAMILY OF FUNDS
Mid-Year Distributions 2
Net Asset Value Per Share 2
Share Class Performance 3
Fund Performance vs. Benchmarks 4
Squirrel Chatter: Discipline and Creativity 5
Understanding Your Expenses 8
COLUMBIA ACORN FUND
In a Nutshell 10
At a Glance 11
Major Portfolio Changes 22
Statement of Investments 24
COLUMBIA ACORN INTERNATIONAL
In a Nutshell 12
At a Glance 13
Major Portfolio Changes 36
Statement of Investments 38
Portfolio Diversification 43
COLUMBIA ACORN USA
In a Nutshell 14
At a Glance 15
Major Portfolio Changes 44
Statement of Investments 45
COLUMBIA ACORN INTERNATIONAL SELECT
In a Nutshell 16
At a Glance 17
Major Portfolio Changes 50
Statement of Investments 51
Portfolio Diversification 53
COLUMBIA ACORN SELECT
In a Nutshell 18
At a Glance 19
Major Portfolio Changes 54
Statement of Investments 55
COLUMBIA THERMOSTAT FUND
In a Nutshell 20
At a Glance 21
Statement of Investments 76
Statement of Assets and Liabilities 77
Statement of Operations 78
Statement of Changes in Net Assets 79
Financial Highlights 81
Notes to Financial Statements 82
COLUMBIA ACORN FAMILY OF FUNDS
Statements of Assets and Liabilities 58
Statements of Operations 59
Statements of Changes in Net Assets 60
Financial Highlights 64
Notes to Financial Statements 69
Columbia Acorn Family of Funds Information 86
Management Fee Evaluation of the
Senior Officer 87
THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY
AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO
BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY
CHANGE AT ANY TIME WITHOUT NOTICE AND THE PORTFOLIO MANAGERS MAY ALTER A FUND'S
PORTFOLIO HOLDINGS BASED ON THESE VIEWS AND THE FUND'S CIRCUMSTANCES AT THAT
TIME.
1
COLUMBIA ACORN FAMILY OF FUNDS
>2005 MID-YEAR DISTRIBUTIONS
The following table details the funds' mid-year distributions. The record date
for COLUMBIA ACORN, COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN USA, COLUMBIA
ACORN SELECT, COLUMBIA ACORN INTERNATIONAL SELECT, and COLUMBIA THERMOSTAT was
June 6, 2005. The ex-dividend date was June 7, 2005, and the payable date was
June 8, 2005.
- ----------------------------------------------------------------------------------------
COLUMBIA ACORN FUND CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains $0.3609 $0.3609 $0.3609
Short-term Capital Gains $0.0255 $0.0255 $0.0255
Ordinary Income None None None
Reinvestment Price $25.70 $24.88 $24.86
- ----------------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains None None None
Short-term Capital Gains None None None
Ordinary Income $0.3296 $0.1352 $0.1426
Reinvestment Price $28.97 $28.50 $28.49
- ----------------------------------------------------------------------------------------
COLUMBIA ACORN USA CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains $0.3640 $0.3640 $0.3640
Short-term Capital Gains None None None
Ordinary Income None None None
Reinvestment Price $25.17 $24.44 $24.44
- ----------------------------------------------------------------------------------------
COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains $0.0919 $0.0919 $0.0919
Short-term Capital Gains None None None
Ordinary Income None None None
Reinvestment Price $20.26 $19.61 $19.61
- ----------------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains None None None
Short-term Capital Gains None None None
Ordinary Income $0.2374 $0.1387 $0.1278
Reinvestment Price $17.64 $17.21 $17.23
- ----------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT CLASS A CLASS B CLASS C
--------------------------------------------
Long-term Capital Gains $0.0927 $0.0927 $0.0927
Short-term Capital Gains $0.1562 $0.1562 $0.1562
Ordinary Income None None None
Reinvestment Price $13.00 $12.99 $12.98
- ----------------------------------------------------------------------------------------
>NET ASSET VALUE PER SHARE AS OF 06/30/05
COLUMBIA COLUMBIA ACORN COLUMBIA
COLUMBIA ACORN COLUMBIA INTERNATIONAL COLUMBIA THERMOSTAT
ACORN FUND INTERNATIONAL ACORN USA SELECT ACORN SELECT FUND
- -----------------------------------------------------------------------------------------------------------------
Class A $26.21 $29.23 $25.73 $17.69 $20.68 $13.04
- -----------------------------------------------------------------------------------------------------------------
Class B $25.37 $28.74 $24.97 $17.25 $20.01 $13.02
- -----------------------------------------------------------------------------------------------------------------
Class C $25.35 $28.73 $24.96 $17.26 $20.00 $13.01
- -----------------------------------------------------------------------------------------------------------------
2
COLUMBIA ACORN FAMILY OF FUNDS
>SHARE CLASS PERFORMANCE Average Annual Total Returns through 6/30/05
CLASS A CLASS B CLASS C
Without With Without With Without With
Sales Charge Sales Charge Sales Charge Sales Charge Sales Charge Sales Charge
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 4.00% -1.98% 3.85% -1.15% 3.81% 2.81%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* 2.60% -3.30% 2.28% -2.72% 2.24% 1.24%
- ---------------------------------------------------------------------------------------------------------------------
1 year 14.22% 7.66% 13.41% 8.41% 13.32% 12.32%
- ---------------------------------------------------------------------------------------------------------------------
3 years 17.25% 14.96% 16.46% 15.71% 16.43% 16.43%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 12.71% 11.31% 11.98% 11.70% 11.96% 11.96%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* -0.33% -6.06% -0.50% -5.45% -0.50% -1.49%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* 2.83% -3.09% 2.47% -2.53% 2.43% 1.43%
- ---------------------------------------------------------------------------------------------------------------------
1 year 22.16% 15.14% 21.28% 16.28% 21.22% 20.22%
- ---------------------------------------------------------------------------------------------------------------------
3 years 17.32% 15.03% 16.49% 15.75% 16.51% 16.51%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 4.20% 2.90% 3.50% 3.13% 3.50% 3.50%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 5.42% -0.64% 5.24% 0.24% 5.20% 4.20%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* 5.38% -0.68% 4.98% -0.02% 4.94% 3.94%
- ---------------------------------------------------------------------------------------------------------------------
1 year 15.44% 8.80% 14.67% 9.67% 14.52% 13.52%
- ---------------------------------------------------------------------------------------------------------------------
3 years 16.34% 14.07% 15.56% 14.80% 15.54% 15.54%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 14.78% 13.35% 14.04% 13.78% 14.03% 14.03%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* -1.00% -6.70% -1.14% -6.05% -1.20% -2.19%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* 0.44% -5.34% 0.17% -4.80% 0.05% -0.95%
- ---------------------------------------------------------------------------------------------------------------------
1 year 15.66% 9.01% 15.01% 10.01% 14.77% 13.77%
- ---------------------------------------------------------------------------------------------------------------------
3 years 15.00% 12.75% 14.22% 13.45% 14.18% 14.18%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 0.44% -0.82% -0.25% -0.67% -0.25% -0.25%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (10/16/2000)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 5.40% -0.66% 5.20% 0.20% 5.20% 4.20%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* -0.27% -6.00% -0.62% -5.57% -0.67% -1.66%
- ---------------------------------------------------------------------------------------------------------------------
1 year 9.96% 3.64% 9.08% 4.08% 9.03% 8.03%
- ---------------------------------------------------------------------------------------------------------------------
3 years 14.05% 11.82% 13.23% 12.44% 13.24% 13.24%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 10.63% 9.24% 9.88% 9.58% 9.86% 9.86%
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (3/3/2003)
- ---------------------------------------------------------------------------------------------------------------------
3 months* 2.54% -3.35% 2.39% -2.61% 2.39% 1.39%
- ---------------------------------------------------------------------------------------------------------------------
Year to date* 1.37% -4.46% 0.99% -3.97% 0.99% 0.00%
- ---------------------------------------------------------------------------------------------------------------------
1 year 7.54% 1.36% 6.93% 1.93% 6.79% 5.79%
- ---------------------------------------------------------------------------------------------------------------------
Life of fund 14.05% 11.19% 13.29% 12.19% 13.22% 13.22%
- ---------------------------------------------------------------------------------------------------------------------
* Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM 5.75% SALES CHARGE FOR CLASS
A SHARES, THE APPROPRIATE CLASS B CONTINGENT DEFERRED SALES CHARGE FOR THE
HOLDING PERIOD AFTER PURCHASE AS FOLLOWS: THROUGH FIRST YEAR--5%, SECOND
YEAR--4%, THIRD YEAR--3%, FOURTH YEAR--3%, FIFTH YEAR--2%, SIXTH YEAR--1%,
THEREAFTER--0%; AND THE CLASS C CONTINGENT DEFERRED SALES CHARGE OF 1% FOR THE
FIRST YEAR ONLY. PERFORMANCE OF THE DIFFERENT SHARE CLASSES WILL VARY BASED ON
DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS.
Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
3
COLUMBIA ACORN FAMILY OF FUNDS
>FUND PERFORMANCE VS. BENCHMARKS Class A Shares, without sales charge,
Average Annual Total Returns through
6/30/05
2nd Year to 1 3 Life
quarter* Date* year years of Fund
- ---------------------------------------------------------------------------------------------------
COLUMBIA ACORN
FUND (10/16/2000) 4.00% 2.60% 14.22% 17.25% 12.71%
- ---------------------------------------------------------------------------------------------------
Russell 2500 4.52% 1.24% 12.73% 14.76% 8.96%
- ---------------------------------------------------------------------------------------------------
S&P 500 1.37% -0.81% 6.32% 8.28% -1.39%
- ---------------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 3.07% -0.16% 9.67% 12.45% 8.57%
- ---------------------------------------------------------------------------------------------------
Lipper Mid-Cap
Core Funds Index 3.13% 1.88% 11.47% 12.71% 4.90%
- ---------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL (10/16/2000) -0.33% 2.83% 22.16% 17.32% 4.20%
- ---------------------------------------------------------------------------------------------------
S&P/Citigroup
EMI Global ex-US -0.40% 2.79% 21.33% 21.26% 10.85%
- ---------------------------------------------------------------------------------------------------
MSCI EAFE -1.01% -1.17% 13.65% 12.06% 2.05%
- ---------------------------------------------------------------------------------------------------
Lipper Int'l Small-
Cap Funds Index -0.22% 3.62% 20.72% 21.47% 9.28%
- ---------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
(10/16/2000) 5.42% 5.38% 15.44% 16.34% 14.78%
- ---------------------------------------------------------------------------------------------------
Russell 2000 4.32% -1.25% 9.45% 12.81% 7.66%
- ---------------------------------------------------------------------------------------------------
Lipper Small-Cap
Core Funds Index 3.07% -0.16% 9.67% 12.45% 8.57%
- ---------------------------------------------------------------------------------------------------
S&P 500 1.37% -0.81% 6.32% 8.28% -1.39%
- ---------------------------------------------------------------------------------------------------
COLUMBIA ACORN INT'L
SELECT (10/16/2000) -1.00% 0.44% 15.66% 15.00% 0.44%
- ---------------------------------------------------------------------------------------------------
S&P/Citigroup World
ex-US Cap Range $2-10B -0.29% 0.79% 17.64% 17.54% 8.94%
- ---------------------------------------------------------------------------------------------------
MSCI EAFE -1.01% -1.17% 13.65% 12.06% 2.05%
- ---------------------------------------------------------------------------------------------------
Lipper International
Funds Index -0.60% -0.65% 13.45% 11.16% 2.50%
- ---------------------------------------------------------------------------------------------------
COLUMBIA ACORN
SELECT (10/16/2000) 5.40% -0.27% 9.96% 14.05% 10.63%
- ---------------------------------------------------------------------------------------------------
S&P MidCap 400 4.26% 3.85% 14.03% 13.16% 8.05%
- ---------------------------------------------------------------------------------------------------
Lipper Mid-Cap
Growth Index 3.14% -0.92% 7.31% 9.82% -6.13%
- ---------------------------------------------------------------------------------------------------
S&P 500 1.37% -0.81% 6.32% 8.28% -1.39%
- ---------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT
FUND (3/3/2003) 2.54% 1.37% 7.54% -- 14.05%
- ---------------------------------------------------------------------------------------------------
S&P 500 1.37% -0.81% 6.32% -- 18.14%
- ---------------------------------------------------------------------------------------------------
Lehman U.S. Credit
Intermediate Bond Index 2.76% 1.56% 5.79% -- 4.47%
- ---------------------------------------------------------------------------------------------------
Lipper Flexible
Portfolio Funds Index 1.18% -0.36% 6.70% -- 14.78%
- ---------------------------------------------------------------------------------------------------
* Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE
RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of
U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad
market-weighted index of 400 stocks that are in the next size/tier down from the
S&P 500. RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies,
formed by taking the largest 3,000 companies and eliminating the largest 1,000.
RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group.
S&P/CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable
capital of developed and emerging countries, selected by index sponsor, outside
the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a
widely recognized international benchmark that comprises 20 major markets in
proportion to world stock market capitalization. S&P/CITIGROUP WORLD EX-US CAP
RANGE $2-10B is a subset of the broad market selected by the index sponsor,
representing the mid-cap developed market excluding the U.S. LIPPER INDEXES
include the largest funds tracked by Lipper, Inc. in the named category. LIPPER
MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX,
30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S.
funds, not including non-U.S. small-cap funds; LIPPER INTERNATIONAL SMALL-CAP
FUNDS INDEX, 10 largest non-U.S. funds investing in small-cap companies,
including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30
largest small-cap core funds, including Columbia Acorn Fund and Columbia Acorn
USA. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of
the 30 largest mutual funds within the Flexible Portfolio fund classification,
as defined by Lipper. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the
intermediate component of the U.S. Credit Index. The U.S. Credit Index includes
publicly issued U.S. corporate and foreign debentures and secured notes that
meet specified maturity, liquidity, and quality requirements. All indexes are
unmanaged and returns include reinvested distributions. It is not possible to
invest directly in an index.
1-800-922-6769
4
>SQUIRREL CHATTER: DISCIPLINE AND CREATIVITY
[PHOTO OF RALPH WANGER]
A popular new book by Tom Friedman, "The World Is Flat: A Brief History of the
Twenty-First Century," recounts how developing countries such as India and China
are using modern technology to compete with the United States in both
manufacturing and services. He contrasts the success of China and India to the
failure of the Arab states to participate in the modern world. He deplores the
influence of Yamani, the former Saudi oil minister, who used oil as an economic
weapon, and Osama bin Laden who uses terror as a political weapon. Friedman
compares the stagnant current state of Arab culture with its peak in the 12th
century. "What makes Yamanism and Bin Ladenism unfortunate as strategies for the
Arabic world is that they ignore the examples within the Arab culture and
civilization - when it was at its height - of discipline, hard work, knowledge,
achievement, scientific inquiry, and pluralism." 1
The popular Susan Hockfield was just installed as president of MIT. In her
inaugural speech she invoked her list of virtues. She said, "The value of
engineering - the rigor; the unflappable curiosity; the discipline and
creativity; the appetite for good, old fashioned hard work; the passionate,
enthusiastic, can do, hands-on, fix-it-now attitude - these values are and
always will be the values of MIT."
The rules for success in the world don't seem to have changed very much.
Twelfth century Cordoba and 21st century Cambridge are completely different in
almost every way, but the characteristics that make you successful have not
changed. Any financial analyst or serious investor should apply the engineer's
characteristics of discipline, hard work, knowledge and enthusiasm to investing.
President Hockfield's linking of discipline and creativity is interesting.
It's widely believed that we should diversify and balance our investments. We
balance stocks vs. bonds, growth stocks vs. value stocks, big-cap vs. small-cap
stocks, and U.S. stocks vs. international, but it is unusual to think of the
balance between discipline and creativity; yet this balance is what I believe
brings good investment results. Discipline without creativity is sterile - you
tend to get an index fund. Index funds run by computer algorithm are boring and
backward looking - although they have a significant place in investment
portfolios. Creativity without discipline tends to result in wild speculation
and money-losing results. We all remember the dot.com's in 1999 when the market
was dominated by speculators who ignored valuation in favor of science- fiction
fantasies. The resulting bubble was a seductive, narcotic experience for a year
or two but of course ended very badly. We believe the Columbia Acorn Funds have
been successful because our analysts have been able to maintain a balance
between discipline and creativity.
WE ARE NOT MANUFACTURERS
Organizations that are in the business of marketing mutual funds often prefer
discipline and are made nervous by creativity. For instance, Raymond "Chip"
Mason, chairman of Legg Mason, a major force in the mutual fund business, said
recently, "For two years we've been looking to cross the line and become pure
asset management. All the regulators have been pointing toward the need to
separate the manufacturing and distribution businesses." 2
I have been in corporate meetings in which mutual fund portfolio
management was called "manufacturing" but this is a strange and inapt metaphor.
Manufacturers make products. Mutual funds are NOT a product. Cap'n Crunch cereal
is a product. When you go to the store to buy a new box of Cap'n Crunch you
expect the taste and nutrition performance to be exactly like the last box.
Manufacturing cereal is very disciplined resulting in high quality and high
reliability, so that every box is identical. Since you are a mutual fund
shareholder you know that a mutual fund could be a lot better or a lot worse
than you expected when you bought it. Investing involves forecasting the future,
but forecasting is an uncertain and sloppy process. While discipline is
important, you need a lot of creativity as well.
Predicting the future does not require a fortune teller with a crystal
ball. It is more like watching a skilled athlete. When you go to a baseball game
and a batter hits a fly ball to left field, the fielder will see the ball
heading his direction and, by experience, run to where the ball is going to land
and make what looks like a routine catch. The fielder has to predict the flight
of the ball, which for a physicist would require solving a complicated equation,
but the player shows that it is not an impossible task. Like the outfielder, we
have figured out where trends are likely going to land with reasonable success.
As in baseball, the ball can elude the fielder and the batter
5
ends up on second base. Sometimes our analysts miss the ball too, but for the
full season we tend to catch more balls than we miss.
TWO WHEELS GOOD, FOUR WHEELS BAD
Other teams haven't done so well. Forty years ago, major U.S. car makers were
among the largest companies in the world and were highly profitable. Since then,
the U.S. automotive industry has fallen into a long slump. Their corporate bonds
have been downgraded in quality, which is a definite sign of financial problems.
I believe that these companies were complacent and arrogant, so the German and
Japanese car makers beat them up.
A long time ago, perhaps 1966, I attended a meeting of the Chicago Science
Analysts with the General Time Corporation. The company's main business was
making name-brand clocks like Seth Thomas and Big Ben. It also made automobile
clocks. The clocks were sold as accessories with the car. They were mechanical
clocks because electronic clocks hadn't yet been invented. They worked for about
three months and then broke. The U.S. automotive giant that bought the clocks
from General Time paid $3.25 per clock and resold it to the customer for $21. I
asked the president of General Time why his clocks didn't work better. I knew
this was an impertinent question but I wanted to see how he would react. I
expected him to take a defensive position retorting that the clocks were fine
but weren't being used correctly. To my surprise he admitted that the clocks
WERE lousy and he explained why.
General Time couldn't make a good clock for $3.25. The clock needed an
additional component that would have made it a sturdy, reliable device, but this
improvement would have raised the selling price to $3.75. Its customer, the
automobile manufacturer, was adamant about sticking to the lower price. Even to
an inexperienced analyst, as I was in 1966, I did not see how the automaker
could prosper if it was not delivering a high-quality car. Such a successful
company could have paid $3.75 for a clock and sold it for a decent profit even
if it kept the price at $21. While this would have been a less enormous markup,
the car likely would have been a better vehicle. If the automaker was willing to
sell a crummy clock, then I thought that customers would perceive that it was
cutting corners on all the other components of the vehicle too. Bad clock, bad
car. This willingness to forego quality for price made room for the imports.
Why am I bringing up an anecdote from 40 years ago? I think there are some
useful lessons here for financial analysts and investors. First, in a management
meeting it is okay to ask tough questions. You get more meaningful answers that
way. Second, you can find out a lot about a company by talking to its suppliers
or customers. Company spokesmen will only give you their own corporate press
release. Third, a long-term trend will take a long time to develop but it is
enormously important.
At the time of my 1966 meeting, U.S. automakers were riding high because
foreign car imports were not yet a problem. In 1960, Japan exported only 39,000
vehicles. By 1970, the Japanese were starting to exploit the lower quality of
U.S. cars and exported 1.1 million cars. In 1980, exports rose to 6 million and
the Japanese were producing more vehicles than U.S. manufacturers. U.S.
automotive companies had to react to the loss of market share from high-quality
imports. However, once there is a loss of market share, it is not usually
readily reversible.
DAVID ALWAYS BEATS GOLIATH
There are several lessons we can learn from the decline of Arab civilization and
the problems of U.S. auto companies: (1) To operate a successful business, the
world is too competitive to be complacent. Like baseball players, companies have
to fight to keep their position on the team. Great U.S. businesses must
constantly compete in the world market and it is darn tough. (2) Big companies
are often just big targets. Small companies are hungry to succeed and are
constantly focused on improving with the hope of taking some of the flabby
giant's customers. (3) History provides a useful context. Discipline,
creativity, hard work, knowledge, achievement, and a can-do, hands-on,
fix-it-now attitude worked in the past and will work now. (4) We believe
small-cap investing works if you can identify the hungry, small companies whose
employees embrace our list of exemplary values. The core investment strategy of
the Columbia Acorn Funds has always been to try to find small- and mid-cap
companies that are on the way up. We don't want to own once-great companies that
are now on their way down. This is partly a matter of personal taste, because we
find following big, sick companies
1-800-922-6769
6
to be depressing. Even though there are occasional turnarounds in these big
companies, it seems to us that is not the way to bet.
SO LONG AND BEST REGARDS!
This is my final "Squirrel Chatter." I am retiring from Columbia Wanger Asset
Management as of September 30, but I will still be a trustee of Columbia Acorn
Trust. While I considered writing a few more essays, current regulatory rules
are not conducive to the free-ranging thought that was characteristic of these
essays. I have great confidence in Chuck McQuaid and his team of analysts and
portfolio managers to keep the performance of the Funds at a competitive level.
Thank you, fellow shareholders, for your support over 35 years. I regard myself
as truly fortunate to have been able to build a career in this exciting
industry. I am especially proud that we have enabled thousands of our
shareholders to pursue their economic goals by investing in our funds.
COLUMBIA WAM NEWS
We are pleased to announce that Ashish Kohli has joined our domestic
analyst team to follow health care. Jason Selch, who followed energy, departed
in May. We are searching for his replacement and continue to talk to some
promising candidates. Your Columbia Acorn investment team includes 20 investment
analysts and portfolio managers.
/s/ Ralph Wanger
Ralph Wanger
FOUNDER, ADVISOR AND TRUSTEE
COLUMBIA WANGER ASSET MANAGEMENT, L.P.
- --------------------------------------------------------------------------------
1 Friedman, Thomas, THE WORLD IS FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST
CENTURY, Farrar, Straus and Giroux, 2005. Page 405.
2 Raymond "Chip" Mason, chairman of Legg Mason, THE WALL STREET JOURNAL,
June 27, 2005, page C1.
7
>UNDERSTANDING YOUR EXPENSES
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The
information on these pages is intended to help you understand your ongoing costs
of investing in the funds and to compare these costs with the ongoing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in the Class A, B and C shares of the Columbia
Acorn Funds for the last six months. The information in the following table is
based on an initial investment of $1,000, which is invested at the beginning of
the period and held for the entire period. Expense information is calculated two
ways and each method provides you with different information. The amount listed
in the "actual" column is calculated using each fund's actual operating expenses
and total return for the period. The amount listed in the "hypothetical" column
assumes that the return each year is 5% before expenses and then applies each
fund's actual expense ratio for the period to the hypothetical return. You
should not use the hypothetical account values and expenses to estimate either
your actual account balance at the end of the period or the expenses you paid
during the reporting period.
COMPARE WITH OTHER FUNDS
Since all mutual funds are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the funds with other funds. To do
so, compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o For shareholders who receive their account statements from Columbia
Management Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.922.6769.
o For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance.
1. Divide your ending account balance by $1,000. For example, if an
account balance was $8,600 at the end of the period, the result
would be 8.6.
2. In the section of the table titled "Expenses paid during the
period," locate the amount for your fund. You will find this number
is in the column labeled "actual." Multiply this number by the
result from step 1. Your answer is an estimate of the expenses you
paid on your account during the period.
1-800-922-6769
8
>UNDERSTANDING YOUR EXPENSES
>January 1, 2005 - June 30, 2005
ACCOUNT VALUE AT ACCOUNT VALUE AT FUND'S
THE BEGINNING OF THE END OF EXPENSES PAID ANNUALIZED
THE PERIOD ($) THE PERIOD ($) DURING THE PERIOD ($) EXPENSE
- ---------------------------------------------------------------------------------------------------- RATIO (%)*
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN FUND
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,025.98 $1,019.54 $5.32 $5.31 1.06%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,022.81 $1,016.12 $8.78 $8.75 1.75%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,022.41 $1,015.62 $9.28 $9.25 1.85%
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,028.32 $1,018.30 $6.59 $6.56 1.31%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,024.70 $1,014.73 $10.19 $10.14 2.03%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,024.30 $1,014.38 $10.54 $10.49 2.10%
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN USA
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,053.80 $1,018.15 $6.82 $6.71 1.34%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,049.79 $1,014.73 $10.32 $10.14 2.03%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,049.39 $1,014.23 $10.82 $10.64 2.13%
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN
INTERNATIONAL SELECT
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,004.41 $1,016.36 $8.45 $8.50 1.70%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,001.69 $1,013.39 $11.42 $11.48 2.30%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,000.50 $1,012.65 $12.15 $12.23 2.45%
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN SELECT
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $997.32 $1,018.60 $6.19 $6.26 1.25%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $993.80 $1,014.98 $9.79 $9.89 1.98%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $993.31 $1,014.53 $10.23 $10.34 2.07%
- -----------------------------------------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND
- -----------------------------------------------------------------------------------------------------------------
Class A $1,000 $1,000 $1,013.69 $1,022.32 $2.50 $2.51 0.50%
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,000 $1,009.92 $1,019.34 $5.48 $5.51 1.10%
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,000 $1,009.92 $1,018.60 $6.23 $6.26 1.25%
- -----------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
Had the Investment Adviser and/or Transfer Agent not waived a portion of
expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the funds and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
Columbia Thermostat Fund's expenses do not include fees and expenses incurred by
the Fund from the underlying portfolio funds.
* For the six months ended 06/30/05.
9
COLUMBIA ACORN FUND
>IN A NUTSHELL
[PHOTO OF CHARLES P. MCQUAID AND ROBERT A. MOHN]
Columbia Acorn Fund was up 4.00% (Class A shares, without sales charge) in the
second quarter, slightly underperforming the Russell indexes but outperforming
the Lipper Small- and Mid-Cap Funds indexes as well as the large-cap S&P 500
Index. In the first half of 2005, the Fund grew 2.60%, moderately beating all of
its benchmarks. (See Page 4 performance data). 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.
Columbia Acorn's domestic stocks rose 5.16% in the quarter, driven by good
stock selections. Handbag designer Coach and women's apparel retailer Chico's
FAS were the Fund's two top dollar winners, each ringing up gains of about 20%.
Hobby goods retailer Michaels Stores and apparel retailer Abercrombie & Fitch
also were among our top 10 dollar gainers, rising 14% and 20% respectively. All
were up on better than expected earnings and outperformed their group in the
quarter. We thank our consumer analyst, Susie Hultquist, for these fine stock
picks.
Esco Technologies, a producer of remotely read electric meters, jumped 25%
on large orders and fine earnings (see sidebar for details). Filter maker Cuno
surged 39% in the quarter when it agreed to sell. Our industrial analyst Rob
Chalupnik found both of these winners. Southwestern Energy spurted up 66% in the
quarter, as investors got excited about new drilling prospects. Communications
tower company Crown Castle International transmitted a 26% gain, spurred by an
attractive debt refinancing. Hospitality information system provider Micros
Systems served a 22% return on better than expected earnings.
Columbia Acorn's largest dollar losers were Navigant Consulting, off 35%,
and Kronos, down 21%, both lower due to earnings estimate cuts. Harley-Davidson
hit a speed bump, falling 14% on lower than expected production hikes.
Columbia Acorn's foreign stocks rose 1.91% and ended the quarter
representing 15% of the Fund. Oil-pipe makers Vallorec and Tenaris continued
their runs, each producing gains of more than 30%. Sweden-based kitchen cabinet
maker Nobia fell 21% on lower revenues and manufacturing problems in its U.K.
operations. The Fund's foreign stocks overall did fine against their benchmarks
and were up nicely in local currencies, but dollar gains were slashed by
currency movements.
/s/ Charles P. McQuaid /s/ Robert A. Mohn
Charles P. McQuaid Robert A. Mohn
LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
METERING SUCCESS
- --------------------
We wrote about Esco Technologies in our second quarter 2004 shareholder report,
citing the virtues of all three of its businesses - filters, remotely read
electric meters, and radio frequency shielding products. Since the company's
meter business is accelerating and the stock has continued to do well, we are
providing more perspective. We had unsuccessfully invested in remote metering
many years ago, so this time we did lots of homework. We talked to customers and
competitors and visited trade shows. Our contacts confirmed that Esco's meters
were reliable and cost effective, and could help manage peak electricity demand.
Meter orders have surged and meters are now driving Esco's profits. The stock is
up 252% from our first purchase and we think excellent growth may continue.
- --------------------------------------------------------------------------------
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL
RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: COACH, 1.4%;
CHICO'S FAS, 1.2%; MICHAELS STORES, 0.9%; ABERCROMBIE & Fitch, 0.6%; ESCO
TECHNOLOGIES, 0.7%; CUNO, 0.4%; SOUTHWESTERN ENERGY, 0.3%; CROWN CASTLE
INTERNATIONAL, 0.6%; MICROS SYSTEMS, 0.6%, NAVIGANT CONSULTING, 0.2%, KRONOS,
0.4%, HARLEY-DAVIDSON, 0.6%, VALLOUREC, 0.3%; TENARIS, 0.3%; NOBIA,, 0.2%.
1-800-922-6769
10
COLUMBIA ACORN FUND TICKER SYMBOL: LACAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $14,502.8 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
-------------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR 3 YEARS (10/16/2000)
-------------------------------------------------------
Returns before NAV 2.60% 14.22% 17.25% 12.71%
taxes POP -3.30 7.66 14.96 11.31
- --------------------------------------------------------------------------------
Returns after taxes NAV 2.35 13.32 16.93 11.87
on distributions POP -3.53 6.81 14.65 10.48
- --------------------------------------------------------------------------------
Returns after taxes NAV 1.96 10.22 14.94 10.74
on distributions and POP -1.89 5.89 12.91 9.49
sale of fund shares
- --------------------------------------------------------------------------------
S&P 500 (pretax) -0.81 6.32 8.28 -1.39
- --------------------------------------------------------------------------------
Russell 2500 (pretax) 1.24 12.73 14.76 8.96
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 21.0%
Industrial Goods/Services 15.4%
Finance 12.1%
Other* 11.6%
Energy/Minerals 9.4%
Health Care 8.6%
Information 21.9%
Software/Services 9.0%
Computer Related Hardware 6.6%
Telecommunications 3.9%
Media 2.4%
* Other includes short-term obligations, cash and other assets less liabilities
of 7.6%.
Foreign equities within the portfolio were 15.0% diversified by country as
follows: 5.7% Europe ex-Ireland & UK; 2.9% UK/Ireland; 2.8% Latin America and
Emerging Markets; 1.8% Canada; 1.3% Japan; 0.5% Australia/New Zealand.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS A)
- --------------------------------------------------------------------------------
>October 16, 2000 through June 30, 2005
Illustration is based on a hypothetical $50,000 investment from inception in
Class A shares of the Fund, which includes the 4.50% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The Russell 2500 is the
smallest 2,500 U.S. companies taken from a group of the largest 3,000 companies.
The index is unmanaged and returns for the index and the Fund include reinvested
dividends and capital gains. It is not possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $87,883 $85,204 $85,138
------------------------------------------------------
WITH
SALES CHARGE $83,929 $84,204 $85,138
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA ACORN COLUMBIA ACORN
FUND-A FUND-A WITH
AT NAV SALES CHARGE RUSSELL 2500
----------------- -------------- ------------
10/16/00 50000 47750 50000
10/31/00 51370 49058 52159
48668 46478 47569
12/31/00 53695 51279 51666
54662 52202 53364
53257 50861 49928
3/31/01 50823 48536 47189
55291 52803 51356
57635 55041 52901
6/30/01 58390 55762 53652
57245 54669 51733
54961 52488 50038
9/30/01 47476 45339 43563
49508 47280 45815
53280 50882 49520
12/31/01 56679 54129 52296
56107 53582 51647
55372 52880 50743
3/31/02 59414 56740 54251
59254 56587 54113
57440 54856 52527
6/30/02 54511 52058 49567
48013 45853 43652
48397 46220 43784
9/30/02 45498 43451 40315
47409 45276 41629
50467 48196 45027
12/31/02 48842 46644 42990
47665 45520 41848
46902 44792 40842
3/31/03 47475 45338 41232
51581 49260 44906
55213 52728 49323
6/30/03 56902 54341 50265
59542 56863 52967
62633 59814 55418
9/30/03 61900 59114 54664
66932 63920 58983
69101 65991 61204
12/31/03 70759 67575 62555
73307 70008 64837
74707 71345 65839
3/31/04 75790 72379 66235
73046 69759 63054
74354 71008 64341
6/30/04 76934 73472 66457
73010 69725 62590
72915 69634 62430
9/30/04 76233 72803 64785
78116 74601 66263
82998 79263 71210
12/31/04 85657 81802 73998
83773 80003 71512
86118 82243 73131
3/31/05 84501 80698 71674
81036 77390 68451
85064 81236 72593
6/30/05 87883 83929 74915
- --------------------------------------------------------------------------------
COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Coach 1.4%
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
2. Chico's FAS 1.2%
WOMEN'S SPECIALTY RETAILER
3. XTO Energy 1.2%
NATURAL GAS PRODUCER
4. International Game Technology 1.2%
SLOT MACHINES & PROGRESSIVE JACKPOTS
5. AmeriCredit 1.0%
AUTO LENDING
6. Expeditors International of Washington 0.9%
INTERNATIONAL FREIGHT FORWARDER
7. Michaels Stores 0.9%
CRAFT & HOBBY SPECIALTY RETAILER
8. Western Wireless 0.9%
RURAL CELLULAR PHONE SERVICES
9. Peoples Bank of Bridgeport 0.9%
CONNECTICUT SAVINGS & LOAN
10. ITT Educational Services 0.8%
POSTSECONDARY DEGREE PROGRAMS
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
11
COLUMBIA ACORN INTERNATIONAL
>IN A NUTSHELL
[PHOTO OF P. ZACHARY EGAN AND LOUIS J. MENDES III.]
Columbia Acorn International finished the second quarter down 0.33% (Class A
shares, without sales charge), slightly ahead of the benchmark S&P/Citigroup EMI
Global ex-U.S. return which fell 0.40%. The larger cap MSCI EAFE Index was down
1.01% in the quarter. Year-to-date, the Fund was up 2.83%, which puts it ahead
of the benchmark, and well ahead of the EAFE Index. As has been the case for
several years, international small-cap stocks continued to substantially
outperform their large-cap counterparts.
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 THAT THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
Steel pipe manufacturers seemed unlikely candidates for the quarter's
biggest winners considering the poor performance of the steel sector in general,
but two of the Fund's investments, Vallourec and Tenaris, earned this
distinction by returning more than 30% to shareholders. Their specialty steel
products are critical to the successful development of oil and gas fields
globally. In the past year, both companies have seen strong volume and price
increases as high energy prices stimulated oil and gas companies to increase
spending on exploration and pipelines. These two companies have been central to
our strategy of taking advantage of an anticipated rebound in oil-field service
spending. As both companies were among the Fund's top holdings at the beginning
of the quarter, their contribution to overall return was substantial. Other
positive drivers to performance were Housing Development Finance, the Indian
mortgage finance company, which rose 25% on continued strong mortgage growth,
and SES Global, the European satellite services company, up 19%, from the
region's switch to an HDTV format.
During the quarter, the U.S. dollar reversed its recent slide against most
world currencies, appreciating more than 7% against the euro. This compounded
otherwise moderate weakness on several of our long-term European winners, such
as Nobia (kitchen cabinets), Sligro Food Group (food distribution) and United
Services Group (temporary staffing), each of which fell more than 15% in dollar
terms. Other sizable holdings negatively affecting performance came from diverse
sectors in Japan, including Funai Electric (consumer electronics), and Kappa
Create (restaurants). Funai Electric was hurt by raw material price increases
while Kappa Create's profitability remains under pressure as it works to
maintain its share of an increasingly crowded marketplace.
/s/ P. Zachary Egan /s/ Louis J. Mendes III
P. Zachary Egan Louis J. Mendes III
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
PIPING PROFITS
- --------------------
Headquartered in Argentina, Tenaris is a global manufacturer and supplier of
seamless steel pipe products and related services. It has locations ranging from
Japan to Mexico to Italy. High oil prices are driving energy companies to
increase their exploration and production activities. With more than 50% of its
revenue coming from energy-related equipment sales, this directly translates
into more orders for the company. In addition, Tenaris competes in a specialty
niche, high-demand product category that is giving it the pricing power to
protect and expand margins even as raw material prices are falling.
- --------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR
ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS,
TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE
FLUCTUATIONS. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE
STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF
OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE,
MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: VALLOUREC,
1.5%; TENARIS, 1.2%; HOUSING DEVELOPMENT FINANCE, 1.2%; SES GLOBAL, 1.3%; NOBIA,
0.7%; SLIGRO FOOD GROUP, 0.7%; UNITED SERVICES GROUP, 0.8%; FUNAI ELECTRIC,
0.5%; KAPPA CREATE, 0.3%.
1-800-922-6769
12
COLUMBIA ACORN INTERNATIONAL TICKER SYMBOL: LAIAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $2,268.3 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
-------------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR 3 YEARS (10/16/2000)
-------------------------------------------------------
Returns before NAV 2.83% 22.16% 17.32% 4.20%
taxes POP -3.09 15.14 15.03 2.90
- --------------------------------------------------------------------------------
Returns after taxes NAV 2.42 21.89 17.21 3.50
on distributions POP -3.47 14.88 14.92 2.20
- --------------------------------------------------------------------------------
Returns after taxes NAV 1.83 14.60 15.04 3.37
on distributions and POP -2.01 10.03 13.02 2.25
sale of fund shares
- --------------------------------------------------------------------------------
S&P/Citigroup EMI 2.79 21.33 21.26 10.85
Global ex-US (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes. Investment
returns and principal value may fluctuate, resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 19.4%
Finance 13.8%
Information 13.6%
Other* 10.5%
Energy/Minerals 9.5%
Health Care 6.7%
Industrial Goods/Services 26.5%
* Other includes short-term obligations, cash and other assets less liabilities
of 4.0%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS A)
- --------------------------------------------------------------------------------
>October 16, 2000 through June 30, 2005
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The S&P/Citigroup EMI
Global ex-US is Citigroup's index of the bottom 20% of institutionally
investable capital of developed and emerging countries, as selected by
Citigroup, excluding the U.S. The index is unmanaged and returns for both the
index and Fund include reinvested dividends and capital gains. It is not
possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $12,140 $11,762 $11,761
------------------------------------------------------
WITH
SALES CHARGE $11,442 $11,562 $11,761
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA ACORN COLUMBIA ACORN
INTERNATIONAL - INTERNATIONAL - A S&P/CITIGROUP
A AT NAV WITH SALES CHARGE EMI GLOBAL EX-US
----------------- ----------------- ----------------
10/16/00 10000 9425 10000
10153 9569 9993
9322 8786 9552
12/31/00 9514 8967 9925
9941 9369 10110
9222 8692 9717
3/31/01 8332 7853 8965
8651 8154 9552
8592 8098 9532
6/30/01 8167 7698 9209
7838 7387 8939
7676 7234 8915
9/30/01 6626 6245 7754
6939 6540 8069
7326 6905 8401
12/31/01 7460 7031 8470
7277 6859 8316
7252 6835 8456
3/31/02 7627 7188 9007
7874 7422 9194
7838 7387 9488
6/30/02 7517 7085 9112
6720 6334 8339
6610 6230 8289
9/30/02 6017 5671 7524
6045 5698 7694
6228 5870 7981
12/31/02 6233 5874 7886
6078 5729 7754
5912 5572 7615
3/31/03 5822 5488 7541
6351 5986 8252
6872 6477 8956
6/30/03 7066 6660 9290
7217 6802 9621
7536 7102 10081
9/30/03 7821 7372 10542
8417 7933 11309
8642 8145 11514
12/31/03 9161 8634 12225
9430 8888 12665
9781 9218 13101
3/31/04 9781 9218 13422
9565 9015 12971
9593 9042 12973
6/30/04 9940 9369 13390
9678 9122 12917
9724 9164 13056
9/30/04 10126 9544 13543
10488 9885 13958
11285 10636 15057
12/31/04 11806 11127 15804
11913 11228 15954
12553 11832 16730
3/31/05 12180 11480 16310
11802 11124 15798
11827 11147 15909
6/30/05 12140 11442 16245
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Anglo Irish Bank (Ireland) 2.1%
SMALL BUSINESS & MIDDLE MARKET BANKING
2.Rhoen-Klinikum (Germany) 1.9%
HOSPITAL MANAGEMENT
3. Vallourec (France) 1.5%
SEAMLESS TUBES
4. Billabong International (Australia) 1.4%
ACTION SPORTS APPAREL BRAND MANAGER
5. Fugro (Netherlands) 1.4%
SURVEY & GPS SERVICES
6. SES Global (France) 1.3%
SATELLITE BROADCASTING SERVICES
7. Neopost (France) 1.3%
POSTAGE METER MACHINES
8. Grafton Group (Ireland) 1.2%
BUILDING MATERIALS, WHOLESALING &
DIY RETAILING
9. Housing Development Finance (India) 1.2%
PREMIER MORTGAGE LENDER IN INDIA
10. Tenaris (Argentina) 1.2%
STEEL PIPE FOR OIL WELLS & PIPELINES
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
13
COLUMBIA ACORN USA
>IN A NUTSHELL
[PHOTO OF ROERT A. MOHN]
Small-cap stocks had a strong second quarter. Columbia Acorn USA rose 5.42%
(Class A shares, without sales charge), slightly more than the small-cap Russell
2000 Index's 4.32% increase. For the first six months of the year, Columbia
Acorn USA was up 5.38%, nicely ahead of the Russell 2000's 1.25% decline.
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.
Industrial stocks stoked the Fund's performance for the quarter. Esco
Technologies was the biggest dollar winner for the Fund, rising 25% on news that
it will likely land a huge contract to install automated electric meter readers.
Cuno, a water filtration company, spiked 39% after announcing it was being
acquired. Many of the Fund's holdings had been attractive to larger corporate
acquirers. Cuno was the fifth company in the Fund to be bought out this year,
joining Western Wireless and Brookstone.
Rising oil prices lifted energy stocks last quarter. Our energy portfolio
was stocked with companies benefiting not only from higher commodity prices, but
also from strong internal production growth. Top holdings Quicksilver Resources,
up 31%, and Southwestern Energy, up 66%, had exciting new drilling prospects in
the Barnet and Fayetteville gas fields.
Other winners for the quarter were cellular tower owner Crown Castle
International, up 27%, and teen retailer Abercrombie & Fitch up 20%.
Our worst-performing group was technology. Software companies Kronos, down
21% and JDA Software Group, off 19%, decreased on weak March-quarter earnings
results. SeaChange International dropped 46% as sales of its video-on-demand
servers fell short. The turnaround at mobile computing and bar-code scanner
company Symbol Technologies has taken longer than hoped, which sent its stock
down 32% for the quarter.
The U.S. stock market has been stuck in a see-saw trading range for the
past 18 months. Flat markets like this one may not make for exciting business
headlines but were just as plentiful with investment opportunities as the good
old Roaring Nineties bull markets.
/s/ Robert A. Mohn
Robert A. Mohn
LEAD PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
The Light burns Bright at
- ----------------------------
Genlyte
The Genlyte Group has been a major winner for Columbia Acorn USA, returning 66%
since its purchase in June 2004. Genlyte is a leading manufacturer of lighting
fixtures and controls and sells product through independent distributors
servicing the architect and designer community. This is a better distribution
channel than the big-box retailers, with customers willing to pay a higher price
for quality design features and service. Although the commercial construction
market has been weak for several years, Genlyte managed to grow earnings by
taking market share away from competitors and improving profitability. We
believe the company's strong market position and the potential for a recovery in
the commercial construction market makes Genlyte a solid investment.
- --------------------------------------------------------------------------------
SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF
LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN
LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE
SUSCEPTIBLE TO MARKET PRESSURE.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: ESCO
TECHNOLOGIES, 2.9%; CUNO, 1.0%; WESTERN WIRELESS, 2.8%; BROOKSTONE, 0.3%;
QUICKSILVER RESOURCES, 2.3%; SOUTHWESTERN ENERGY, 0.5%; CROWN CASTLE
INTERNATIONAL, 2.1%; ABERCROMBIE & Fitch, 2.0%; KRONOS, 1.1%; JDA SOFTWARE
GROUP, 1.1%; SEACHANGE INTERNATIONAL, 0.3%; SYMBOL TECHNOLOGIES, 0.6%; GENLYTE,
1.5%.
1-800-922-6769
14
COLUMBIA ACORN USA TICKER SYMBOL: LAUAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $994.4 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
- --------------------------------------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR 3 YEARS (10/16/2000)
- --------------------------------------------------------------------------------
Returns before NAV 5.38% 15.44% 16.34% 14.78%
taxes POP -0.68 8.80 14.07 13.35
- --------------------------------------------------------------------------------
Returns after taxes NAV 5.15 15.10 16.23 14.66
on distributions POP -0.89 8.48 13.96 13.23
- --------------------------------------------------------------------------------
Returns after taxes NAV 3.79 10.47 14.17 12.95
on distributions and POP -0.17 6.13 12.17 11.67
sale of fund shares
- --------------------------------------------------------------------------------
Russell 2000 (pretax) -1.25 9.45 12.81 7.66
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes.
Investment returns and principal value may fluctuate, resulting in a gain or
loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 18.0%
Health Care 14.2%
Other* 10.2%
Energy/Minerals 11.8%
Industrial Goods/Services 9.7%
Finance 8.7%
Information 27.4%
Software/Services 11.8%
Telecommunications 9.1%
Computer Related Hardware 4.4%
Media 2.1%
* Other includes short-term obligations, cash and other assets less liabilities
of 9.5%.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS A)
- --------------------------------------------------------------------------------
>October 16, 2000 through June 30, 2005
Illustration is based on a hypothetical $50,000 investment from inception in
Class A shares of the Fund, which includes the 4.50% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The Russell 2000 is a
market-weighted index of 2,000 smaller U.S. companies formed by taking the
largest 3,000 U.S. companies and eliminating the largest 1,000. The index is
unmanaged and returns for both the index and the Fund include reinvested
dividends and capital gains. It is not possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $95,752 $92,871 $92,834
------------------------------------------------------
WITH
SALES CHARGE $91,443 $91,871 $92,834
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA ACORN
COLUMBIA ACORN USA - A WITH
USA - A AT NAV SALES CHARGE RUSSELL 2000
-------------- -------------- ------------
10/16/00 50000 47750 50000
52060 49717 51820
49025 46819 46500
12/31/00 53795 51374 50494
57195 54621 53123
57012 54446 49637
3/31/01 55672 53167 47209
62397 59589 50902
65867 62903 52153
6/30/01 67671 64626 53954
68355 65279 51034
66441 63451 49385
9/30/01 56827 54270 42737
56969 54405 45238
60296 57583 48741
12/31/01 63823 60951 51749
64551 61646 51211
62324 59519 49807
3/31/02 67609 64566 53810
68596 65509 54301
64693 61782 51891
6/30/02 60792 58056 49316
52476 50114 41868
51673 49347 41761
9/30/02 47808 45656 38762
50069 47816 40005
54410 51961 43575
12/31/02 51711 49384 41149
50910 48619 40010
50182 47923 38801
3/31/03 50292 48029 39301
55216 52731 43027
60941 58199 47645
6/30/03 61892 59107 48507
64776 61861 51542
68313 65239 53905
9/30/03 66708 63706 52910
73525 70217 57353
75091 71712 59389
12/31/03 75639 72236 60593
79542 75963 63226
79908 76312 63793
3/31/04 79325 75755 64387
77358 73877 61105
80382 76765 62077
6/30/04 82939 79206 64691
77830 74327 60336
76701 73250 60025
9/30/04 79585 76004 62843
81845 78162 64080
87754 83806 69639
12/31/04 90865 86772 71700
89584 85549 68708
91268 87157 69872
3/31/05 90828 86741 67872
87086 83167 63985
91893 87758 68173
6/30/05 95752 91443 70802
- --------------------------------------------------------------------------------
COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Esco Technologies 2.9%
FILTRATION & TEST EQUIPMENT
2. AmeriCredit 2.8%
AUTO LENDING
3. Western Wireless 2.8%
RURAL CELLULAR PHONE SERVICES
4. Edwards Lifesciences 2.5%
HEART VALVES
5. Micros Systems 2.3%
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
6. Quicksilver Resources 2.3%
NATURAL GAS & COAL SEAM GAS PRODUCER
7. ITT Educational Services 2.1%
POSTSECONDARY DEGREE PROGRAMS
8. Crown Castle International 2.1%
COMMUNICATION TOWERS
9. Abercrombie & Fitch 2.0%
TEEN APPAREL RETAILER
10. HCC Insurance Holdings 1.6%
SPECIALTY INSURANCE
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
15
COLUMBIA ACORN INTERNATIONAL SELECT
>IN A NUTSHELL
[PHOTO OF TODD M. NARTER AND CHRISTOPHER J. OLSON]
Columbia Acorn International Select was down 1.00% (Class A shares, without
sales charge) for the quarter, slightly below the S&P/Citigroup World ex-US Cap
Range $2-10B Index's negative return of 0.29%. The Fund was practically in line
with the large-cap MSCI EAFE Index, which declined 1.01%. Most of these negative
returns were due to a strong dollar that offset positively performing local
equity markets. Year-to-date the Fund slightly underperformed the S&P/Citigroup
World ex-U.S. Cap Range $2-10B, posting a 0.44% return compared to the Index's
0.79% return, and was ahead of the MSCI EAFE negative return of 1.17%.
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.
Argentina's Tenaris, a manufacturer of seamless pipes used by oil and gas
producers and the Fund's fourth largest holding, continued its strong
performance as the stock gained a bit over 30% in the second quarter. The stock
was up 65% year-to-date. High oil prices continued to drive energy exploration
and investment, and tight capacity in the seamless pipe industry gave Tenaris
strong pricing power. Another large holding, SES Global, had a good quarter, up
19% due to continued demand for satellite services from the switch to HDTV. The
company also indicated it will launch two new satellites which will increase its
capacity even further. It also reported that it will buy back 10% of its
outstanding shares, which highlights its strong balance sheet and cash flow.
Utilities BKW Energie in Switzerland, a new holding this quarter, and Red
Electrica in Spain were strong performers as well, up 12% and 11%, respectively.
Two of the Fund's weaker performers this quarter were in Japan. Funai
Electronics was down 17% as margins were squeezed by hikes in raw material
prices and there was increasing concern about the impact of a potentially
stronger yen. After a very strong first quarter, Shimano, maker of bicycle
components used by Lance Armstrong among others, gave back 15% as it guided its
estimates down modestly due to a weaker European sales environment.
In addition to BKW Energie, we also added two other new stocks, Gambro,
which manufactures dialyzers and blood collection and separation equipment, and
William Hill, a United Kingdom betting shop and internet gaming operator.
/s/ Todd M. Narter /s/ Christopher J. Olson
Todd M. Narter Christopher J. Olson
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
JUPITER RISING
- -----------------------------------
Jupiter Telecommunications, or JCOM as it's called by the locals, is the largest
cable service provider in Japan. JCOM went public in March 2005, but we were
familiar with it long before then. JCOM is partially owned by Liberty Global,
which has been a long-term holding of the Columbia Acorn Fund. Because fewer
than 10% of the households in Japan have cable TV, JCOM is growing more than 15%
annually. JCOM has finished building the network and is now able to sell a
"triple play" of cable TV, high-speed internet, and telephone service with very
little additional investment required.
- --------------------------------------------------------------------------------
MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS
OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS,
INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT
REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION,
AND CURRENCY EXCHANGE RATE FLUCTUATIONS.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: TENARIS,
4.0%; SES GLOBAL, 3.6%; BKW ENERGIE, 1.0%; RED ELECTRICA, 2.8%; FUNAI ELECTRIC,
1.6%; SHIMANO, 2.7%; GAMBRO, 0.7%; WILLIAM HILL, 1.1%; JUPITER
TELECOMMUNICATIONS, 1.9%.
1-800-922-6769
16
COLUMBIA ACORN INTERNATIONAL SELECT TICKER SYMBOL: LAFAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $71.7 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
-------------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR 3 YEARS (10/16/2000)
-------------------------------------------------------
Returns before NAV 0.44% 15.66% 15.00% 0.44%
taxes POP -5.34 9.01 12.75 -0.82
- --------------------------------------------------------------------------------
Returns after taxes NAV -0.03 15.29 14.91 0.36
on distributions POP -5.78 8.66 12.67 -0.90
- --------------------------------------------------------------------------------
Returns after taxes NAV 0.28 10.34 12.99 0.36
on distributions and POP -3.47 6.01 11.02 -0.71
sale of fund shares
- --------------------------------------------------------------------------------
S&P/Citigroup World 0.79 17.64 17.54 8.94
ex-US $2-10B (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. The return after taxes on distributions may
be higher than the return before taxes due to qualified foreign tax credits.
Indexes do not reflect any deduction for fees, expenses or taxes. Investment
returns and principal value may fluctuate, resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Consumer Goods/Services 20.1%
Finance 15.3%
Other* 10.3%
Information 14.5%
Energy/Minerals 6.7%
Health Care 4.8%
Industrial Goods/Services 28.3%
* Other includes short-term obligations, cash and other assets less liabilities
of 4.3%.
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT
(CLASS A)
- --------------------------------------------------------------------------------
>October 16, 2000 through June 30, 2005
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. S&P/Citigroup World
ex-US $2-10B Index is a subset of Citigroup's Broad Market Index, representing a
mid-cap developed market index excluding the U.S. The index and Fund returns
include reinvested dividends and capital gains. It is not possible to invest
directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $10,207 $9,882 $9,881
------------------------------------------------------
WITH
SALES CHARGE $9,620 $9,687 $9,881
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA ACORN COLUMBIA ACORN
INTERNATIONAL INTERNATIONAL S&P/CITIGROUP
SELECT - A AT SELECT - A WITH WORLD
NAV SALE CHARGE EX-US CAP RANGE
-------------- --------------- ---------------
10/16/00 10000 9425 10000
10344 9749 10020
9023 8504 9607
12/31/00 9684 9127 10015
9994 9420 10114
8848 8339 9716
3/31/01 7662 7222 8948
8063 7600 9587
8041 7578 9564
6/30/01 7700 7257 9220
7296 6877 8978
7143 6732 8949
9/30/01 5938 5597 7799
6313 5950 8121
6660 6277 8429
12/31/01 6859 6465 8443
6506 6132 8250
6427 6057 8404
3/31/02 6655 6272 8950
6859 6464 9131
6927 6528 9472
6/30/02 6711 6325 9130
5989 5645 8332
6097 5746 8274
9/30/02 5654 5329 7521
5642 5318 7661
5779 5447 7938
12/31/02 5819 5484 7828
5535 5217 7651
5302 4997 7527
3/31/03 5348 5040 7467
5848 5511 8201
6353 5988 8898
6/30/03 6393 6026 9200
6496 6122 9508
6774 6385 9950
9/30/03 7024 6620 10411
7547 7113 11161
7706 7263 11348
12/31/03 8212 7739 12033
8359 7879 12449
8717 8216 12842
3/31/04 8774 8269 13166
8592 8098 12787
8598 8104 12832
6/30/04 8824 8317 13281
8620 8124 12763
8614 8118 12854
9/30/04 8978 8462 13290
9240 8709 13708
9820 9256 14783
12/31/04 10162 9578 15492
10088 9508 15677
10629 10018 16415
3/31/05 10310 9717 16071
9963 9390 15561
9969 9396 15656
6/30/05 10207 9620 14973
- --------------------------------------------------------------------------------
COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. Anglo Irish Bank (Ireland) 4.2%
SMALL BUSINESS & MIDDLE MARKET BANKING
2. Exel (United Kingdom) 4.1%
GLOBAL LOGISTICS & FREIGHT FORWARDING
3. Neopost (France) 4.0%
POSTAGE METER MACHINES
4. Tenaris (Argentina) 4.0%
STEEL PIPE FOR OIL WELLS & PIPELINES
5. SES Global (France) 3.6%
SATELLITE BROADCASTING SERVICES
6. Kuehne & Nagel (Switzerland) 3.0%
FREIGHT FORWARDING/LOGISTICS
7. Depfa Bank (Ireland) 2.9%
INTERNATIONAL PUBLIC SECTOR FINANCE
8. Komercni Banka (Czech Republic) 2.9%
LEADING CZECH UNIVERSAL BANK
9. Red Electrica (Spain) 2.8%
SPANISH POWER GRID
10. Swatch Group (Switzerland) 2.7%
WATCH & ELECTRONICS MANUFACTURER
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
17
COLUMBIA ACORN SELECT
>IN A NUTSHELL
[PHOTO OF BEN ANDREWS]
Columbia Acorn Select made up some ground from its weak first quarter. The Fund
was up 5.40% (Class A share, without sales charge) in the second quarter and
gained against its benchmarks. In the second quarter the S&P MidCap 400 Index
was up 4.26% and the S&P 500 Index gained 1.37%. Year-to-date the Fund was down
0.27% versus the S&P 400's gain of 3.85% and the S&P 500's loss of 0.81%.
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.
The Fund's biggest percentage winner for the quarter was Mine Safety
Appliances (MSA), up 27% as strong demand for combat helmets from the U.S. army
drove higher than expected earnings. The stock was a new purchase this quarter.
MSA manufactures products designed to protect the safety and health of workers
worldwide. Seven other stocks posted returns from 15% to 22% in the quarter.
On the down side Harley-Davidson lost 14% in the quarter. Harley cut
production and its earnings forecast and sales slowed for its heavy-weight
bikes. We believe this hiccup will be overcome in the next several quarters.
In addition to MSA, there were five new companies added to the portfolio
during the quarter (Conseco, Nuveen Investments, Spartech, Tribune Company, and
Worthington Industries) while three were sold (McAfee, Moodys, and Synopsys). We
also lost a fourth company when Liberty Media International purchased United
Global Communications. The combined company is now called Liberty Global and
remains in the portfolio.
We continue to search for the best risk/return investments for the Fund.
As always, we appreciate your investment in Columbia Acorn Select.
/s/Ben Andrews
Ben Andrews
LEAD PORTFOLIO MANAGER
- --------------------------------------------------------------------------------
THE GAS GRILL GOURMET
- -----------------------------------
Worthington Industries is a steel processor and manufacturer of metal products
such as pressure cylinders (Gas grill propane tanks) and metal framing used in
commercial construction. Since 2000, Worthington has improved its manufacturing
processes, sold underperforming businesses and made accretive acquisitions.
Recent performance has been weak, as falling steel prices have hurt short-term
profits due to losses on inventory held. However, unlike the steel mills,
Worthington's long-term success is tied to volume growth rather than steel
prices. We like Worthington's prospects due to its strong market position,
reasonable valuation and opportunity for growth as the industry adopts metal
framing for residential construction. While waiting for the market to recognize
its value, we continue to collect a 4% dividend.
- --------------------------------------------------------------------------------
COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS
HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE
FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND
TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES.
AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: MINE SAFETY
APPLIANCES, 2.6%; HARLEY-DAVIDSON, 3.4%; CONSECO, 2.6%; NUVEEN INVESTMENTS,
2.4%; SPARTECH, 0.2%; TRIBUNE COMPANY, 1.1%; WORTHINGTON INDUSTRIES, 2.1%;
MCAFEE, 0.0%; MOODYS, 0.0%; SYNOPSYS, 0.0%; LIBERTY MEDIA INTERNATIONAL, 0.0%;
UNITED GLOBAL COMMUNICATIONS, 0.0%; LIBERTY GLOBAL, 2.8%.
1-800-922-6769
18
COLUMBIA ACORN SELECT TICKER SYMBOL: LTFAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $1,510.5 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
-------------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR 3 YEARS (10/16/2000)
-------------------------------------------------------
Returns before NAV -0.27% 9.96% 14.05% 10.63%
taxes POP -6.00 3.64 11.82 9.24
- --------------------------------------------------------------------------------
Returns after taxes NAV -0.34 9.54 13.86 10.44
on distributions POP -6.07 3.24 11.64 9.06
- --------------------------------------------------------------------------------
Returns after taxes NAV -0.09 7.02 12.14 9.21
on distributions and POP -3.82 2.88 10.18 7.99
sale of fund shares
- --------------------------------------------------------------------------------
S&P MidCap 3.85 14.03 13.16 8.05
400 (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Information 26.3%
Other* 9.4%
Finance 17.1%
Industrial Goods/Services 8.7%
Health Care 5.0%
Energy/Minerals 4.1%
Consumer Goods/Services 29.4%
* Other includes short-term obligations, cash and other assets less
liabilities of 9.4%.
THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS A)
- --------------------------------------------------------------------------------
>October 16, 2000 through June 30, 2005
Illustration is based on a hypothetical $50,000 investment from inception in
Class A shares of the Fund, which includes the 4.50% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The S&P MidCap 400 is a
broad, market-weighted index of 400 stocks that are in the next size/tier down
from the S&P 500. The Index is unmanaged and returns for both the index and the
Fund include reinvested dividends and capital gains. It is not possible to
invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $80,470 $77,933 $77,894
------------------------------------------------------
WITH
SALES CHARGE $76,849 $76,933 $77,894
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA ACORN
COLUMBIA SELECT SELECT - A
ACORN - A WITH SALES
AT NAV CHARGE S&P MIDCAP 400
--------------- -------------- --------------
10/16/00 50000 47750 50000
54790 52324 51725
49470 47244 47820
12/31/00 53160 50768 51478
54702 52240 52626
51502 49184 49621
3/31/01 49468 47242 45934
53044 50657 51001
55940 53423 52189
6/30/01 55001 52526 51980
54473 52021 51206
51912 49576 49531
9/30/01 48715 46522 43370
49733 47495 45287
54890 52420 48656
12/31/01 57228 54653 51171
56095 53571 50905
54889 52419 50966
3/31/02 56777 54222 54611
53683 51267 54354
55191 52708 53435
6/30/02 54248 51807 49524
50814 48527 44720
52023 49682 44948
9/30/02 49609 47377 41325
52328 49973 43115
54929 52457 45611
12/31/02 52550 50185 43736
52324 49970 42459
52397 50040 41449
3/31/03 53456 51050 41797
56514 53970 44831
59531 56852 48548
6/30/03 61079 58331 49164
63987 61107 50910
66629 63631 53221
9/30/03 65157 62225 52407
67535 64496 56369
67008 63993 58330
12/31/03 68295 65221 59316
70152 66995 60603
71934 68697 62058
3/31/04 71898 68663 62318
69777 66637 60274
70915 67723 61522
6/30/04 73191 69897 62925
70007 66857 59986
69398 66275 59830
9/30/04 70918 67727 61601
73684 70368 62587
78193 74674 66311
12/31/04 80695 77064 69089
77871 74367 67327
76789 73333 69583
3/31/05 76366 72930 68810
73617 70304 66134
77180 73707 70115
6/30/05 80470 76849 72019
- --------------------------------------------------------------------------------
COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------
1. ITT Educational Services 5.5%
POSTSECONDARY DEGREE PROGRAMS
2. Tellabs 5.1%
TELECOMMUNICATIONS EQUIPMENT
3. Safeway 4.5%
RETAIL FOOD & DRUG STORES
4. Abercrombie & Fitch 4.4%
TEEN APPAREL RETAILER
5. Harley-Davidson 3.4%
MOTORCYCLES & RELATED MERCHANDISE
6. TCF Financial 3.4%
GREAT LAKES BANK
7. American Tower 3.3%
COMMUNICATION TOWERS IN USA & MEXICO
8. Pride International 3.2%
OFFSHORE DRILLING CONTRACTOR
9. Coach 3.1%
DESIGNER & RETAILER OF BRANDED
LEATHER ACCESSORIES
10. Liberty Global 2.8%
CATV HOLDING COMPANY
The Fund's top 10 holdings and portfolio diversification vary with changes in
portfolio investments. See the Statement of Investments for a complete list of
the Fund's holdings.
- --------------------------------------------------------------------------------
19
COLUMBIA THERMOSTAT FUND
>IN A NUTSHELL
[PHOTO OF RALPH WANGER AND CHARLES P. MCQUAID]
Columbia Thermostat Fund was up 2.54% (Class A shares, without sales charge) for
the quarter and ended the six months up 1.37%. These returns were better than
the Lipper Flexible Portfolio Funds Index and easily outperformed the S&P 500
Index, and were close to the Lehman Brothers U.S. Credit Intermediate Bond Index
over the same time periods. (See page 4 for results). 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.
RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND
EQUITIES
WEIGHTINGS 2ND SIX-MONTH
IN QUARTER RETURNS TO
CATEGORY RETURNS 6/30/05
- --------------------------------------------------------------------------------
Columbia 21% 4.07% 2.78%
Acorn Fund
- --------------------------------------------------------------------------------
Columbia 15% 5.45% -0.14%
Acorn Select
- --------------------------------------------------------------------------------
Columbia Growth 24% -0.58% -4.32%
Stock Fund
- --------------------------------------------------------------------------------
Columbia Growth 25% 0.61% 0.55%
& Income Fund
- --------------------------------------------------------------------------------
Columbia Mid Cap 15% 2.78% 3.74%
Value Fund
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE
EQUITY RETURN 100% 2.08% 0.16%
- --------------------------------------------------------------------------------
FIXED INCOME
WEIGHTINGS 2ND SIX-MONTH
IN QUARTER RETURNS TO
CATEGORY RETURNS 6/30/05
- --------------------------------------------------------------------------------
Columbia Federal 30% 3.04% 2.74%
Securities Fund
- --------------------------------------------------------------------------------
Columbia 50% 2.65% 2.18%
Intermediate
Bond Fund
- --------------------------------------------------------------------------------
Columbia High 20% 3.02% 1.18%
Yield Fund
- --------------------------------------------------------------------------------
Weighted Average 100% 2.84% 2.15%
Income Return
- --------------------------------------------------------------------------------
WEIGHTED AVERAGE
EQUITY RETURN 100% 2.08% 0.16%
- --------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND
REBALANCING IN THE SECOND QUARTER
- --------------------------------------------------------------------------------
APRIL 14, 2005: 50% stock, 50% bond
MAY 18, 2005: 45% stock, 55% bond
JUNE 1, 2005: 40% stock, 60% bond
- --------------------------------------------------------------------------------
The first six-months of 2005 favored the Fund's small- and mid-cap stock
funds, with the Columbia Mid Cap Value Fund delivering the best performance with
a 3.74% return for the six-month period and 2.78% return for the quarter.
Columbia Acorn Fund also contributed to performance delivering a 2.78% return
year-to-date and a 4.07% return for the quarter. Despite the good performance
from the small- and mid-cap funds, the equity portion was hurt by the negative
year-to-date 4.32% return of Columbia Growth Stock Fund and its 0.58% loss for
the quarter. Overall, Thermostat's bond portfolio, up 2.15%, outperformed the
equity portion's return of 0.16%.
As noted in the table below, the Fund had three reallocation triggers
during the second quarter. We increased stock exposure in the portfolio in
April. In May and June we increased the portfolio's bond exposure.
Assets in Columbia Thermostat were just over $206 million at the end of
the first half of 2005. With the Fund's third anniversary approaching on
September 25, we have been pleased with the Fund's low-risk result and steady
inflows. The Fund has performed as expected in the broad trading-range market we
have experienced since its inception. We continue to believe Columbia
Thermostat's investment strategy should keep a portion of your portfolio at an
even temperature despite ongoing market volatility.
/s/ Ralph Wanger /s/ Charles P. McQuaid
Ralph Wanger Charles P. McQuaid
CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER
THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF
THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG
THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING
STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS
DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY
ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL- AND MID-CAP STOCKS
MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE
VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN
INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED
BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO
THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND
PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A
FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY
AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER
TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE
SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN.
1-800-922-6769
20
COLUMBIA THERMOSTAT FUND TICKER SYMBOL: CTFAX
>AT A GLANCE TOTAL NET ASSETS OF THE FUND: $206.3 MILLION
PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE
RETURNS)
- --------------------------------------------------------------------------------
>through June 30, 2005
----------------------------------------------------
YEAR TO LIFE OF FUND
DATE* 1 YEAR (3/3/2003)
----------------------------------------------------
Returns before taxes NAV 1.37% 7.54% 14.05%
POP -4.46 1.36 11.19
- --------------------------------------------------------------------------------
Returns after taxes NAV 0.85 6.29 13.30
on distributions POP -4.95 0.18 10.46
- --------------------------------------------------------------------------------
Returns after taxes NAV 1.03 5.09 11.70
on distributions and POP -2.77 1.06 9.23
sale of fund shares
- --------------------------------------------------------------------------------
S&P 500 (pretax) -0.81 6.32 18.14
- --------------------------------------------------------------------------------
Lehman U.S. Credit 1.56 5.79 4.47
Intermediate Bond
Index (pretax)
- --------------------------------------------------------------------------------
Lipper Flexible Portfolio -0.36 6.70 14.78
Funds Index (pretax)
- --------------------------------------------------------------------------------
Past performance, before and after taxes, cannot predict future investment
results. After-tax returns are calculated using the highest historical
individual federal marginal income tax rates, and do not reflect the impact of
state and local taxes. Returns after taxes on distributions and sale of fund
shares reflect the additional tax impact of long-term gains or losses realized
when fund shares are sold. The returns are taxed at the maximum rate and assume
shares were purchased at the beginning of the period. Actual after-tax returns
depend on the investor's tax situation and may differ from those shown.
After-tax returns are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or individual retirement
accounts. After-tax returns are shown for Class A shares only; after-tax returns
for other share classes will vary. Indexes do not reflect any deduction for
fees, expenses or taxes. Investment returns and principal value may fluctuate,
resulting in a gain or loss on sale.
PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75%
FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES
OR CONTINGENT DEFERRED SALES CHARGES (CDSC).
* Year to date data not annualized.
COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS
- --------------------------------------------------------------------------------
>as a % of assets in each investment category, as of June 30, 2005
[PIE CHART]
STOCK MUTUAL FUNDS
Columbia Acorn Fund 21%
Columbia Acorn Select 15%
Columbia Growth Stock Fund 24%
Columbia Growth & Income Fund 25%
Columbia Mid-Cap Value Fund 15%
[PIE CHART]
BOND MUTUAL FUNDS
Columbia Federal Securities Fund 30%
Columbia Intermediate Bond Fund 50%
Columbia High Yield Fund 20%
THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS A)
- --------------------------------------------------------------------------------
>March 3, 2003 through June 30, 2005
Illustration is based on a hypothetical $10,000 investment from inception in
Class A shares of the Fund, which includes the 5.75% maximum initial sales
charge. Performance may reflect any voluntary waiver or reimbursement of Fund
expenses by the Adviser or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. The S&P 500 is a broad,
market-weighted average of U.S. blue-chip company stock performance. The Lehman
U.S. Credit Intermediate Bond Index is the intermediate component of the U.S.
Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and
foreign debentures and secured notes that meet specified maturity, liquidity,
and quality requirements. The Lipper Flexible Portfolio Funds Index is an equal
dollar weighted index of the 30 largest mutual funds within the Flexible
Portfolio fund classification, as defined by Lipper. The Indexes are unmanaged
and returns for the indexes and the Fund include reinvested dividends and
capital gains. It is not possible to invest directly in an index.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE
CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END
UPDATES.
------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------
WITHOUT
SALES CHARGE $13,591 $13,380 $13,363
------------------------------------------------------
WITH
SALES CHARGE $12,810 $13,080 $13,363
------------------------------------------------------
[MOUNTAIN CHART]
COLUMBIA COLUMBIA LEHMAN U.S. LIPPER
THERMOSTAT THERMOSTAT CREDIT FLEXIBLE
FUND - A AT FUND - A WITH INTERMEDIATE PORTFOLIO
NAV SALES CHARGE S&P 500 BOND INDEX FUNDS INDEX
----------- ------------- ------- ------------ -----------
3/3/03 10000 9425 10000 10000 10000
3/31/03 10089 9509 10097 10021 10065
10604 9994 10929 10158 10640
11079 10442 11505 10418 11163
6/30/03 11225 10579 11651 10423 11277
11284 10636 11857 10104 11330
11512 10850 12088 10134 11562
9/30/03 11482 10822 11960 10436 11572
11868 11186 12636 10343 12027
12007 11317 12747 10374 12154
12/31/03 12308 11601 13416 10477 12643
12478 11761 13662 10561 12825
12618 11892 13852 10678 12998
3/31/04 12658 11931 13643 10773 12943
12398 11685 13429 10498 12618
12437 11722 13613 10431 12706
6/30/04 12635 11909 13878 10469 12929
12444 11729 13419 10576 12583
12514 11794 13473 10781 12643
9/30/04 12674 11945 13619 10821 12848
12885 12144 13827 10904 13024
13185 12427 14386 10808 13489
12/31/04 13408 12637 14876 10905 13845
13315 12549 14513 10936 13624
13427 12655 14819 10878 13881
3/31/05 13254 12492 14556 10777 13634
13131 12376 14280 10896 13385
13447 12674 14735 11011 13694
6/30/05 13591 12810 14756 11075 13795
- --------------------------------------------------------------------------------
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION
- --------------------------------------------------------------------------------
>as a % of net assets, as of June 30, 2005
[PIE CHART]
Stock Mutual Funds 39.9%
Bond Mutual Funds 59.9%
Cash and other Assets less Liabilities 0.2%
- --------------------------------------------------------------------------------
21
COLUMBIA ACORN FUND
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
INFORMATION
Advantech (Taiwan) 7,416,000 9,300,000
American Tower 3,000,000 3,500,000
Amis Holdings 0 1,071,000
ASE Test (Taiwan) 1,410,100 2,101,700
Cnet Networks 0 1,135,000
Crown Castle International 4,000,000 4,500,000
CTS 1,626,000 1,870,000
Diebold 0 375,000
Fair Isaac 1,110,000 1,316,000
Littelfuse 785,000 915,000
Navigant Consulting 1,336,000 1,836,000
Navteq 0 500,000
Novatek Microelectronics (Taiwan) 0 2,600,000
Outdoor Channel 0 460,000
RSA Security 2,000,000 3,000,000
SSA Global Technologies 0 928,000
Tellabs 9,300,000 9,540,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Aeropostale 2,265,000 2,300,000
Ann Taylor 1,093,000 1,223,000
Chico's FAS 4,990,000 5,090,000
Coinstar 1,290,000 1,440,000
Four Seasons Hotels (Canada) 0 314,000
Genesco 700,000 775,000
Knoll 777,000 1,384,000
Paddy Power (Ireland) 0 650,000
Petco Animal Supplies 1,245,000 1,445,000
Polaris Industries 550,000 850,000
Prestige Brands 350,000 657,000
Shimano (Japan) 610,000 780,000
Speedway Motorsports 553,000 933,000
Sports Authority 1,480,000 1,520,000
Vail Resorts 1,635,000 2,110,000
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Aalberts Industrie
(Netherlands) 740,000 755,000
Administaff 1,150,000 1,300,000
Carbone Lorraine (France) 200,000 260,000
Drew Industries 0 390,000
Forward Air 1,500,000 2,000,000
(INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT)
Gardner Denver 785,000 1,140,000
Genlyte Group 1,528,000 1,600,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Hexagon (Sweden) 30,000 120,000
(INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT)
Kaydon 553,000 1,100,000
Mine Safety Appliances 1,300,000 1,440,000
Nordson 600,000 1,297,000
Quanta Services 1,700,000 2,481,000
Simpson 1,200,000 1,450,000
Spartech 3,000,000 3,150,000
Ultrapar (Brazil) 0 750,000,000
United Services Group
(Netherlands) 675,000 740,000
Worthington Industries 1,050,000 1,700,000
- ----------------------------------------------------------------------------
FINANCE
Assurant 0 715,000
Independent Bank 152,000 252,000
Nuveen Investments 965,000 1,290,000
Paragon Group (United Kingdom) 0 1,950,000
Provident Bancorp 160,000 360,000
Scottish Re Group 1,250,000 1,500,000
United America Indemnity 700,000 1,300,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 2,300,000 2,350,000
Fugro (Netherlands) 0 1,365,000
(INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT)
McMoran Exploration 1,100,000 1,200,000
Pride International 2,100,000 2,300,000
Sociedad Quimica Y Minera
de Chile (Chile) 32,800 275,000
Tipperary 2,265,000 2,320,000
Veritas DGC 374,000 700,000
Western Gas 3,000,000 3,200,000
1-800-922-6769
22
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
ADDITIONS (CONTINUED)
- ----------------------------------------------------------------------------
HEALTH CARE
Advanced Medical Optics 0 552,000
Arrow International 655,000 851,000
Cytokinetics 0 705,000
CYTYC 861,000 1,150,000
Datascope 0 261,000
Decode Genetics 0 1,900,000
Dendrite International 1,333,000 2,033,000
Exelixis 888,000 2,000,000
Intermagnetics General 750,000 1,180,000
Lexicon Genetics 2,000,000 3,100,000
Martek Biosciences 519,000 900,000
NPS Pharmaceuticals 776,000 1,176,000
Rigel Pharmaceuticals 0 675,000
Seattle Genetics 0 2,300,000
Serologicals 700,000 1,200,000
Tanox 0 1,500,000
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Diamondrock Hospitality 1,000,000 1,303,000
Gaylord Entertainment 0 475,000
Heartland Express 980,000 1,500,000
Kite Realty Group 0 717,000
SALES
- ----------------------------------------------------------------------------
INFORMATION
3Com 2,900,000 0
Corus Entertainment (Canada) 710,000 0
FTI Consulting 1,000,000 162,000
Global Payments 1,432,000 1,407,000
Insight Communications 2,700,000 2,430,000
International Game Technology 6,700,000 6,000,000
MAPICS 2,200,000 0
McAfee 1,448,000 0
Pericom Semiconductor 521,000 68,000
Radiant Systems 1,575,000 1,542,000
Trimble Navigation 1,200,000 1,000,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
AFC Enterprises 2,000,000 1,700,000
Amer Sports 1,110,000 0
Autogrill (Italy) 1,447,000 0
Esprit Holdings (Hong Kong) 2,250,000 0
Hunter Douglas (Netherlands) 248,000 0
Kappa Create (Japan) 388,000 366,000
Masonite International (Canada) 465,000 0
Monaco Coach 1,000,000 762,000
SCP Pool 1,989,000 1,689,000
Station Casinos 890,000 745,000
Wacoal (Japan) 1,000,000 789,000
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
SALES (CONTINUED)
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Cobham (United Kingdom) 500,000 0
Dominion Homes 572,000 0
Hub Group 304,000 0
Schulman 1,000,000 336,000
- ----------------------------------------------------------------------------
FINANCE
Anglo Irish Bank (Ireland) 6,657,588 6,243,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
BankFirst 19,000 0
Credito Emiliano (Italy) 1,000,000 0
Cullen Frost Bankers 370,000 0
Den Norske Bank (Norway) 2,150,000 1,670,000
FirstFed Financial 76,000 0
Midwest Bank 170,000 18,000
Stewart Information Services 340,000 0
Texas Regional Bancshares 1,190,000 0
Washington Federal 1,605,000 1,285,000
World Acceptance 1,820,000 1,700,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Equitable Resources 1,600,000 1,200,000
Hanover Compressor 1,200,000 0
Petrokazakhstan (Canada) 680,000 662,800
Quicksilver Resources 700,000 0
XTO Energy 9,000,000 5,000,000
- ----------------------------------------------------------------------------
HEALTH CARE
Ciphergen Biosystems 1,708,000 0
CTI Molecular Imaging 1,900,000 0
Myriad Genetics 460,000 0
SYRRX, Series C 461,000 0
VISX 1,000,000 0
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Allied Waste Industries 2,500,000 0
23
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 92.4%
- ----------------------------------------------------------------------------
INFORMATION: 21.9%
SOFTWARE/SERVICES
>BUSINESS SOFTWARE: 3.6%
1,900,000 Micros Systems (b) $ 85,025
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
11,500,000 Novell (b) 71,300
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
1,478,000 Kronos (b) 59,696
LABOR MANAGEMENT SOLUTIONS
847,000 Avid Technology (b) 45,128
DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS
3,448,000 Aspect Communications (b)(c) 38,721
CALL CENTER SOFTWARE
2,000,000 MRO Software (b)(c) 29,220
ENTERPRISE MAINTENANCE SOFTWARE
1,521,000 Sybase (b) 27,910
DATABASE SOFTWARE
2,200,000 JDA Software Group (b)(c) 25,036
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
1,300,000 Witness Systems (b) 23,699
CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE
6,700,000 E.Piphany (b)(c) 23,316
CRM SOFTWARE
1,542,000 Radiant Systems (b)(c) 17,579
POINT OF SALE SYSTEMS FOR CONVENIENCE STORES
460,000 Maximus 16,233
OUTSOURCER FOR LOCAL GOVERNMENT
3,000,000 Lawson Software (b) 15,450
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
5,000,000 Indus International (b)(c) 12,300
600,000 Indus International (b)(c) 1,476
ENTERPRISE ASSET MANAGEMENT SOFTWARE
6,000,000 Actuate (b)(c) 11,220
INFORMATION DELIVERY SOFTWARE & SOLUTIONS
928,000 SSA Global Technologies (b) 11,136
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
1,250,000 ClickSoftware Technologies (b) 2,338
SERVICE CHAIN OPTIMIZATION SOFTWARE
- ----------------------------------------------------------------------------
516,783
>BUSINESS INFORMATION/BUSINESS
SERVICES/ PUBLISHING: 1.8%
1,200,000 Getty Images (b) 89,112
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
1,316,000 Fair Isaac 48,034
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
1,836,000 Navigant Consulting (b) 32,424
FINANCIAL CONSULTING FIRM
2,685,000 InfoUSA (c) 31,415
BUSINESS DATA FOR SALES LEADS
1,395,000 Ceridian (b) 27,175
HR SERVICES & PAYMENT PROCESSING
500,000 Navteq (b) 18,590
MAP DATA FOR ELECTRONIC DEVICES
350,000 Dex Media 8,544
YELLOW PAGES PUBLISHER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,700,000 PRIMEDIA (b) $ 6,885
SPECIALTY MAGAZINES & OTHER PUBLICATIONS
162,000 FTI Consulting (b) 3,386
FINANCIAL CONSULTING FIRM
- ----------------------------------------------------------------------------
265,565
>TRANSACTION PROCESSORS: 1.0%
1,407,000 Global Payments 95,395
CREDIT CARD PROCESSOR
9,000,000 Hong Kong Exchanges & Clearing
(Hong Kong) 23,312
HONG KONG EQUITY & DERIVATIVES OPERATOR
1,250,000 Pegasus Systems (b)(c) 13,938
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
600,000 Cubic 10,644
REVENUE COLLECTION & DEFENSE SYSTEMS
- ----------------------------------------------------------------------------
143,289
>ELECTRONICS DISTRIBUTION: 0.9%
2,325,000 Avnet (b) 52,382
ELECTRONIC COMPONENTS DISTRIBUTION
730,000 CDW 41,676
TECHNOLOGY RESELLER
680,000 Tech Data (b) 24,895
I/T DISTRIBUTOR
710,000 Agilysys 11,147
I/T DISTRIBUTOR
- ----------------------------------------------------------------------------
130,100
>INTERNET: 0.8%
3,000,000 RSA Security (b) 34,440
ENTERPRISE SECURITY SOFTWARE
9,500,000 Skillsoft Publishing (b)(c) 32,775
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
2,000,000 ValueClick (b) 24,660
INTERNET ADVERTISING
1,135,000 Cnet Networks (b) 13,325
INTERNET ADVERTISING ON NICHE WEBSITES
1,400,000 DoubleClick (b) 11,746
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
1,879,808 Vital Stream, Cl. C (b) 1,352
STREAMING SERVICES FOR THE INTERNET
- ----------------------------------------------------------------------------
118,298
>COMPUTER SERVICES: 0.6%
4,000,000 Bearing Point (b) 29,320
BUSINESS CONSULTING & TECHNOLOGY STRATEGY
5,000,000 Igate Capital (b)(c) 17,900
I/T & BPO OUTSOURCING SERVICES
4,600,000 AnswerThink Consulting (b)(c) 16,330
I/T INTEGRATION & BEST PRACTICE RESEARCH
2,000,000 Ciber (b) 15,960
SOFTWARE SERVICES & STAFFING
2,300,000 Analysts International (b)(c) 7,866
TECHNOLOGY STAFFING SERVICES
1,025,000 New Horizons Worldwide (b)(c) 3,587
COMPUTER TRAINING SERVICES
- ----------------------------------------------------------------------------
90,963
1-800-922-6769
24
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONSUMER SOFTWARE: 0.3%
1,333,000 Activision (b) $ 22,021
ENTERTAINMENT SOFTWARE
700,000 THQ (b) 20,489
ENTERTAINMENT SOFTWARE
- ----------------------------------------------------------------------------
42,510
COMPUTER RELATED HARDWARE
>COMPUTER HARDWARE/RELATED SYSTEMS: 2.4%
1,525,000 Unova (b) 40,611
BARCODE & WIRELESS LAN SYSTEMS
371,900 Neopost (France) 32,686
POSTAGE METER MACHINES
1,070,000 Avocent (b) 27,970
COMPUTER CONTROL SWITCHES
660,000 Rogers (b) 26,763
PCB LAMINATES & HIGH PERFORMANCE FOAMS
1,173,000 Belden CDT 24,868
SPECIALTY CABLE
1,870,000 CTS (c) 22,982
ELECTRONIC COMPONENTS, SENSORS & EMS
9,300,000 Advantech (Taiwan) 21,919
EMBEDDED COMPUTERS
2,100,000 Symbol Technologies 20,727
MOBILE COMPUTERS & BARCODE SCANNERS
1,070,000 II VI (b) 19,677
LASER COMPONENTS
230,000 Wincor Nixdorf (Germany) 18,791
RETAIL POS SYSTEMS & ATM MACHINES
400,000 Zebra Technologies (b) 17,516
BAR CODE PRINTERS
375,000 Diebold 16,916
AUTOMATED TELLER MACHINES
625,000 Excel Technologies (b)(c) 15,188
LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS
1,875,000 SeaChange International (b)(c) 13,163
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
480,000 Applied Films (b) 12,288
THIN-FILM GLASS COATING EQUIPMENT
5,000,000 Concurrent Computer (b)(c) 10,650
VIDEO ON DEMAND SYSTEMS & SERVICES
6,800,000 Phoenixtec Power (Taiwan) 7,295
UNINTERRUPTIBLE POWER SUPPLIES
- ----------------------------------------------------------------------------
350,010
>SEMICONDUCTORS/RELATED EQUIPMENT: 1.4%
1,510,000 Integrated Circuit Systems (b) 31,166
SILICON TIMING DEVICES
1,835,000 Semtech (b) 30,553
ANALOG SEMICONDUCTORS
1,905,000 IXYS (b)(c) 27,013
POWER SEMICONDUCTORS
915,000 Littelfuse (b) 25,483
LITTLE FUSES
2,000,000 Entegris (b) 19,800
SEMICONDUCTOR WAFER SHIPPING & HANDLING PRODUCTS
1,071,000 Amis Holdings (b) 14,287
ANALOG & MIXED: SIGNAL SEMICONDUCTORS
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
10,000,000 Sunplus Technology (Taiwan) $ 13,997
FABLESS SEMICONDUCTOR DESIGNER
2,101,700 ASE Test (Taiwan) (b) 13,535
SEMICONDUCTOR PACKAGING & TEST SERVICES
2,600,000 Novatek Microelectronics (Taiwan) 11,055
LCD RELATED IC DESIGNER
565,000 Supertex (b) 9,978
MIXED-SIGNAL SEMICONDUCTORS
361,000 Actel (b) 5,018
FIELD PROGRAMMABLE GATE ARRAYS
68,000 Pericom Semiconductor (b) 554
INTERFACE INTEGRATED CIRCUITS
- ----------------------------------------------------------------------------
202,439
>GAMING EQUIPMENT: 1.4%
6,000,000 International Game Technology 168,900
SLOT MACHINES & PROGRESSIVE JACKPOTS
1,050,000 Shuffle Master (b) 29,432
CARD SHUFFLERS & CASINO GAMES
- ----------------------------------------------------------------------------
198,332
>INSTRUMENTATION: 0.9%
1,000,000 Trimble Navigation (b) 38,970
GPS-BASED INSTRUMENTS
711,000 Dionex (b) 31,007
ION & LIQUID CHROMATOGRAPHY
600,000 Mettler Toledo (b) 27,948
LABORATORY EQUIPMENT
2,300,000 Spectris (United Kingdom) 20,346
ELECTRONIC INSTRUMENTATION & CONTROLS
428,000 Varian (b) 16,174
ANALYTICAL INSTRUMENTS
- ----------------------------------------------------------------------------
134,445
>CONTRACT MANUFACTURING: 0.5%
1,855,000 Jabil Circuit (b) 57,004
ELECTRONIC MANUFACTURING SERVICES
1,536,000 Plexus (b) 21,857
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
78,861
TELECOMMUNICATIONS
>TELECOMMUNICATION SERVICES: 2.7%
3,000,000 Western Wireless (b) 126,900
RURAL CELLULAR PHONE SERVICES
4,500,000 Crown Castle International (b) 91,440
COMMUNICATION TOWERS
3,500,000 American Tower (b) 73,570
COMMUNICATION TOWERS IN USA & MEXICO
800,000 Commonwealth Telephone 33,528
RURAL PHONE FRANCHISES & CLEC
780,000 Telephone & Data Systems 31,832
780,000 Telephone & Data Systems, Cl. S 29,905
CELLULAR & TELEPHONE SERVICES
- ----------------------------------------------------------------------------
387,175
>TELECOMMUNICATIONS EQUIPMENT: 1.2%
9,540,000 Tellabs (b) 82,998
TELECOMMUNICATIONS EQUIPMENT
2,750,000 Andrew (b) 35,090
WIRELESS INFRASTRUCTURE EQUIPMENT
25
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TELECOMMUNICATIONS EQUIPMENT--CONTINUED
960,000 Plantronics $ 34,906
COMMUNICATION HEADSETS
1,510,000 Symmetricom (b) 15,659
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
168,653
MEDIA
>TELEVISION PROGRAMMING/CATV: 1.3%
1,700,000 Liberty Global (formerly known as
Liberty Media International) (b) 79,339
CATV HOLDING COMPANY
35,506 Jupiter Telecommunications (Japan) (b) 29,835
LARGEST CABLE SERVICE PROVIDER IN JAPAN
2,430,000 Insight Communications (b) 26,852
CATV FRANCHISES IN MIDWEST
2,605,000 Liberty Media (b) 26,545
CATV PROGRAMMING & MEDIA COMPANY HOLDINGS
1,250,000 Mediacom Communications (b) 8,588
CABLE TELEVISION FRANCHISES
333,000 Alliance Atlantis Communication (b)
(Canada) 7,814
CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION
460,000 Outdoor Channel (b) 6,330
CABLE TELEVISION PROGRAMMING
- ----------------------------------------------------------------------------
185,303
>TV/SATELLITE BROADCASTING: 0.7%
3,307,000 SES Global (France) 49,778
SATELLITE BROADCASTING SERVICES
1,750,000 Gray Television 21,105
MID MARKET AFFILIATED TV STATIONS
2,200,000 Entravision Communications (b) 17,138
SPANISH LANGUAGE TV, RADIO & OUTDOOR
270,000 Metropole TV (France) 6,840
TELEVISION BROADCASTER
200,000 Young Broadcasting (b) 830
TELEVISION STATIONS
- ----------------------------------------------------------------------------
95,691
>RADIO BROADCASTING: 0.4%
1,291,000 Salem Communications (b) 25,613
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
1,200,000 Cumulus Media, Cl. A (b) 14,136
RADIO STATIONS IN SMALL CITIES
992,000 Saga Communications (b) 13,888
RADIO STATIONS IN SMALL & MID-SIZED CITIES
1,200,000 Spanish Broadcasting (b) 11,988
SPANISH LANGUAGE RADIO STATIONS
- ----------------------------------------------------------------------------
65,625
-----------
INFORMATION: TOTAL 3,174,042
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 21.0%
SERVICES
>RETAIL: 6.8%
5,090,000 Chico's FAS (b) 174,485
WOMEN'S SPECIALTY RETAILER
3,200,000 Michaels Stores 132,384
CRAFT & HOBBY SPECIALTY RETAILER
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
1,245,000 Abercrombie & Fitch $ 85,531
TEEN APPAREL RETAILER
2,300,000 Aeropostale (b) 77,280
MALL BASED TEEN RETAILER
3,743,000 Christopher & Banks (c) 68,347
WOMEN'S APPAREL RETAILER
1,400,000 Williams Sonoma (b) 55,398
HOME GOODS & FURNISHING RETAILER
1,520,000 Sports Authority (b)(c) 48,336
SPORTING GOODS STORES
826,000 Urban Outfitters (b) 46,826
APPAREL & HOME SPECIALTY RETAILER
1,445,000 Petco Animal Supplies (b) 42,367
PET SUPPLIES & SERVICES
1,072,000 Zale (b) 33,972
SPECIALTY RETAILER OF JEWELRY
1,300,000 Borders Group 32,903
BOOKSTORES
1,223,000 Ann Taylor (b) 29,694
WOMEN'S APPAREL RETAILER
775,000 Genesco (b) 28,745
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
230,000 Whole Foods Market 27,209
NATURAL FOOD SUPERMARKETS
1,370,000 Hot Topic (b) 26,194
MUSIC INSPIRED RETAILER OF APPAREL,
ACCESSORIES & GIFTS
958,000 Brookstone (b) 18,087
SPECIALTY CONSUMER PRODUCT RETAILER
955,000 West Marine (b) 17,247
LARGEST RETAILER OF BOATING SUPPLIES
300,000 Fast Retailing (Japan) 15,557
APPAREL RETAILER
350,000 Edgars Consolidated Stores
(South Africa) 15,183
LEADING RETAIL CONGLOMERATE
1,062,000 Gaiam (b)(c) 7,392
HEALTHY LIVING CATALOGS & E-COMMERCE
$ 6,000 Gadzooks 5% Convertible 10/07/08 (d)(f) 0
TEEN APPAREL RETAILER
- ----------------------------------------------------------------------------
983,137
>CONSUMER SERVICES: 1.7%
2,250,000 ITT Educational Services (b) 120,195
POSTSECONDARY DEGREE PROGRAMS
775,000 Weight Watchers (b) 39,998
WEIGHT LOSS PROGRAMS
1,440,000 Coinstar (b)(c) 32,674
OWNER/OPERATOR OF COIN COUNTING MACHINES
1,530,000 Central Parking 21,037
OWNER, OPERATOR & MANAGER OF PARKING LOTS
& GARAGES
870,000 Park 24 (Japan) 17,186
PARKING LOT OPERATOR
1,850,000 Princeton Review (b)(c) 10,786
COLLEGE PREPARATION COURSES
2,350,000 Bally Total Fitness (b)(c) 7,614
NATIONAL CHAIN OF FITNESS CENTERS
- ----------------------------------------------------------------------------
249,490
1-800-922-6769
26
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CASINOS: 1.3%
745,000 Station Casinos $ 49,468
CASINOS & RIVERBOATS
875,000 Argosy Gaming (b) 40,784
REGIONAL RIVERBOAT CASINOS
2,750,000 Alliance Gaming (b)(c) 38,555
DIVERSIFIED GAMING COMPANY
1,925,000 Pinnacle Entertainment (b) 37,653
REGIONAL RIVERBOAT CASINOS
4,500,000 Sky City Entertainment (New Zealand) 13,985
CASINO/ENTERTAINMENT COMPLEX
226,000 Lakes Entertainment (b) 3,480
NATIVE AMERICAN CASINO DEVELOPMENT
- ----------------------------------------------------------------------------
183,925
>TRAVEL: 1.3%
2,110,000 Vail Resorts (b)(c) 59,291
OWNER/OPERATOR OF SKI RESORTS
1,814,500 Intrawest (Canada) 43,452
OWNER/OPERATOR OF SKI RESORTS
3,380,000 LaQuinta (b) 31,535
OWNER/FRANCHISER OF MID-PRICED HOTELS
314,000 Four Seasons Hotels (Canada) 20,755
LUXURY HOTEL OPERATOR
1,045,000 Navigant International (b)(c) 15,351
CORPORATE TRAVEL AGENCY
698,000 Jurys Doyle Hotel (Ireland) 13,088
OWNER/OPERATOR OF MID-PRICED HOTELS
- ----------------------------------------------------------------------------
183,472
>ENTERTAINMENT/LEISURE PRODUCTS: 0.9%
905,000 International Speedway Motors 50,915
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
1,220,000 RC2 (b)(c) 45,835
COLLECTIBLES, TOYS & INFANT PRODUCTS
933,000 Speedway Motorsports 34,110
MOTORSPORT RACETRACK OWNER & OPERATOR
500,000 Callaway Golf 7,715
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
138,575
>RESTAURANTS: 0.3%
1,700,000 AFC Enterprises (c) 22,406
POPEYES RESTAURANTS
364,000 Cheesecake Factory (b) 12,642
CASUAL DINING RESTAURANTS
366,000 Kappa Create (Japan) 7,628
SUSHI CHAIN RESTAURANT OPERATOR
- ----------------------------------------------------------------------------
42,676
>CRUISE LINES: 0.1%
400,000 Carnival 21,820
LARGEST CRUISE LINE
- ----------------------------------------------------------------------------
>GAMING: 0.1%
650,000 Paddy Power (Ireland) 11,093
IRISH BETTING SERVICES
690,000 Intralot (Greece) 10,526
LOTTERY & GAMING SYSTEMS & SERVICES
- ----------------------------------------------------------------------------
21,619
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
GOODS
>APPAREL: 2.4%
5,980,000 Coach (b) $ 200,749
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
844,000 Oxford Industries (c) 36,334
BRANDED & PRIVATE LABEL APPAREL
3,000,000 Billabong International (Australia) 30,993
ACTION SPORTS APPAREL BRAND MANAGER
469,000 Carter's (b) 27,380
CHILDREN'S BRANDED APPAREL
400,000 Columbia Sportswear (b) 19,756
ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES
728,000 Steven Madden (b)(c) 12,929
WHOLESALER/RETAILER OF FASHION FOOTWEAR
789,000 Wacoal (Japan) 10,011
WOMEN'S SPECIALTY APPAREL
3,882,411 Pacific Brands (Australia) 6,669
AUSTRALIAN BRANDED APPAREL
- ----------------------------------------------------------------------------
344,821
>FURNITURE/TEXTILES: 2.2%
2,200,000 HNI 112,530
OFFICE FURNITURE & FIREPLACES
765,000 Mohawk Industries (b) 63,113
CARPET & FLOORING
1,900,000 Herman Miller 58,596
OFFICE FURNITURE
2,130,000 Nobia (Sweden) 30,913
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
844,000 American Woodmark (c) 25,328
KITCHEN CABINET MANUFACTURER
1,384,000 Knoll 23,680
OFFICE FURNITURE
- ----------------------------------------------------------------------------
314,160
>NONDURABLES: 1.1%
895,000 Scotts Company (b) 63,733
CONSUMER LAWN & GARDEN PRODUCTS
1,689,000 SCP Pool 59,267
DISTRIBUTOR OF SWIMMING POOL SUPPLIES
630,000 Natura Cosmeticos (Brazil) 20,103
DIRECT RETAILER OF COSMETICS
657,000 Prestige Brands (b) 12,812
OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS
- ----------------------------------------------------------------------------
155,915
>LEISURE VEHICLES: 1.0%
1,745,000 Harley-Davidson 86,552
MOTORCYCLES & RELATED MERCHANDISE
850,000 Polaris Industries 45,900
LEISURE VEHICLES & RELATED PRODUCTS
762,000 Monaco Coach 13,099
RECREATIONAL VEHICLES
2,850,000 Ducati Motor (Italy) (b) 3,374
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
148,925
>FOOD & BEVERAGES: 0.9%
725,000 Orkla (Norway) 26,582
FOOD & DIVERSIFIED CONSUMER GOODS
27
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>FOOD & BEVERAGES--CONTINUED
1,000,000 Kerry (Ireland) $ 24,662
FOOD INGREDIENTS
850,000 NBTY (b) 22,049
VITAMINS & SUPPLEMENTS
30,000,000 Global Bio-Chem Technology
Group (China) 18,578
1,700,000 Global Bio-Chem Technology Group
Warrants (China) 28
REFINER OF CORN-BASED COMMODITIES
3,000,000 Lion Nathan (Australia) 17,247
BEER BREWER/DISTRIBUTOR
1,800,000 Davide Campari (Italy) 13,152
SPIRITS & WINE
900,000 IAWS (Ireland) 12,574
BAKED GOODS
- ----------------------------------------------------------------------------
134,872
>DURABLE GOODS: 0.9%
1,316,000 Helen of Troy (b) 33,505
HAIRDRYERS & CURLING IRONS
465,000 Hyundai Mobis (South Korea) 31,116
AUTO PARTS
10,000,000 Techtronic Industries (Hong Kong) 25,191
POWER TOOLS & MOTORIZED APPLIANCES
780,000 Shimano (Japan) 22,133
BICYCLE COMPONENTS & FISHING TACKLE
133,000 Funai Electric (Japan) 13,599
CONSUMER ELECTRONICS
- ----------------------------------------------------------------------------
125,544
-----------
CONSUMER GOODS/SERVICES: TOTAL 3,048,951
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 15.4%
>MACHINERY: 2.5%
1,050,000 Esco Technologies (b)(c) 105,840
FILTRATION & TEST EQUIPMENT
2,250,000 Ametek 94,162
AEROSPACE/INDUSTRIAL INSTRUMENTS
1,297,000 Nordson 44,461
DISPENSING SYSTEMS FOR ADHESIVES & COATINGS
1,140,000 Gardner Denver (b)(c) 39,991
AIR COMPRESSORS, BLOWERS & PUMPS
840,000 Pentair 35,960
PUMPS, WATER TREATMENT & TOOLS
1,100,000 Kaydon 30,635
SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS
106,000 Oshkosh Truck 8,298
SPECIALTY TRUCK MANUFACTURER
150,000 Tennant 5,312
NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT
- ----------------------------------------------------------------------------
364,659
>INDUSTRIAL GOODS: 2.2%
3,200,000 Clarcor (c) 93,600
MOBILE & INDUSTRIAL FILTERS
1,600,000 Genlyte Group (b)(c) 77,984
COMMERCIAL LIGHTING FIXTURES
1,440,000 Mine Safety Appliances 66,528
SAFETY EQUIPMENT
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
2,000,000 Donaldson $ 60,660
INDUSTRIAL AIR FILTRATION
390,000 Drew Industries (b) 17,706
RV & MFG HOME COMPONENTS
3,000,000 Electric City (b)(c) 2,760
ELECTRICITY CONSERVATION DEVICES
- ----------------------------------------------------------------------------
319,238
>LOGISTICS: 2.0%
2,750,000 Expeditors International
of Washington 136,978
INTERNATIONAL FREIGHT FORWARDER
900,000 UTI Worldwide 62,658
GLOBAL LOGISTICS & FREIGHT FORWARDING
2,000,000 Forward Air (c) 56,540
FREIGHT TRANSPORTATION BETWEEN AIRPORTS
2,600,000 Exel (United Kingdom) 39,359
GLOBAL LOGISTICS & FREIGHT FORWARDING
- ----------------------------------------------------------------------------
295,535
>INDUSTRIAL DISTRIBUTION: 1.9%
2,286,000 Watsco (c) 97,384
HVAC DISTRIBUTION
1,925,000 Airgas 47,490
INDUSTRIAL GAS DISTRIBUTOR
3,800,000 Grafton Group (Ireland) (b) 43,973
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
1,200,000 Hughes Supply 33,720
INDUSTRIAL DISTRIBUTION
1,031,000 Nuco2 (b)(c) 26,466
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
600,000 Aviall (b) 18,954
AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR
- ----------------------------------------------------------------------------
267,987
>CONSTRUCTION: 1.3%
738,000 Florida Rock Industries 54,132
CONCRETE & AGGREGATES
1,450,000 Simpson 44,298
WALL JOINT MAKER
787,500 Wienerberger (Austria) 36,494
BRICKS & CLAY ROOFING TILES
42,500 Geberit International (Switzerland) 27,119
PLUMBING SUPPLIES
380,000 Daito Trust Construction (Japan) 14,190
APARTMENT BUILDER
3,000,000 Consorcio (Mexico) 10,358
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
186,591
>STEEL: 1.2%
2,850,000 Gibraltar Industries (c) 52,839
STEEL PROCESSING
600,000 Tenaris (Argentina) 46,962
STEEL PIPE FOR OIL WELLS & PIPELINES
158,000 Vallourec (France) 45,368
SEAMLESS TUBES
1,700,000 Worthington Industries 26,860
STEEL PROCESSING
- ----------------------------------------------------------------------------
172,029
1-800-922-6769
28
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>OUTSOURCING SERVICES & TRAINING: 1.1%
1,800,000 Labor Ready (b) $ 41,958
TEMPORARY MANUAL LABOR
1,300,000 Administaff (c) 30,888
PROFESSIONAL EMPLOYER ORGANIZATION
635,000 Bilfinger Berger (Germany) 29,560
CONSTRUCTION & RELATED SERVICES
2,481,000 Quanta Services (b) 21,833
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
740,000 United Services Group (Netherlands) 19,528
TEMPORARY STAFFING SERVICES
565,000 Meitec (Japan) 17,341
STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS
600,000 GP Strategies (b) 4,884
TRAINING PROGRAMS
- ----------------------------------------------------------------------------
165,992
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 1.1%
3,150,000 Spartech (c) 56,070
PLASTICS DISTRIBUTION & COMPOUNDING
450,000 Novozymes (Denmark) 22,233
INDUSTRIAL ENZYMES
35,000 Sika (Switzerland) (b) 21,784
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL
APPLICATION
200,000 Imerys (France) 13,748
INDUSTRIAL MINERALS PRODUCER
750,000,000 Ultrapar (Brazil) 13,111
SPECIALTY CHEMICALS & LIQUID PROPANE GAS
DISTRIBUTION
260,000 Carbone Lorraine (France) 12,337
ADVANCED INDUSTRIAL MATERIALS
20,000 Givaudan (Switzerland) 11,600
INDUSTRIAL FRAGRANCES & FLAVORS
336,000 Schulman 6,011
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
156,894
>WATER: 1.1%
856,000 Cuno (b) 61,153
FILTRATION & FLUIDS CLARIFICATION
3,000,000 Tetra Tech (b)(c) 40,590
RESOURCE MANAGEMENT & INFRASTRUCTURE
CONSULTING
1,080,000 Pall 32,789
FILTRATION & FLUIDS CLARIFICATION
554,000 Watts Water Technologies 18,553
WATER, VALVES, REGULATORS & FILTRATION
- ----------------------------------------------------------------------------
153,085
>OTHER INDUSTRIAL SERVICES: 0.5%
825,000 Mobile Mini (b)(c) 28,446
LEASES PORTABLE STORAGE UNITS
1,500,000 Clark (c) 21,495
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
35,000 Schindler (Switzerland) 12,598
ELEVATOR MANUFACTURER & SERVICE PROVIDER
300,000 IMTech (Netherlands) 10,484
TECHNICAL ENGINEERING
185,000 Jaakko Poyry (Finland) 5,538
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
- ----------------------------------------------------------------------------
78,561
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONGLOMERATES: 0.4%
755,000 Aalberts Industrie (Netherlands) $ 34,500
FLOW CONTROL & HEAT TREATMENT
5,550 Pargesa (Switzerland) 20,226
INDUSTRIAL & MEDIA HOLDINGS
120,000 Hexagon (Sweden) 2,422
MEASUREMENT EQUIPMENT & POLYMERS
- ----------------------------------------------------------------------------
57,148
>ELECTRICAL COMPONENTS: 0.1%
1,125,000 Ushio (Japan) 19,937
INDUSTRIAL LIGHT SOURCES
- ----------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 2,237,656
- ----------------------------------------------------------------------------
FINANCE: 12.1%
>BANKS: 4.6%
2,712,000 Associated Banc-Corp 91,286
MIDWEST BANK
3,502,000 TCF Financial 90,632
GREAT LAKES BANK
1,958,000 BOK Financial 90,303
SOUTHWEST MIDDLE MARKET BANK
6,243,000 Anglo Irish Bank (Ireland) 77,328
SMALL BUSINESS & MIDDLE MARKET BANKING
2,734,000 Glacier Bancorp (c) 71,439
MOUNTAIN STATES BANK
1,320,000 West Coast Bancorp (c) 32,221
PORTLAND SMALL BUSINESS LENDER
250,000 Komercni Banka (Czech Republic) 31,314
LEADING CZECH UNIVERSAL BANK
1,850,000 Depfa Bank (Ireland) 29,563
INTERNATIONAL PUBLIC SECTOR FINANCE
1,516,000 Republic 22,710
MICHIGAN BANK
756,000 Chittenden 20,563
VERMONT & WESTERN MASSACHUSETTS BANK
640,000 Great Southern Bancorp 20,026
MISSOURI REAL ESTATE LENDER
1,670,000 Den Norske Bank (Norway) 17,305
LARGEST NORWEGIAN BANK
510,000 CityBank Lynnwood (c) 15,820
SEATTLE REAL ESTATE LENDER
551,000 West Bancorporation 10,359
DES MOINES COMMERCIAL BANK
256,000 First Financial BankShares 8,663
WEST TEXAS BANK
336,000 Sterling Bancorp 7,174
NEW YORK CITY NICHE LENDER
252,000 Independent Bank 7,167
MICHIGAN BANK
382,000 Cascade Financial 6,303
SEATTLE COMMUNITY BANK
242,000 First Mutual Bancshares 6,268
SEATTLE COMMUNITY BANK
200,000 S Y Bancorp 4,570
LOUISVILLE BANK
29
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BANKS--CONTINUED
18,000 Midwest Bank $ 347
CHICAGO BANK
- ----------------------------------------------------------------------------
661,361
>INSURANCE: 2.7%
575,000 Philadelphia Consolidated Holding (b) 48,737
SPECIALTY INSURANCE
1,169,000 Leucadia National 45,158
INSURANCE HOLDING COMPANY
995,000 Protective Life 42,009
LIFE INSURANCE
1,020,000 HCC Insurance Holdings 38,627
SPECIALTY INSURANCE
109,000 Markel (b) 36,951
SPECIALTY INSURANCE
1,500,000 Scottish Re Group 36,360
LIFE REINSURANCE
710,000 Selective Insurance Group 35,181
COMMERCIAL & PERSONAL LINES INSURANCE
715,000 Assurant 25,811
SPECIALTY INSURANCE
570,000 RLI 25,422
SPECIALTY INSURANCE
1,300,000 United America Indemnity (b) 22,347
SPECIALTY INSURANCE
560,000 Endurance Specialty Holdings 21,179
COMMERCIAL LINES INSURANCE/REINSURANCE
210,000 StanCorp Financial 16,082
GROUP LIFE & DISABILITY INSURANCE
- ----------------------------------------------------------------------------
393,864
>FINANCE COMPANIES: 1.7%
5,831,000 AmeriCredit (b) 148,690
AUTO LENDING
1,700,000 World Acceptance (b)(c) 51,085
PERSONAL LOANS
1,100,000 Intermediate Capital (United Kingdom) 20,527
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
1,000,000 Northgate (United Kingdom) 16,181
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
1,950,000 Paragon Group (United Kingdom) 14,755
UK BUY-TO-LET FINANCE COMPANY
- ----------------------------------------------------------------------------
251,238
>SAVINGS & LOANS: 1.7%
4,081,000 Peoples Bank Bridgeport 123,409
CONNECTICUT SAVINGS & LOAN
1,178,000 Anchor Bancorp Wisconsin (c) 35,646
WISCONSIN THRIFT
1,700,000 Housing Development Finance (India) 34,510
PREMIER MORTGAGE LENDER IN INDIA
1,285,000 Washington Federal 30,223
OLD FASHIONED THRIFT
200,000 Bankinter (Spain) 10,197
MORTGAGE LENDER
360,000 Provident Bancorp 4,360
NEW YORK STATE THRIFT
- ----------------------------------------------------------------------------
238,345
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>MONEY MANAGEMENT: 1.3%
2,355,000 SEI Investments $ 87,959
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
2,390,000 Eaton Vance 57,145
SPECIALTY MUTUAL FUNDS
1,290,000 Nuveen Investments 48,530
SPECIALTY MUTUAL FUNDS
- ----------------------------------------------------------------------------
193,634
>BROKERAGE: 0.1%
690,000 Investment Technology Group (b) 14,504
ELECTRONIC TRADING
- ----------------------------------------------------------------------------
-----------
FINANCE: TOTAL 1,752,946
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 9.4%
>OIL/GAS PRODUCERS: 5.0%
5,000,000 XTO Energy 169,950
NATURAL GAS PRODUCER
3,000,000 Talisman Energy (Canada) 112,198
OIL & GAS PRODUCER
3,200,000 Western Gas 111,680
OIL PRODUCER & COAL SEAM GAS PRODUCER
3,400,000 Ultra Petroleum (b) 103,224
NATURAL GAS PRODUCER
15,400,000 Tullow Oil (United Kingdom) 51,333
OIL & GAS PRODUCER
1,000,000 Southwestern Energy (b) 46,980
NATURAL GAS PRODUCER
700,000 Denbury Resources (b) 27,839
OIL PRODUCER USING CO2 INJECTION
1,000,000 Range Resources 26,900
OIL & GAS PRODUCER
662,800 Petrokazakhstan (Canada) 24,245
OIL PRODUCER & REFINER IN KAZAKHSTAN
1,200,000 McMoran Exploration (b) 23,412
NATURAL GAS PRODUCERS & LNG DEVELOPER
2,320,000 Tipperary (b)(c) 14,500
COAL SEAM GAS PRODUCER
3,200,000 Vaalco Energy (b)(c) 11,072
OIL & GAS PRODUCER
- ----------------------------------------------------------------------------
723,333
>OIL SERVICES: 2.7%
2,350,000 FMC Technologies (b) 75,130
OIL & GAS WELL HEAD MANUFACTURER
2,300,000 Pride International (b) 59,110
OFFSHORE DRILLING CONTRACTOR
500,000 Carbo Ceramics 39,480
NATURAL GAS WELL STIMULANTS
5,000,000 Newpark Resources (b)(c) 37,500
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
1,600,000 Chicago Bridge & Iron 36,576
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG
1,365,000 Fugro (Netherlands) 33,877
SURVEY & GPS SERVICES
2,400,000 Key Energy Services (b) 29,040
OIL & GAS WELL WORKOVER SERVICES
1-800-922-6769
30
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>OIL SERVICES--CONTINUED
1,350,000 Enerflex Systems (Canada) (c) $ 27,719
NATURAL GAS COMPRESSOR
2,000,000 Saipem (Italy) 26,856
OFFSHORE CONSTRUCTION & DRILLING
700,000 Veritas DGC (b) 19,418
GEOPHYSICAL CONTRACTOR
168,000 Pioneer Drilling (b) 2,564
OIL & GAS WELL DRILLER
- ----------------------------------------------------------------------------
387,270
>DISTRIBUTION/MARKETING/REFINING: 1.2%
1,200,000 Equitable Resources 81,600
NATURAL GAS PRODUCER & UTILITY
1,900,000 Oneok 62,035
NATURAL GAS UTILITY, MARKETING & PROCESSING
1,206,000 Atmos Energy 34,733
NATURAL GAS UTILITY
- ----------------------------------------------------------------------------
178,368
>MINING: 0.5%
1,440,000 Xstrata (United Kingdom) 27,666
DIVERSIFIED MINING HOLDING COMPANY
275,000 Sociedad Quimica Y Minera
de Chile (Chile) 27,500
PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM &
IODINE
900,000 Noranda (Canada) 15,414
DIVERSIFIED MINING HOLDING COMPANY
1,000,000 Ivanhoe Mines (Canada) (b) 7,757
COPPER MINING IN MONGOLIA
- ----------------------------------------------------------------------------
78,337
-----------
ENERGY/MINERALS: TOTAL 1,367,308
- ----------------------------------------------------------------------------
HEALTH CARE: 8.6%
>SERVICES: 2.9%
2,491,000 Lincare Holdings (b) 101,732
HOME HEALTH CARE SERVICES
1,370,000 Charles River Laboratories (b) 66,102
PHARMACEUTICAL RESEARCH
821,000 Coventry Health Care (b) 58,086
PPO NETWORK
2,592,000 NDCHealth Group (c) 46,578
HEALTH CLAIMS PROCESSING & DRUG MARKETING
SERVICES
3,470,000 Gambro (Sweden) 46,304
PRODUCTS & SERVICES FOR RENAL CARE
510,000 OPG Groep (Netherlands) 35,513
HEALTHCARE SUPPLIES & PHARMACIES
2,033,000 Dendrite International (b) 28,055
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
1,200,000 Serologicals (b) 25,500
BLOOD COLLECTION & ANTIBODY PRODUCTION
236,000 Omega Pharma (Belgium) 12,184
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
440,000 Medquist (b) 5,852
MEDICAL TRANSCRIPTION SERVICES
- ----------------------------------------------------------------------------
425,906
>MEDICAL EQUIPMENT/LABORATORY
SUPPLIES: 2.7%
1,629,000 Edwards Lifesciences (b) 70,080
HEART VALVES
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
1,240,000 Diagnostic Products $ 58,689
IMMUNODIAGNOSTIC KITS
1,180,000 Intermagnetics General (b) 36,297
MRI EQUIPMENT
851,000 Arrow International 27,147
DISPOSABLE CATHETERS
1,150,000 CYTYC (b) 25,369
CONSUMABLES RELATED TO WOMEN'S HEALTH
583,000 Orthofix International (b) 25,092
BONE FIXATION & STIMULATION DEVICES
365,000 Essilor International (France) 24,838
EYEGLASS LENSES
714,000 ICU Medical (b)(c) 22,969
INTRAVENOUS THERAPY PRODUCTS
552,000 Advanced Medical Optics (b) 21,942
MEDICAL DEVICES FOR EYE CARE
875,000 Viasys Healthcare (b) 19,766
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
390,000 Hogy Medical (Japan) 17,395
DISPOSABLE SURGICAL PRODUCTS
350,000 Haemonetics (b) 14,224
BLOOD & PLASMA COLLECTION EQUIPMENT
125,000 Synthes (Switzerland) 13,679
PRODUCTS FOR ORTHOPEDIC SURGERY
261,000 Datascope 8,704
MEDICAL DEVICES
- ----------------------------------------------------------------------------
386,191
>BIOTECHNOLOGY/DRUG DELIVERY: 2.2%
880,000 Neurocrine Biosciences (b) 37,013
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
900,000 Martek Biosciences (b) 34,155
FATTY ACIDS FOR BABY FORMULA & OTHER FOODS
1,350,000 DOV Pharmaceutical (b)(c) 25,191
DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION
2,400,000 Pozen (b)(c) 19,680
DRUGS FOR MIGRAINES
1,179,000 AtheroGenics (b) 18,840
DRUGS FOR ATHEROSCLEROSIS
1,900,000 Decode Genetics (b) 17,841
DRUGS FOR HEART ATTACK, ASTHMA & VASCULAR DISEASE
1,055,000 Nektar Therapeutics (b) 17,766
DRUG DELIVERY TECHNOLOGIES
1,500,000 Tanox (b) 17,580
DRUGS FOR ASTHMA & HIV
2,000,000 Medarex (b) 16,660
HUMANIZED ANTIBODIES
3,100,000 Lexicon Genetics (b) 15,314
DRUG DISCOVERY
2,000,000 Exelixis (b) 14,860
TREATMENTS FOR CANCER & METABOLIC DISORDERS
675,000 Rigel Pharmaceuticals (b) 13,446
DRUGS FOR HAY FEVER, ASTHMA, HEPATITIS & CANCER
1,176,000 NPS Pharmaceuticals (b) 13,348
DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM
2,300,000 Seattle Genetics (b)(c) 12,328
ANTIBODY-BASED THERAPIES FOR CANCER
1,200,000 Ligand Pharmaceuticals (b) 8,340
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES
865,000 Arena Pharmaceuticals (b) 5,899
NOVEL DRUG TARGETING TECHNOLOGY
31
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED
705,000 Cytokinetics (b) $ 4,900
DRUGS FOR CANCER & HEART FAILURE
5,500,000 La Jolla Pharmaceutical (b)(c) 4,510
LUPUS TREATMENT
635,000 Maxygen (b) 4,356
MOLECULAR BREEDING
1,875,000 Locus Discovery, Series D, Pfd. (d)(f) 3,750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
638,000 Diversa (b) 3,324
MOLECULAR BREEDING
1,249,999 Perlegen Sciences (d)(f) 2,632
LARGE SCALE GENE SEQUENCING
359,944 Microdose (d)(f) 270
DRUG INHALERS
- ----------------------------------------------------------------------------
312,003
>MEDICAL SUPPLIES: 0.4%
686,000 Techne (b) 31,494
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR
LIFE SCIENCES
650,000 Owens & Minor 21,028
DISTRIBUTION OF MEDICAL SUPPLIES
- ----------------------------------------------------------------------------
52,522
>HOSPITAL MANAGEMENT: 0.2%
500,000 Rhoen-Klinikum (Germany) 34,626
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
>PHARMACEUTICALS: 0.2%
500,000 Par Pharmaceuticals (b) 15,905
GENERICS
3,495,000 United Drug (Ireland) 14,996
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
- ----------------------------------------------------------------------------
30,901
-----------
HEALTH CARE: TOTAL 1,242,149
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 4.0%
>REAL ESTATE: 2.6%
1,320,000 General Growth Properties 54,239
REGIONAL SHOPPING MALLS
699,000 Forest City Enterprises, Cl. B 49,112
COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER
635,000 Macerich Company 42,577
REGIONAL SHOPPING MALLS
650,000 SL Green Realty 41,925
MANHATTAN OFFICE BUILDINGS
620,000 Mills 37,690
REGIONAL SHOPPING MALLS
575,000 Federal Realty Investment Trust 33,925
SHOPPING CENTERS
2,552,000 Highland Hospitality (c) 26,668
HOTEL REAL ESTATE INVESTMENT TRUST
1,375,000 Crescent Real Estate Equities 25,781
CLASS A OFFICE BUILDINGS
475,000 Gaylord Entertainment (b) 22,083
CONVENTION HOTELS
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
1,355,000 Sponda (Finland) $ 13,928
OFFICE & WAREHOUSE PROPERTY COMPANY
1,000,000 Diamondrock
Hospitality 144A (b)(d) 11,300
303,000 Diamondrock Hospitality 3,424
HOTEL REAL ESTATE INVESTMENT TRUST
717,000 Kite Realty Group 10,755
COMMUNITY SHOPPING CENTERS
37,407 Security Capital European Realty
(Luxembourg) (d)(f) 527
SELF STORAGE PROPERTIES
- ----------------------------------------------------------------------------
373,934
>TRANSPORTATION: 0.6%
1,500,000 Heartland Express 29,145
REGIONAL TRUCKER
720,000 Grupo Aeroportaurio Del Sureste
(Mexico) 22,932
CANCUN & COZUMEL AIRPORT OPERATOR
18,000,000 Comfort Del Gro (Singapore) 17,993
TAXI & MASS TRANSIT SERVICE
70,000 Kobenhavns Lufthavne (Denmark) 16,569
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
86,639
>REGULATED UTILITIES: 0.4%
1,650,000 Northeast Utilities 34,419
REGULATED ELECTRIC UTILITY
989,800 Red Electrica (Spain) 27,320
SPANISH POWER GRID
- ----------------------------------------------------------------------------
61,739
>WASTE MANAGEMENT: 0.4%
1,500,000 Waste Connections (b) 55,935
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
-----------
OTHER INDUSTRIES TOTAL 578,247
TOTAL COMMON STOCKS AND OTHER -----------
EQUITY-LIKE SECURITIES: 92.4% 13,401,299
(COST: $7,966,904)
SHORT-TERM OBLIGATIONS: 7.6%
$ 125,000 Aluminum Company America
3.08% - 3.24% Due
7/12/05 - 8/3/05 124,790
107,000 Toyota Motor Credit 3.04% - 3.21%
Due 7/13/05 - 8/4/05 106,831
99,000 SBC Communications 3.10% - 3.14%
Due 7/7/05 - 7/26/05 98,859
85,000 HSBC Finance Corp 3.23% - 3.25%
Due 8/5/05 - 8/10/05 84,713
78,000 Verizon Network 2.74%
Due 4/26/05 77,840
73,000 General Electric Capital Services
3.08% - 3.20% -
Due 7/21/05 - 8/01/25 72,846
1-800-922-6769
32
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS--CONTINUED
$ 63,000 American General Finance
3.13% - 3.26%
Due 7/19/05 - 8/9/05 $ 62,846
62,000 Hewlett Packard 3.14% - 3.16% -
Due 7/27/05 - 7/28/05 61,856
45,000 American Express Credit 3.06%
Due 7/11/05 44,962
45,000 Prudential Funding 3.09%
Due 7/22/05 44,919
45,000 LaSalle Bank 3.14% Due 7/25/05 44,906
45,000 Verizon Global Funding 3.21% -
Due 8/2/05 44,872
43,000 Marshall + Ilsley 3.17%
Due 7/29/05 42,894
40,000 Campbell Soup Company 3.04%
Due 7/8/05 39,976
35,000 General Electric Capital Corporate
3.01% Due 7/1/05 35,000
35,000 Eaton Company 3.03% Due 7/6/05 34,985
35,000 Countrywide Funding 3.29%
Due 8/11/05 34,869
34,000 AIG Funding 3.11% - Due 7/18/05 33,950
6,597 Repurchase Agreement with State Street Bank &
Trust dated 6/30/05, due 7/1/05 at 3.00%
collateralized by Federal National Mortgage
Association Notes, maturing 3/24/08 market
value $6,733 (repurchase proceeds: $6,598) 6,597
- ----------------------------------------------------------------------------
(AMORTIZED COST: $1,098,511) 1,098,511
-----------
TOTAL INVESTMENTS: 100.0% 14,499,810
(COST: $9,065,415)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,997
-----------
TOTAL NET ASSETS: 100% $14,502,807
============================================================================
33
COLUMBIA ACORN FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$9,065,415 and net unrealized appreciation was $5,434,395 consisting of gross
unrealized appreciation of $5,840,365 and gross unrealized depreciation of
$405,970.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent or
more of its outstanding voting shares. On June 30, 2005, the Fund held five
percent or more of the outstanding voting securities of the following companies:
AnswerThink Consulting 10.71%
Christopher & Banks 10.46
Spartech 9.87
New Horizons Worldwide 9.80
Indus International 9.75
Actuate 9.66
Gibraltar Industries 9.59
Igate Capital 9.51
Analysts International 9.27
World Acceptance 9.07
West Coast Bancorp 8.91
Skillsoft Publishing 8.89
Glacier Bancorp 8.75
E.Piphany 8.63
Watsco 8.32
Pozen 8.29
Esco Technologies 8.26
Clark 8.15
MRO Software 7.90
Concurrent Computer 7.85
JDA Software Group 7.56
La Jolla Pharmaceutical 7.44
NDCHealth Group 7.18
Electric City 7.17
Gaiam 7.16
Bally Total Fitness 6.89
Nuco2 6.79
Navigant International 6.74
Princeton Review 6.71
SeaChange International 6.60
Highland Hospitality 6.37
Clarcor 6.20
Forward Air 6.18%
Pegasus Systems 6.03
Enerflex Systems 6.00
Newpark Resources 5.93
RC2 5.93
DOV Pharmaceutical 5.93
Sports Authority 5.86
AFC Enterprises 5.78
Genlyte Group 5.76
IXYS 5.71
Vaalco Energy 5.69
Coinstar 5.66
Gardner Denver 5.66
Aspect Communications 5.62
Tipperary 5.60
Steven Madden 5.60
Mobile Mini 5.57
Seattle Genetics 5.45
Alliance Gaming 5.38
Tetra Tech 5.29
Radiant Systems 5.28
Excel Technologies 5.18
Anchor Bancorp Wisconsin 5.18
ICU Medical 5.16
American Woodmark 5.11
Administaff 5.09
CTS 5.08
CityBank Lynnwood 5.06
Vail Resorts 5.01
Oxford Industries 5.00
InfoUSA 5.00
The aggregate cost and value of these companies at June 30, 2005, was $1,549,261
and $1,988,672, respectively. Investments in affiliate companies represent 13.7%
of total net assets at June 30, 2005. Investment activity and income amounts
relating to affiliates during the six months ended June 30, 2005 were as
follows:
Dividend Income $ 14,830
Net realized gain or loss $ 1,653
Change in unrealized gain or loss $ (41,103)
Purchases $ 156,956
Proceeds from sales $ 18,992
1-800-922-6769
34
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At June 30, 2005, these securities were
illiquid. At June 30, 2005, these securities (in thousands) amounted to
$18,479, which represents 0.13% of total net assets.
Additional information on these securities is as follows:
ACQUISITION SHARES/
SECURITY DATES PAR (000) COST (000) VALUE (000)
- ----------------------------------------------------------------------------------------
Diamondrock Hospitality 06/29/04 1,000,000 $ 10,000 $11,300
Gadzooks 5% Convertible 10/07/08 10/08/03 $ 6,000 6,000 0
Locus Discovery, Series D, Pfd. 09/05/01 1,875,000 7,500 3,750
Microdose 11/24/00 359,944 2,005 270
Perlegen Sciences 03/30/01 1,249,999 4,500 2,632
Security Capital European Realty
(Luxembourg) 08/20/98-11/12/99 37,407 748 527
---------- -------
$ 30,753 $18,479
========== =======
(e) On June 30, 2005, the market value of foreign securities (in thousands)
represents 14.95% of total net assets. The Fund's foreign portfolio was
diversified as follows:
VALUE PERCENT
===============================================
Canada $ 259,354 1.79%
Ireland 227,277 1.57
United Kingdom 190,167 1.31
France 185,595 1.28
Japan 184,812 1.27
Netherlands 133,902 0.92
Switzerland 107,006 0.74
Germany 82,977 0.57
Sweden 79,639 0.55
Taiwan 67,801 0.47
Australia 54,909 0.38
Hong Kong 48,503 0.33
Argentina 46,962 0.32
Norway 43,887 0.30
Italy 43,382 0.30
Denmark 38,802 0.27
VALUE PERCENT
===============================================
Spain $ 37,517 0.26%
Austria 36,494 0.25
India 34,510 0.24
Mexico 33,290 0.23
Brazil 33,214 0.23
Czech Republic 31,314 0.22
South Korea 31,116 0.22
Chile 27,500 0.19
Finland 19,466 0.13
China 18,606 0.13
Singapore 17,993 0.12
South Africa 15,183 0.11
New Zealand 13,985 0.10
Belgium 12,184 0.08
Greece 10,526 0.07
Luxembourg 527 0.00
---------- -----
Total Foreign Portfolio $2,168,400 14.95%
========== =====
(f) Represents fair value as determined in good faith under procedures
approved by the Board of Trustees.
35
COLUMBIA ACORN INTERNATIONAL
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Bloomsbury Publishing 0 911,000
Expro International 2,600,000 2,840,000
IAWS (Ireland) 1,400,000 1,425,000
Kensington 1,650,000 1,700,000
Paddy Power (Ireland) 0 600,000
Paragon Group 1,600,000 2,800,000
Ulster Television 223,000 1,281,000
United Drug (Ireland) 4,300,000 4,825,000
William Hill 0 1,200,000
Workspace Group 2,100,000 2,450,000
>FRANCE
April Group 400,000 492,000
Iliad 279,500 390,000
Imerys 300,000 360,000
Metropole TV 360,000 450,000
Rubis 0 31,000
>GERMANY
Bilfinger Berger 300,000 445,000
CTS Eventim 0 77,000
GFK 350,000 415,000
Grenke Grenkeleasing 160,000 203,000
Wincor Nixdorf 225,000 275,000
>NETHERLANDS
Aalberts Industrie 540,000 550,000
Fugro 1,115,200 1,245,000
(INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT)
Sligro Food Group 340,000 400,000
Smit International 0 289,000
United Services Group 620,000 684,000
>SWITZERLAND
BKW Energie 0 119,000
(INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT)
Kuehne & Nagel 85,000 95,000
>SWEDEN
Gambro 470,000 762,000
Hexagon 1,194,000 1,230,000
(INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT)
>RUSSIAN FEDERATION
Mechel Steel Group 260,000 370,000
RBC Information Systems 0 700,000
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Ito En 142,000 301,000
Sato 88,800 450,000
Shimano 250,000 450,000
Ushio 550,000 750,000
>TAIWAN
Advantech 4,978,000 6,500,000
ASE Test 1,245,100 1,772,600
Novatek Microelectronics 0 1,800,000
>INDIA
Housing Development Finance 1,300,000 1,329,000
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>AUSTRALIA
ABC Learning Center 0 1,225,000
- ----------------------------------------------------------------------------
LATIN AMERICA
>BRAZIL
Caemi 6,300,000 8,800,000
Diagnosticos 156,250 200,000
Porto Seguro 594,000 1,000,000
Ultrapar 0 500,000,000
>MEXICO
URBI Desarrollo 700,000 1,000,000
>CHILE
Sociedad Quimica Y Minera
de Chile 16,800 160,000
1-800-922-6769
36
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Anglo Irish Bank (Ireland) 4,741,010 3,888,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Hit Entertainment 1,270,000 0
Tullow Oil 7,500,000 6,500,000
>FRANCE
Neopost 377,500 327,500
>NETHERLANDS
Hunter Douglas 128,000 0
>SWITZERLAND
Bachem 110,000 0
>SPAIN
Abengoa 2,000,000 1,357,000
>ITALY
Amplifon 270,000 190,000
Autogrill 830,000 0
Credito Emiliano 1,000,000 0
>FINLAND
Amer Sports 555,000 0
>NORWAY
Den Norske Bank 910,000 0
Ekornes 522,300 470,000
NUMBER OF SHARES
----------------------------
03/31/05 06/30/05
- ----------------------------------------------------------------------------
ASIA
>JAPAN
ARRK 380,000 0
Eneserve 358,000 63,000
Kappa Create 402,000 380,000
NIFCO 818,000 14,000
Olympus Optical 325,000 0
Wacoal 1,500,000 1,185,000
>HONG KONG
Esprit Holdings 2,000,000 0
Lerado Group 27,932,000 27,480,000
Ngai Lik Industrial 14,500,000 11,330,000
>SOUTH KOREA
Yuhan 63,280 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Corus Entertainment 330,000 0
Masonite International 445,000 0
Petrokazakhstan 185,000 153,100
37
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 96.0%
- ----------------------------------------------------------------------------
EUROPE: 59.7%
>UNITED KINGDOM/IRELAND: 19.6%
3,888,000 Anglo Irish Bank (Ireland) $ 48,158
SMALL BUSINESS & MIDDLE MARKET BANKING
2,350,000 Grafton Group (Ireland) (b) 27,194
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
1,750,000 Exel 26,492
GLOBAL LOGISTICS & FREIGHT FORWARDING
2,840,000 Expro International 23,056
OFFSHORE OIL FIELD SERVICES
6,500,000 Tullow Oil 21,667
OIL & GAS PRODUCER
2,800,000 Paragon Group 21,187
UK BUY-TO-LET FINANCE COMPANY
4,825,000 United Drug (Ireland) 20,703
IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER
1,275,000 Depfa Bank (Ireland) 20,375
INTERNATIONAL PUBLIC SECTOR FINANCE
1,425,000 IAWS (Ireland) 19,908
BAKED GOODS
800,000 Kerry (Ireland) 19,730
FOOD INGREDIENTS
1,700,000 Kensington 17,127
NON-CONFORMING MORTGAGE COMPANY
900,000 Intermediate Capital 16,795
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
975,000 Northgate 15,777
LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST
600,000 Cobham 15,205
AEROSPACE COMPONENTS
798,000 Jurys Doyle Hotel (Ireland) 14,963
OWNER/OPERATOR OF MID-PRICED HOTELS
750,000 Xstrata 14,409
DIVERSIFIED MINING HOLDING COMPANY
1,175,000 Business Post 13,384
PARCEL & EXPRESS MAIL SERVICE
2,200,000 BBA Group 12,141
AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS
1,200,000 William Hill 11,545
LARGEST BOOKMAKER
1,281,000 Ulster Television 10,749
IRISH TELEVISION & RADIO STATION OPERATOR
1,200,000 Spectris 10,616
ELECTRONIC INSTRUMENTS & CONTROLS
3,800,000 RPS Group 10,486
ENVIRONMENTAL CONSULTING
2,450,000 Workspace Group 10,342
REAL ESTATE COMPANY
600,000 Paddy Power (Ireland) 10,240
IRISH BETTING SERVICES
500,000 Viridian 6,977
NORTHERN IRELAND ELECTRIC UTILITY
911,000 Bloomsbury Publishing 6,143
PUBLISHING
- ----------------------------------------------------------------------------
445,369
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>FRANCE/BELGIUM: 9.7%
117,000 Vallourec $ 33,595
SEAMLESS TUBES
1,980,000 SES Global 29,803
SATELLITE BROADCASTING SERVICES
327,500 Neopost 28,784
POSTAGE METER MACHINES
360,000 Imerys 24,746
INDUSTRIAL MINERALS PRODUCER
492,000 April Group 15,296
INSURANCE POLICY CONSTRUCTION
390,000 Iliad 14,566
HIGH SPEED INTERNET SERVICE PROVIDER
450,000 Metropole TV 11,399
TELEVISION BROADCASTER
215,000 Carbone Lorraine 10,202
ADVANCED INDUSTRIAL MATERIALS
140,000 Essilor International 9,527
EYEGLASS LENSES
184,000 Omega Pharma (Belgium) 9,500
OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES
400,000 Fininfo 8,378
DATA FEEDS FOR FRENCH BANKS & BROKERS
94,000 Bacou Dalloz 7,689
SAFETY EQUIPMENT
96,000 Pierre & Vacances 7,081
VACATION APARTMENT LETS
140,000 Norbert Dentressangle 6,600
TRANSPORT
31,000 Rubis 1,928
TANK STORAGE & LPG SUPPLIER
- ----------------------------------------------------------------------------
219,094
>GERMANY/AUSTRIA: 8.0%
275,000 Wincor Nixdorf 22,467
RETAIL POS SYSTEMS & ATM MACHINES
315,000 Rhoen-Klinikum Pfd. 21,773
300,000 Rhoen-Klinikum 20,775
HOSPITAL MANAGEMENT
445,000 Bilfinger Berger 20,715
CONSTRUCTION & RELATED SERVICES
375,000 Wienerberger (Austria) 17,378
BRICKS & CLAY ROOFING TILES
415,000 GFK 16,363
MARKET RESEARCH SERVICES
450,000 Hugo Boss Designs 14,761
FASHION APPAREL
175,000 Deutsche Boerse 13,653
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
200,000 Vossloh 9,352
RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES
203,000 Grenke Grenkeleasing 8,603
FINANCING FOR IT EQUIPMENT
864,998 Takkt 8,346
MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES
1-800-922-6769
38
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>GERMANY/AUSTRIA--CONTINUED
260,000 Deutsche Beteiligungs $ 4,053
PRIVATE EQUITY INVESTMENT MANAGEMENT
77,000 CTS Eventim (b) 3,232
EVENT TICKET SALES
- ----------------------------------------------------------------------------
181,471
>NETHERLANDS: 7.7%
1,245,000 Fugro 30,899
SURVEY & GPS SERVICES
550,000 Aalberts Industries 25,132
FLOW CONTROL & HEAT TREATMENT
327,000 OPG Groep 22,770
HEALTHCARE SUPPLIES & PHARMACIES
230,000 Koninklijke Ten Cate 20,674
ADVANCED TEXTILES & INDUSTRIAL FABRICS
684,000 United Services Group 18,050
TEMPORARY STAFFING SERVICES
400,000 Sligro Food Group 16,066
FOOD SERVICE & WHOLESALING
400,000 IMTech 13,979
TECHNICAL ENGINEERING
890,000 Unit 4 Aggresso (b) 13,581
BUSINESS & SECURITY SOFTWARE
289,000 Smit International 13,398
HARBOR & OFFSHORE TOWAGE & MARINE SERVICES
- ----------------------------------------------------------------------------
174,549
>SWITZERLAND: 4.3%
95,000 Kuehne & Nagel 20,088
FREIGHT FORWARDING/LOGISTICS
25,000 Geberit International 15,953
PLUMBING SUPPLIES
24,000 Sika (b) 14,937
CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION
3,000 Pargesa 10,933
INDUSTRIAL & MEDIA CONGLOMERATE
30,000 Schindler 10,798
ELEVATOR MANUFACTURER & SERVICE PROVIDER
85,000 Synthes 9,302
PRODUCTS FOR ORTHOPEDIC SURGERY
15,000 Givaudan 8,700
INDUSTRIAL FRAGRANCES & FLAVORS
119,000 BKW Energie 7,437
ELECTRIC UTILITY
- ----------------------------------------------------------------------------
98,148
>SWEDEN: 2.4%
1,230,000 Hexagon 24,827
MEASUREMENT EQUIPMENT & POLYMERS
1,075,000 Nobia 15,601
KITCHEN CABINET MANUFACTURING & DISTRIBUTION
762,000 Gambro 10,168
PRODUCTS/SERVICES FOR RENAL CARE
188,000 Sweco (b) 3,388
NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING
- ----------------------------------------------------------------------------
53,984
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>SPAIN: 1.7%
1,357,000 Abengoa $ 15,722
ENGINEERING & CONSTRUCTION
620,000 Red Electrica 17,113
SPANISH POWER GRID
120,000 Bankinter 6,118
MORTGAGE LENDER
- ----------------------------------------------------------------------------
38,953
>ITALY: 1.4%
2,120,000 Davide Campari 15,490
SPIRITS & WINE
190,000 Amplifon 12,055
HEARING AID RETAILER
3,388,000 Ducati Motor (b) 4,011
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
31,556
>CZECH REPUBLIC: 1.0%
183,000 Komercni Banka 22,922
LEADING CZECH UNIVERSAL BANK
- ----------------------------------------------------------------------------
>FINLAND: 1.0%
439,000 Jaakko Poyry 13,142
ENGINEERING CONSULTANTS IN FORESTRY, ENERGY
950,000 Sponda 9,765
OFFICE & WAREHOUSE PROPERTY COMPANY
- ----------------------------------------------------------------------------
22,907
>RUSSIAN FEDERATION: 0.9%
700,000 RBC Information Systems (b) 11,620
FINANCIAL INFORMATION, MEDIA, & IT SERVICES
370,000 Mechel Steel Group 9,398
COKING COAL
- ----------------------------------------------------------------------------
21,018
>NORWAY: 0.8%
470,000 Ekornes 9,091
NICHE FURNITURE MANUFACTURER
221,000 Orkla 8,103
FOOD & DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
17,194
>GREECE: 0.6%
930,000 Intralot 14,187
LOTTERY & GAMING SYSTEMS/SERVICES
- ----------------------------------------------------------------------------
>DENMARK: 0.4%
35,000 Kobenhavns Lufthavne 8,285
COPENHAGEN AIRPORT AUTHORITY
- ----------------------------------------------------------------------------
>POLAND: 0.2%
132,000 Central European Distribution (b) 4,928
SPIRITS & WINE DISTRIBUTION
-----------
EUROPE: TOTAL 1,354,565
- ----------------------------------------------------------------------------
39
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
ASIA: 21.7%
>JAPAN: 10.6%
480,100 Daito Trust Construction $ 17,928
APARTMENT BUILDER
862,000 Park 24 17,028
PARKING LOT OPERATOR
2,900,000 Bank of Yokohama 16,664
REGIONAL BANK
301,000 Ito En 15,435
BOTTLED TEA & OTHER BEVERAGES
338,000 Hogy Medical 15,076
DISPOSABLE SURGICAL PRODUCTS
1,185,000 Wacoal 15,035
WOMEN'S SPECIALTY APPAREL
470,000 Meitec 14,425
STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS
750,000 Ushio 13,291
INDUSTRIAL LIGHT SOURCES
450,000 Shimano 12,769
BICYCLE COMPONENTS & FISHING TACKLE
14,465 Jupiter Telecommunications (b) 12,155
LARGEST CABLE SERVICE PROVIDER IN JAPAN
220,000 Fast Retailing 11,408
APPAREL RETAILER
110,000 Funai Electric 11,247
CONSUMER ELECTRONICS
906,000 Toyo Technica 10,380
VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION
2,248,000 Hiroshima Bank 10,219
REGIONAL BANK
450,000 Sato 10,038
BAR CODE PRINTERS & SUPPLIES
1,400,000 Chiba Bank 9,185
REGIONAL BANK
450,200 Ain Pharmaciez 9,098
DISPENSING PHARMACY/DRUGSTORE OPERATOR
1,500,000 Fukuoka Bank 8,857
REGIONAL BANK
380,000 Kappa Create 7,920
SUSHI CHAIN RESTAURANT OPERATOR
63,000 Eneserve 1,879
POWER GENERATORS
14,000 NIFCO 212
MOLDED PLASTIC COMPONENTS
- ----------------------------------------------------------------------------
240,249
>TAIWAN: 4.3%
15,740,000 Phoenixtec Power 16,887
UNINTERRUPTIBLE POWER SUPPLIES
6,500,000 Advantech 15,319
EMBEDDED COMPUTERS
1,772,600 ASE Test (b) 11,416
SEMICONDUCTOR PACKAGING & TEST SERVICES
5,167,000 Springsoft Systems 10,740
ELECTRONIC DESIGN AUTOMATION SOFTWARE
9,661,000 Chicony Electronic 9,993
PC POWER SUPPLIES & KEYBOARDS
6,000,000 Sunplus Technology 8,398
FABLESS SEMICONDUCTOR DESIGNER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
5,300,000 Wah Lee Industrial $ 7,888
DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT
1,800,000 Novatek Microelectronics 7,654
LCD RELATED IC DESIGNER
8,470,000 Bank of Kaohsiung 5,980
COMMERCIAL BANKING
3,010,000 Taiwan Fu Hsing 3,380
DOOR LOCK MANUFACTURER
- ----------------------------------------------------------------------------
97,655
>HONG KONG/CHINA: 2.7%
6,000,000 Hong Kong Exchanges & Clearing 15,541
HONG KONG EQUITY & DERIVATIVES OPERATOR
25,000,000 Global Bio-Chem Technology
Group (China) 15,481
1,800,000 Global Bio-Chem Technology Group
Warrants (China) 30
REFINER OF CORN-BASED COMMODITIES
6,000,000 Techtronic Industries 15,115
POWER TOOLS & MOTORIZED APPLIANCES
9,800,000 Hainan Meilan Airport (China) 5,573
CHINESE AIRPORT OPERATOR
17,700,000 Linmark 5,059
SOURCING OF CONSUMER GOODS
27,480,000 Lerado Group 2,898
BABY STROLLERS & INFANT CAR SEATS MANUFACTURER
11,330,000 Ngai Lik Industrial 2,235
CONSUMER ELECTRONICS MANUFACTURER
- ----------------------------------------------------------------------------
61,932
>SOUTH KOREA: 1.2%
250,000 Hyundai Mobis 16,729
AUTO PARTS
100,000 Samsung Fire & Marine 8,083
NON-LIFE INSURANCE
200,000 Samyoung Heat Exchange 3,069
POWER PLANT RELATED MACHINERY
- ----------------------------------------------------------------------------
27,881
>INDIA: 1.2%
1,329,000 Housing Development Finance 26,978
PREMIER MORTGAGE LENDER IN INDIA
- ----------------------------------------------------------------------------
>SINGAPORE: 1.1%
16,000,000 Comfort Del Gro 15,993
TAXI & MASS TRANSIT SERVICE
19,500,000 LMA International (b) 9,219
MEDICAL EQUIPMENT & SUPPLIES
- ----------------------------------------------------------------------------
25,212
>INDONESIA: 0.6%
45,000,000 PT Perusahaan Gas Negara 13,279
GAS PIPELINE OPERATOR
- ----------------------------------------------------------------------------
-----------
ASIA: TOTAL 493,186
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 8.2%
>AUSTRALIA/NEW ZEALAND: 3.9%
3,000,000 Billabong International 30,993
ACTION SPORTS APPAREL BRAND MANAGER
3,000,000 Lion Nathan 17,247
BEER BREWER/DISTRIBUTOR
1-800-922-6769
40
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>AUSTRALIA/NEW ZEALAND--CONTINUED
350,000 Perpetual Trustees $ 15,232
AUSTRALIAN MUTUAL FUND MANAGER
3,000,000 Sky City Entertainment
(New Zealand) 9,323
CASINO/ENTERTAINMENT COMPLEX
3,882,489 Pacific Brands 6,670
AUSTRALIAN BRANDED APPAREL
530,000 Major Drilling Group International (b) 5,225
MINING EXPLORATION DRILLER
1,225,000 ABC Learning Center 5,187
CHILDCARE CENTERS
- ----------------------------------------------------------------------------
89,877
>CANADA: 3.6%
595,000 Talisman Energy 22,253
OIL & GAS PRODUCER
1,190,000 Shawcor 17,472
OIL & GAS PIPELINE PRODUCTS
450,000 Intrawest 10,776
OWNER/OPERATOR OF SKI RESORTS
400,000 Noranda 6,851
DIVERSIFIED MINING HOLDING COMPANY
1,100,000 Kinross Gold (b) 6,722
GOLD MINING
850,000 Ivanhoe Mines (b) 6,593
COPPER MINING IN MONGOLIA
153,100 Petrokazakhstan 5,600
OIL PRODUCER & REFINER IN KAZAKHSTAN
2,000,000 Northern Orion Resources (b) 4,921
MINING OF COPPER & GOLD IN ARGENTINA
- ----------------------------------------------------------------------------
81,188
>SOUTH AFRICA: 0.7%
350,000 Edgars Consolidated Stores 15,183
LEADING RETAIL CONGLOMERATE
- ----------------------------------------------------------------------------
-----------
OTHER COUNTRIES: TOTAL 186,248
- ----------------------------------------------------------------------------
LATIN AMERICA: 6.4%
>BRAZIL: 2.5%
640,000 Natura Cosmeticos 20,422
DIRECT RETAILER OF COSMETICS
1,000,000 Porto Seguro 8,948
AUTO & LIFE INSURANCE
500,000,000 Ultrapar 8,741
SPECIALTY CHEMICALS & LIQUID PROPANE
GAS DISTRIBUTION
280,000 America Latina Logistics 8,290
RAIL OPERATOR IN BRAZIL & ARGENTINA
8,800,000 Caemi 8,249
IRON ORE/KAOLIN PRODUCER
200,000 Diagnosticos (b) 2,710
MEDICAL DIAGNOSTIC SERVICES
- ----------------------------------------------------------------------------
57,360
NUMBER OF SHARES OR
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
>MEXICO: 1.6%
660,000 Grupo Aeroportaurio Del Sureste $ 21,021
CANCUN & COZUMEL AIRPORT OPERATOR
3,000,000 Consorcio ARA 10,358
AFFORDABLE HOUSING BUILDER
1,000,000 URBI Desarrollo (b) 5,490
AFFORDABLE HOUSING BUILDER
- ----------------------------------------------------------------------------
36,869
>ARGENTINA: 1.2%
340,000 Tenaris 26,612
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
>CHILE: 1.1%
160,000 Sociedad Quimica Y Minera
de Chile 16,000
PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM &
IODINE
300,000 CorpBanca 7,830
CONSUMER & SME BANKING
- ----------------------------------------------------------------------------
23,830
-----------
LATIN AMERICA: TOTAL 144,671
TOTAL COMMON STOCKS AND OTHER -----------
EQUITY-LIKE SECURITIES: 96.0% 2,178,670
(COST: $1,527,519)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 3.7%
$ 34,000 Citigroup Funding 3.10% -
Due 7/1/05 34,000
30,000 LaSalle Bank 3.20% - Due 7/5/05 29,989
19,046 Repurchase Agreement with
State Street Bank & Trust dated 6/30/05, due
7/1/05 at 3.00% collateralized by Federal
National Mortgage Association Notes, maturing
3/24/08 market value $19,429 (repurchase
proceeds: $19,048) 19,046
- ----------------------------------------------------------------------------
(AMORTIZED COST: $83,035) 83,035
-----------
TOTAL INVESTMENTS: 99.7% 2,261,705
(COST: $1,610,554)(a)(c)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.3% 6,552
-----------
TOTAL NET ASSETS: 100% $ 2,268,257
============================================================================
41
COLUMBIA ACORN INTERNATIONAL
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
- ----------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At June 30, 2005, for federal income tax purpose cost of investments was
$1,610,554 and net unrealized appreciation was $651,151 consisting of
gross unrealized appreciation of $710,929 and gross unrealized
depreciation of $59,778.
(b) Non-income producing security.
(c) On June 30, 2005, the Fund's total investments were denominated in
currencies as follows:
% OF
TOTAL
CURRENCY VALUE NET ASSETS
=======================================================
Euro $ 863,991 38.1%
British Pounds 264,098 11.6
Japanese Yen 240,249 10.6
US Dollar 197,460 8.7
Other currencies less than
5% of total net assets 695,907 30.7
------------ -----
$ 2,261,705 99.7%
============ =====
1-800-922-6769
42
COLUMBIA ACORN INTERNATIONAL
>PORTFOLIO DIVERSIFICATION (UNAUDITED)
At June 30, 2005, the Fund's portfolio investments as a percent of net assets
was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 108,960 4.8%
Industrial Materials 96,862 4.3
Conglomerates 76,614 3.4
Steel 60,207 2.6
Construction 59,401 2.6
Machinery 51,243 2.3
Specialty Chemicals 48,378 2.1
Outsourcing & Training Services 44,616 2.0
Electrical Components 28,496 1.2
Industrial Distribution 27,194 1.2
- ----------------------------------------------------------------------------
601,971 26.5
>CONSUMER GOODS/SERVICES
Apparels 72,518 3.2
Food 55,704 2.5
Beverages 48,172 2.1
Retail 47,744 2.1
Gaming 35,972 1.6
Other Consumer Services 32,194 1.4
Durables Goods 31,895 1.4
Nondurables 28,525 1.3
Travel 25,739 1.1
Furniture & Textiles 24,692 1.1
Consumer Electronics 11,247 0.5
Casinos 9,323 0.4
Restaurants 7,920 0.4
Consumer Goods Distribution 4,928 0.2
Leisure Products 3,232 0.1
- ----------------------------------------------------------------------------
439,805 19.4
>FINANCE
Banks 150,190 6.6
Other Finance Companies 79,489 3.5
Savings & Loans 33,096 1.5
Insurance 32,327 1.4
Money Management 19,285 0.8
- ----------------------------------------------------------------------------
314,387 13.8
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Computer Hardware &
Related Equipment $ 64,666 2.9%
Business Information &
Marketing Services 35,227 1.6
Satellite Broadcasting 29,803 1.3
Financial Processors 29,194 1.3
Semiconductors &
Related Equipment 27,468 1.2
Business Software 24,321 1.1
Television Broadcasting 22,148 1.0
Instrumentation 20,996 0.9
Internet Related 14,566 0.6
Cable Television 12,155 0.5
Computer Services 11,620 0.5
Electronics Distribution 7,888 0.3
Publishing 6,143 0.3
Contract Manufacturing 2,235 0.1
- ----------------------------------------------------------------------------
308,430 13.6
>ENERGY/MINERALS
Oil Services 71,427 3.1
Mining 50,421 2.2
Oil/Gas Producers 49,520 2.2
Agricultural Commodities 15,511 0.7
Refining/Marketing/Distribution 15,207 0.7
Non-Ferrous Metals 11,947 0.5
Independent Power 1,879 0.1
- ----------------------------------------------------------------------------
215,912 9.5
>HEALTH CARE
Hospital Management 42,548 1.9
Services 32,938 1.5
Pharmaceuticals 30,203 1.3
Medical Equipment 28,048 1.2
Hospital/ Laboratory Supplies 17,786 0.8
- ----------------------------------------------------------------------------
151,523 6.7
>OTHER INDUSTRIES
Transportation 79,160 3.5
Real Estate 35,955 1.6
Regulated Utilities 31,527 1.4
- ----------------------------------------------------------------------------
146,642 6.5
TOTAL COMMON STOCKS AND -------------------------------
OTHER EQUITY-LIKE SECURITIES 2,178,670 96.0
SHORT-TERM OBLIGATIONS 83,035 3.7
-------------------------------
TOTAL INVESTMENTS 2,261,705 99.7
CASH AND OTHER ASSETS
LESS LIABILITIES 6,552 0.3
-------------------------------
NET ASSETS $ 2,268,257 100.0%
============================================================================
43
COLUMBIA ACORN USA
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
INFORMATION
American Tower 40,000 490,000
Navigant Consulting 0 98,300
Novell 1,330,000 1,850,000
Salem Communications 293,100 393,100
SSA Global Technologies 0 218,500
Tellabs 200,000 975,000
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
HNI 60,000 100,000
International Speedway Motors 241,300 271,300
- ----------------------------------------------------------------------------
HEALTH CARE
Advanced Medical Optics 0 94,171
Arrow International 0 100,000
Charles River Laboratories 40,000 220,000
Intermagnetics General 0 75,000
Neurocrine Biosciences 155,000 175,000
Serologicals 0 405,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Layne Christensen 156,700 242,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Genlyte Group 244,000 308,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Nordson 40,100 211,800
Quanta Services 300,000 400,000
Spartech 125,000 287,500
- ----------------------------------------------------------------------------
OTHER INDUSTRIES
Heartland Express 0 87,800
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
INFORMATION
Mediacom Communications 300,000 0
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Urban Outfitters 48,200 0
- ----------------------------------------------------------------------------
HEALTH CARE
CTI Molecular Imaging 245,000 0
VISX 170,600 0
- ----------------------------------------------------------------------------
ENERGY/MINERALS
Equitable Resources 85,600 55,600
Quicksilver Resources 540,000 350,000
Range Resources 75,000 0
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Hub Group 206,000 0
Insurance Auto 41,900 0
1-800-922-6769
44
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS AND OTHER
EQUITY-LIKE SECURITIES: 90.5%
- ----------------------------------------------------------------------------
INFORMATION: 27.4%
>TELECOMMUNICATION SERVICES: 7.3%
652,000 Western Wireless (b) $ 27,580
RURAL CELLULAR PHONE SERVICES
1,005,000 Crown Castle International (b) 20,422
COMMUNICATION TOWERS
333,800 Commonwealth Telephone 13,990
RURAL PHONE FRANCHISES & CLEC
490,000 American Tower (b) 10,300
COMMUNICATION TOWERS IN USA & MEXICO
10,000 Telephone & Data Systems 408
10,000 Telephone & Data Systems Cl. S 383
CELLULAR & TELEPHONE SERVICES
- ----------------------------------------------------------------------------
73,083
>BUSINESS/CONSUMER SOFTWARE: 7.3%
501,200 Micros Systems (b) 22,429
INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS
1,850,000 Novell (b) 11,470
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
974,000 JDA Software Group (b) 11,084
APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS
266,650 Kronos (b) 10,770
LABOR MANAGEMENT SOLUTIONS
473,500 MRO Software (b) 6,918
ENTERPRISE MAINTENANCE SOFTWARE
260,000 Aspect Communications (b) 2,920
CALL CENTER SOFTWARE
218,500 SSA Global Technologies (b) 2,622
ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE
653,200 E.Piphany (b) 2,273
CRM SOFTWARE
60,000 Maximus 2,117
OUTSOURCER FOR GOVERNMENT
- ----------------------------------------------------------------------------
72,603
>COMPUTER HARDWARE/
SEMICONDUCTORS/RELATED
EQUIPMENT: 3.8%
365,300 Integrated Circuit Systems (b) 7,540
SILICON TIMING DEVICES
260,000 Unova (b) 6,924
BARCODE & WIRELESS LAN SYSTEMS
570,000 Symbol Technologies 5,626
MOBILE COMPUTERS & BARCODE SCANNERS
445,000 Entegris (b) 4,406
SEMICONDUCTOR WAGER SHIPPING & HANDLING
PRODUCTS
99,000 Zebra Technologies (b) 4,335
BAR CODE PRINTERS
424,100 SeaChange International (b) 2,977
SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION
100,000 Belden CDT 2,120
SPECIALTY CABLE
70,000 Littelfuse (b) 1,950
LITTLE FUSES
40,000 Rogers (b) 1,622
PCB LAMINATES & HIGH PERFORMANCE FOAMS
- ----------------------------------------------------------------------------
37,500
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BROADCASTING: 2.1%
393,100 Salem Communications (b) $ 7,799
RADIO STATIONS FOR RELIGIOUS PROGRAMMING
695,000 Spanish Broadcasting (b) 6,943
SPANISH LANGUAGE RADIO STATIONS
610,000 Entravision Communications (b) 4,752
SPANISH LANGUAGE TV, RADIO & OUTDOOR
138,500 Gray Television 1,670
MID MARKET AFFILIATED TV STATIONS
- ----------------------------------------------------------------------------
21,164
>TELECOMMUNICATIONS EQUIPMENT: 1.8%
975,000 Tellabs (b) 8,483
TELECOMMUNICATIONS EQUIPMENT
480,000 Andrew (b) 6,125
WIRELESS INFRASTRUCTURE EQUIPMENT
300,000 Symmetricom (b) 3,111
NETWORK TIMING & SYNCHRONIZATION DEVICES
- ----------------------------------------------------------------------------
17,719
>TRANSACTION PROCESSORS: 1.6%
211,640 Global Payments 14,349
CREDIT CARD PROCESSOR
143,100 Pegasus Systems (b) 1,596
TRANSACTION PROCESSOR FOR HOTEL INDUSTRY
- ----------------------------------------------------------------------------
15,945
>BUSINESS INFORMATION/BUSINESS
SERVICES/PUBLISHING: 1.1%
102,800 Getty Images (b) 7,634
PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA
90,000 Ceridian (b) 1,753
HR SERVICES & PAYMENT PROCESSING
98,300 Navigant Consulting (b) 1,736
FINANCIAL CONSULTING FIRM
- ----------------------------------------------------------------------------
11,123
>COMPUTER SERVICES: 0.8%
1,005,500 AnswerThink Consulting (b) 3,570
I/T INTEGRATION & BEST PRACTICE RESEARCH
786,000 RCM Technologies (b)(c) 3,333
TECHNOLOGY ENGINEERING SERVICES
200,000 Igate Capital (b) 716
I/T & BPO OUTSOURCING SERVICES
- ----------------------------------------------------------------------------
7,619
>INTERNET: 0.7%
460,600 DoubleClick (b) 3,864
INTERNET ADVERTISING & DIRECT MARKETING
STATISTICAL DATA
285,000 ValueClick (b) 3,514
INTERNET ADVERTISING
- ----------------------------------------------------------------------------
7,378
>INSTRUMENTATION: 0.4%
90,000 Trimble Navigation (b) 3,507
GPS-BASED INSTRUMENTS
- ----------------------------------------------------------------------------
>ELECTRONICS DISTRIBUTION: 0.3%
60,000 CDW 3,425
TECHNOLOGY RESELLER
- ----------------------------------------------------------------------------
45
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>CONTRACT MANUFACTURING: 0.2%
117,700 Plexus (b) $ 1,675
ELECTRONIC MANUFACTURING SERVICES
- ----------------------------------------------------------------------------
-----------
INFORMATION: TOTAL 272,741
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 18.0%
>RETAIL: 8.0%
285,000 Abercrombie & Fitch 19,579
TEEN APPAREL RETAILER
435,750 Aeropostale (b) 14,641
MALL BASED TEEN RETAILER
360,000 Petco Animal Supplies (b) 10,555
PET SUPPLIES & SERVICES
230,000 Chico's FAS (b) 7,884
WOMEN'S SPECIALTY RETAILER
393,750 Christopher & Banks 7,190
WOMEN'S APPAREL RETAILER
212,500 Ann Taylor (b) 5,159
WOMEN'S APPAREL RETAILER
100,000 Michaels Stores 4,137
CRAFT & HOBBY SPECIALTY RETAILER
95,000 Genesco (b) 3,524
MULTI-CONCEPT BRANDED FOOTWEAR RETAILER
100,000 Sports Authority (b) 3,180
SPORTING GOODS STORES
141,200 Brookstone (b) 2,666
SPECIALTY CONSUMER PRODUCT RETAILER
60,000 West Marine (b) 1,084
LARGEST RETAILER OF BOATING SUPPLIES
- ----------------------------------------------------------------------------
79,599
>CONSUMER SERVICES: 4.0%
396,000 ITT Educational Services (b) 21,154
POSTSECONDARY DEGREE PROGRAMS
435,000 Coinstar (b) 9,870
OWNER/OPERATOR OF COIN COUNTING MACHINES
371,700 Central Parking 5,111
OWNER, OPERATOR & MANAGER OF PARKING LOTS &
GARAGES
60,000 Weight Watchers (b) 3,097
WEIGHT LOSS PROGRAMS
- ----------------------------------------------------------------------------
39,232
>ENTERTAINMENT/LEISURE PRODUCTS: 1.8%
271,300 International Speedway Motors 15,263
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
195,000 Callaway Golf 3,009
PREMIUM GOLF CLUBS & BALLS
- ----------------------------------------------------------------------------
18,272
>APPAREL: 1.7%
194,200 Oxford Industries 8,360
BRANDED & PRIVATE LABEL APPAREL
168,000 Coach (b) 5,640
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
134,000 Steven Madden (b) 2,380
WHOLESALER/RETAILER OF FASHION FOOTWEAR
- ----------------------------------------------------------------------------
16,380
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>NONDURABLES: 1.3%
177,200 Scotts Company (b) $ 12,618
CONSUMER LAWN & GARDEN PRODUCTS
38,900 Prestige Brands (b) 759
OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS
- ----------------------------------------------------------------------------
13,377
>FURNITURE: 1.1%
100,000 HNI 5,115
OFFICE FURNITURE & FIREPLACES
85,000 Herman Miller 2,621
OFFICE FURNITURE
60,000 American Woodmark 1,801
KITCHEN CABINET MANUFACTURER
20,000 Mohawk Industries (b) 1,650
CARPET & FLOORING
- ----------------------------------------------------------------------------
11,187
>FOOD & BEVERAGES: 0.1%
37,000 NBTY (b) 960
VITAMINS & SUPPLEMENTS
- ----------------------------------------------------------------------------
-----------
CONSUMER GOODS/SERVICES: TOTAL 179,007
- ----------------------------------------------------------------------------
HEALTH CARE: 14.2%
>MEDICAL EQUIPMENT: 5.4%
573,000 Edwards Lifesciences (b) 24,650
HEART VALVES
221,300 Diagnostic Products 10,474
IMMUNODIAGNOSTIC KITS
220,000 Viasys Healthcare (b) 4,970
RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT
94,171 Advanced Medical Optics (b) 3,743
MEDICAL DEVICES FOR EYE CARE
115,700 ICU Medical (b) 3,722
INTRAVENOUS THERAPY PRODUCTS
100,000 Arrow International 3,190
DISPOSABLE CATHETERS
75,000 Intermagnetics General (b) 2,307
MRI EQUIPMENT
- ----------------------------------------------------------------------------
53,056
>SERVICES: 4.8%
220,000 Charles River Laboratories (b) 10,615
PHARMACEUTICAL RESEARCH
246,800 Lincare Holdings (b) 10,079
HOME HEALTH CARE SERVICES
133,250 Coventry Health Care (b) 9,427
PPO NETWORK
405,000 Serologicals (b) 8,606
BLOOD COLLECTION & ANTIBODY PRODUCTION
423,800 NDCHealth Group 7,616
HEALTH CLAIMS PROCESSING & DRUG MARKETING
SERVICES
100,000 Dendrite International (b) 1,380
SOFTWARE FOR PHARMACEUTICAL SALES FORCE
- ----------------------------------------------------------------------------
47,723
1-800-922-6769
46
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>BIOTECHNOLOGY/DRUG DELIVERY: 2.2%
175,000 Neurocrine Biosciences (b) $ 7,361
DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS
360,000 Nektar Therapeutics (b) 6,062
DRUG DELIVERY TECHNOLOGIES
260,000 AtheroGenics (b) 4,155
DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID
ARTHRITIS, ASTHMA
315,000 Ligand Pharmaceuticals (b) 2,189
DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, &
DIABETES
300,000 Lexicon Genetics (b) 1,482
DRUG DISCOVERY
375,000 Locus Discovery, Series D, Pfd. (d)(e) 750
HIGH THROUGHPUT RATIONAL DRUG DESIGN
363,636 Metabolex, Series F (d)(e) 53
DRUGS FOR DIABETES
- ----------------------------------------------------------------------------
22,052
>MEDICAL SUPPLIES: 1.0%
222,800 Techne (b) 10,229
CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE
SCIENCES
- ----------------------------------------------------------------------------
>PHARMACEUTICALS: 0.8%
245,500 Par Pharmaceuticals (b) 7,809
GENERICS
- ----------------------------------------------------------------------------
-----------
HEALTH CARE: TOTAL 140,869
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 11.8%
>OIL SERVICES: 6.1%
635,000 Chicago Bridge & Iron 14,516
ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS
& LNG
401,700 FMC Technologies (b) 12,842
OIL & GAS WELL HEAD MANUFACTURER
300,000 Pride International (b) 7,710
OFFSHORE DRILLING CONTRACTOR
941,000 Newpark Resources (b) 7,058
DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY
242,000 Layne Christensen (b) 4,807
WATER/MINERAL DRILLER & COAL SEAM GAS PRODUCER
355,000 Hanover Compressor (b) 4,086
NATURAL GAS COMPRESSOR RENTAL
266,800 Pioneer Drilling (b) 4,071
OIL & GAS WELL DRILLER
51,000 Carbo Ceramics 4,027
NATURAL GAS WELL STIMULANTS
135,000 Key Energy Services (b) 1,634
OIL & GAS WELL WORKOVER SERVICES
- ----------------------------------------------------------------------------
60,751
>OIL & GAS PRODUCERS: 4.0%
350,000 Quicksilver Resources (b) 22,376
NATURAL GAS & COAL SEAM GAS PRODUCER
272,000 Western Gas 9,493
OIL & COAL SEAM GAS PRODUCER
104,200 Southwestern Energy (b) 4,895
NATURAL GAS PRODUCER
450,000 Vaalco Energy (b) 1,557
OIL & GAS PRODUCER
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>OIL & GAS PRODUCERS--CONTINUED
70,000 McMoran Exploration (b) $ 1,366
NATURAL GAS PRODUCERS & LNG DEVELOPER
- ----------------------------------------------------------------------------
39,687
>DISTRIBUTION/MARKETING/REFINING: 1.7%
245,000 Oneok 7,999
NATURAL GAS UTILITY, MARKETING & PROCESSING
193,000 Atmos Energy 5,558
NATURAL GAS UTILITY
55,600 Equitable Resources 3,781
NATURAL GAS PRODUCER & UTILITY
- ----------------------------------------------------------------------------
17,338
-----------
ENERGY/MINERALS: TOTAL 117,776
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 9.7%
>MACHINERY: 5.0%
282,000 Esco Technologies (b) 28,426
FILTRATION & TEST EQUIPMENT
194,000 Pentair 8,305
PUMPS, WATER TREATMENT & TOOLS
211,800 Nordson 7,261
DISPENSING SYSTEMS FOR ADHESIVES & COATINGS
110,000 Ametek 4,603
AEROSPACE/INDUSTRIAL INSTRUMENTS
50,000 Kaydon 1,392
SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS
- ----------------------------------------------------------------------------
49,987
>INDUSTRIAL GOODS: 1.6%
308,000 Genlyte Group (b) 15,012
COMMERCIAL LIGHTING FIXTURES
25,000 Donaldson 758
INDUSTRIAL AIR FILTRATION
- ----------------------------------------------------------------------------
15,770
>WATER: 1.0%
134,000 Cuno (b) 9,573
FILTRATION & FLUIDS CLARIFICATION
- ----------------------------------------------------------------------------
>CONSTRUCTION: 0.8%
112,700 Florida Rock Industries 8,267
CONCRETE & AGGREGATES
- ----------------------------------------------------------------------------
>SPECIALTY CHEMICALS/INDUSTRIAL
MATERIALS: 0.5%
287,500 Spartech 5,118
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
>OUTSOURCING SERVICES: 0.4%
400,000 Quanta Services (b) 3,520
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ----------------------------------------------------------------------------
>INDUSTRIAL DISTRIBUTION: 0.3%
113,000 Nuco2 (b) 2,901
BULK CO2 GAS DISTRIBUTION TO RESTAURANTS
- ----------------------------------------------------------------------------
47
COLUMBIA ACORN USA
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>INDUSTRIAL SERVICES: 0.1%
95,000 Clark $ 1,361
EXECUTIVE COMPENSATION & BENEFITS CONSULTING
- ----------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 96,497
- ----------------------------------------------------------------------------
FINANCE: 8.7%
>FINANCE COMPANIES: 4.4%
1,091,500 AmeriCredit (b) 27,833
AUTO LENDING
520,200 World Acceptance (b) 15,632
PERSONAL LOANS
- ----------------------------------------------------------------------------
43,465
>INSURANCE: 2.6%
430,000 HCC Insurance Holdings 16,284
SPECIALTY INSURANCE
14,000 Markel (b) 4,746
SPECIALTY INSURANCE
35,000 Philadelphia Consolidated Holding (b) 2,967
SPECIALTY INSURANCE
91,000 United America Indemnity (b) 1,564
SPECIALTY INSURANCE
- ----------------------------------------------------------------------------
25,561
>BANKS: 1.3%
263,000 TCF Financial 6,806
GREAT LAKES BANK
197,656 Chittenden 5,376
VERMONT & WESTERN MASSACHUSETTS BANK
20,000 First Financial BankShares 677
WEST TEXAS BANK
30,000 West Bancorporation 564
DES MOINES COMMERCIAL BANK
- ----------------------------------------------------------------------------
13,423
>SAVINGS & LOAN: 0.4%
116,400 Anchor Bancorp Wisconsin 3,522
WISCONSIN THRIFT
- ----------------------------------------------------------------------------
-----------
FINANCE: TOTAL 85,971
- ----------------------------------------------------------------------------
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
OTHER INDUSTRIES: 0.7%
>REAL ESTATE: 0.2%
100,000 Crescent Real Estate Equities $ 1,875
CLASS A OFFICE BUILDINGS
35,000 Highland Hospitality 366
HOTEL REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------------------------------
2,241
>REGULATED UTILITIES: 0.2%
90,000 Northeast Utilities 1,877
REGULATED ELECTRIC UTILITY
- ----------------------------------------------------------------------------
>LOGISTICS: 0.2%
87,800 Heartland Express 1,706
REGIONAL DRY VAN TRUCKER
- ----------------------------------------------------------------------------
>WASTE MANAGEMENT: 0.1%
42,800 Waste Connections (b) 1,596
SOLID WASTE MANAGEMENT
- ----------------------------------------------------------------------------
-----------
OTHER INDUSTRIES: TOTAL 7,420
-----------
TOTAL COMMON STOCKS AND OTHER 900,281
EQUITY-LIKE SECURITIES: 90.5%
(COST: $601,302)
SHORT-TERM OBLIGATIONS: 9.8%
$ 33,000 Citigroup Funding 3.10% -
Due 7/1/05 33,000
33,000 LaSalle Bank 3.20% - Due 7/5/05 32,989
28,000 Verizon Network 3.26% -
Due 7/8/05 27,982
3,283 Repurchase Agreement with State
Street Bank & Trust dated 6/30/05, due
7/01/05 at 3.00% collateralized by Federal
Home Loan Mortgage Association Notes,
maturing 3/24/08 market value $3,351
(repurchase proceeds: $3,283) 3,283
- ----------------------------------------------------------------------------
(AMORTIZED COST: $97,254) 97,254
-----------
TOTAL INVESTMENTS: 100.3% 997,535
(COST: $698,556)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: (0.3)% (3,136)
-----------
TOTAL NET ASSETS: 100% $ 994,399
============================================================================
1-800-922-6769
48
- --------------------------------------------------------------------------------
>Notes to Statement of Investments (in thousands)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$698,556 and net unrealized appreciation was $298,979 consisting of gross
unrealized appreciation of $332,259 and gross unrealized depreciation of
$33,280.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On June 30, 2005, the Fund held
five percent or more of the outstanding voting securities of the following
companies:
RCM Technologies 6.90%
The aggregate cost and value of this company at June 30, 2005, was $5,636
and $3,333, respectively. Investments in affiliate companies represent
0.3% of total net assets at June 30, 2005. Investment activity and income
amounts relating to affiliates during the six months ended June 30, 2005,
were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (622)
Purchases $ --
Proceeds from sales $ --
(d) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At June 30, 2005, these securities were
illiquid. At June 30, 2005, these securities (in thousands) amounted to
$803 which represents 0.1% of total net assets.
Additional information on these securities is as follows:
ACQUISITION
SECURITY DATES SHARES (000) COST (000) VALUE (000)
- --------------------------------------------------------------------------------------
Locus Discovery, Series D, Pfd. 09/05/01 375 $1,500 $ 750
Metabolex, Series F 05/11/00 364 2,000 53
------ -----
$3,500 $ 803
====== =====
(e) Represents fair value as determined in good faith under procedures by the
Board of Trustees.
49
COLUMBIA ACORN INTERNATIONAL SELECT
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Compass Group 220,000 400,000
Grafton Group (Ireland) 70,000 105,000
William Hill 0 80,000
>SWITZERLAND
BKW Energie 0 11,200
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
>SWEDEN
Gambro 0 38,900
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Ito En 12,000 32,800
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
EUROPE
>UNITED KINGDOM/IRELAND
Anglo Irish Bank (Ireland) 282,442 244,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
>ITALY
Autogrill 70,000 0
- ----------------------------------------------------------------------------
ASIA
>JAPAN
Fast Retailing 11,500 0
Olympus Optical 23,000 0
- ----------------------------------------------------------------------------
OTHER COUNTRIES
>CANADA
Noranda 50,000 0
1-800-922-6769
50
COLUMBIA ACORN INTERNATIONAL SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 95.7%
- ----------------------------------------------------------------------------
EUROPE: 60.3%
>UNITED KINGDOM/IRELAND: 22.4%
244,000 Anglo Irish Bank (Ireland) $ 3,022
SMALL BUSINESS & MIDDLE MARKET BANKING
192,000 Exel 2,907
GLOBAL LOGISTICS & FREIGHT FORWARDING
132,000 Depfa Bank (Ireland) 2,109
INTERNATIONAL PUBLIC SECTOR FINANCE
130,000 IAWS (Ireland) 1,816
MANUFACTURER OF BAKED GOODS
400,000 Compass Group 1,678
INTERNATIONAL CONCESSION & CONTRACT CATERER
105,000 Grafton Group (Ireland) (b) 1,215
BUILDING MATERIALS, WHOLESALING & DIY RETAILING
80,000 William Hill 770
LARGEST BOOKMAKER
80,000 British Sky Broadcasting 754
DIGITAL SATELLITE BROADCASTING
40,000 Intermediate Capital 746
EUROPEAN PROVIDER OF MEZZANINE CAPITAL
25,000 Kerry (Ireland) 617
FOOD INGREDIENTS
17,000 Cobham 431
AEROSPACE COMPONENTS
- ----------------------------------------------------------------------------
16,065
>FRANCE/BELGIUM: 13.2%
33,000 Neopost 2,900
POSTAGE METER MACHINES
170,000 SES Global 2,559
SATELLITE BROADCASTING SERVICES
27,000 Imerys 1,856
INDUSTRIAL MINERALS PRODUCER
34,000 Belgacom (Belgium) 1,158
TELECOM SERVICE PROVIDER
14,500 Essilor International 987
EYEGLASS LENSES
- ----------------------------------------------------------------------------
9,460
>SWITZERLAND: 12.1%
10,200 Kuehne & Nagel 2,157
FREIGHT FORWARDING/LOGISTICS
14,000 Swatch Group 1,959
WATCH & ELECTRONICS MANUFACTURER
1,900 Geberit International 1,212
PLUMBING SUPPLIES
10,000 Synthes 1,094
PRODUCTS FOR ORTHOPEDIC SURGERY
2,300 Schindler 828
ELEVATOR MANUFACTURER & SERVICE PROVIDER
11,200 BKW Energie 700
ELECTRIC UTILITY
1,200 Givaudan 696
INDUSTRIAL FRAGRANCES & FLAVORS
- ----------------------------------------------------------------------------
8,646
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>NORWAY: 3.6%
157,500 Den Norske Bank $ 1,632
LARGEST NORWEGIAN BANK
26,000 Orkla 953
FOOD & DIVERSIFIED CONSUMER GOODS
- ----------------------------------------------------------------------------
2,585
>CZECH REPUBLIC: 2.9%
16,840 Komercni Banka 2,109
LEADING CZECH UNIVERSAL BANK
- ----------------------------------------------------------------------------
>SPAIN: 2.8%
73,000 Red Electrica 2,015
SPANISH POWER GRID
- ----------------------------------------------------------------------------
>GERMANY: 2.6%
13,000 Deutsche Boerse 1,014
TRADING, CLEARING & SETTLEMENT SERVICES
FOR FINANCIAL MARKETS
12,000 Rhoen-Klinikum 830
HOSPITAL MANAGEMENT
- ----------------------------------------------------------------------------
1,844
>SWEDEN: 0.7%
38,900 Gambro 519
PRODUCTS/SERVICES FOR RENAL CARE
- ----------------------------------------------------------------------------
-----------
EUROPE: TOTAL 43,243
- ----------------------------------------------------------------------------
ASIA: 23.7%
>JAPAN: 17.4%
68,000 Shimano 1,930
BICYCLE COMPONENTS & FISHING TACKLE
16,200 Hoya 1,861
OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES
48,000 Daito Trust Construction 1,792
APARTMENT BUILDER
32,800 Ito En 1,682
BOTTLED TEA & OTHER BEVERAGES
1,627 Jupiter Telecommunications (b) 1,367
LARGEST CABLE SERVICE PROVIDER IN JAPAN
77,000 Ushio 1,365
INDUSTRIAL LIGHT SOURCES
11,000 Funai Electric 1,125
CONSUMER ELECTRONICS
181,800 Hiroshima Bank 826
REGIONAL BANK
94,000 Bank of Yokohama 540
REGIONAL BANK
- ----------------------------------------------------------------------------
12,488
>HONG KONG/CHINA: 4.1%
650,000 Hong Kong Exchanges & Clearing 1,684
HONG KONG EQUITY & DERIVATIVES OPERATOR
2,000,000 Global Bio-Chem Technology
Group (China) 1,239
REFINER OF CORN-BASED COMMODITIES
- ----------------------------------------------------------------------------
2,923
51
COLUMBIA ACORN INTERNATIONAL SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>SINGAPORE: 2.2%
1,600,000 Comfort Del Gro $ 1,599
TAXI & MASS TRANSIT SERVICE
- ----------------------------------------------------------------------------
-----------
ASIA: TOTAL 17,010
- ----------------------------------------------------------------------------
OTHER COUNTRIES: 7.7%
>CANADA: 5.0%
300,000 Kinross Gold (b) 1,833
GOLD MINING
47,000 Talisman Energy 1,758
OIL & GAS PRODUCER
- ----------------------------------------------------------------------------
3,591
>AUSTRALIA: 2.7%
330,000 Lion Nathan 1,897
BEER BREWER/DISTRIBUTOR
- ----------------------------------------------------------------------------
-----------
OTHER: TOTAL 5,488
- ----------------------------------------------------------------------------
LATIN AMERICA: 4.0%
>ARGENTINA: 4.0%
37,000 Tenaris 2,896
STEEL PIPE FOR OIL WELLS & PIPELINES
- ----------------------------------------------------------------------------
-----------
LATIN AMERICA: TOTAL 2,896
-----------
TOTAL COMMON STOCKS: 95.7% 68,637
(COST: $53,994)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATION: 4.3%
$ 3,087 Repurchase Agreement with
State Street Bank & Trust
dated 6/30/05, due 7/1/05
at 3.00% collateralized by
Federal National Mortgage
Association Notes, maturing
3/24/08 market value
$3,149 (repurchase
proceeds: $3,087) $ 3,087
- ----------------------------------------------------------------------------
(COST: $3,087) 3,087
-----------
TOTAL INVESTMENTS: 100.0% 71,724
(COST: $57,081)(a)(c)
CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (14)
-----------
TOTAL NET ASSETS: 100% $ 71,710
============================================================================
- --------------------------------------------------------------------------------
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purpose cost of investments was
$57,081 and net unrealized appreciation was $14,643 consisting of gross
unrealized appreciation of $16,972 and gross unrealized depreciation of
$2,329.
(b) Non-income producing security.
(c) On June 30, 2005, the Fund's total investments were denominated in
currencies as follows:
% OF
TOTAL
CURRENCY VALUE NET ASSETS
------------------------------------------------
Euro $22,098 30.8%
Japanese Yen 12,488 17.4
Swiss Franc 8,646 12.1
British Pounds 7,285 10.2
US Dollar 5,983 8.3
Canadian Dollar 3,591 5.0
Other currencies less
than 5% of total
net assets 11,633 16.2
------- -----
$71,724 100.0%
======= =====
1-800-922-6769
52
COLUMBIA ACORN INTERNATIONAL SELECT
>PORTFOLIO DIVERSIFICATION (UNAUDITED)
At June 30, 2005, the Fund's portfolio investments as a percent of net assets
was diversified as follows:
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INDUSTRIAL GOODS/SERVICES
Other Industrial Services $ 5,892 8.2%
Industrial Materials 3,068 4.3
Machinery 2,900 4.1
Steel 2,896 4.0
Electrical Components 1,796 2.5
Construction 1,792 2.5
Industrial Distribution 1,215 1.7
Specialty Chemicals 696 1.0
- ----------------------------------------------------------------------------
20,255 28.3
>CONSUMER GOODS/SERVICES
Durable Goods 3,889 5.4
Beverages 3,579 5.0
Food 2,433 3.4
Restaurants 1,678 2.3
Consumer Electronics 1,125 1.6
Non-Durables 953 1.3
Gaming 770 1.1
- ----------------------------------------------------------------------------
14,427 20.1
>FINANCE
Banks 10,238 14.3
Other Finance Companies 746 1.0
- ----------------------------------------------------------------------------
10,984 15.3
VALUE (000) PERCENT
- ----------------------------------------------------------------------------
>INFORMATION
Financial Processors $ 2,698 3.8%
Satellite Broadcasting and
Services 2,559 3.6
Semiconductors and Related
Equipment 1,861 2.6
Cable Television 1,367 1.9
Telephone Services 1,158 1.6
Television Broadcasting 754 1.0
- ----------------------------------------------------------------------------
10,397 14.5
>ENERGY/MINERALS
Non-Ferrous Metals 1,833 2.6
Oil/Gas Producers 1,758 2.4
Agricultural Commodities
(includes Forestry) 1,239 1.7
- ----------------------------------------------------------------------------
4,830 6.7
>HEALTH CARE
Medical Equipment 2,081 2.9
Hospital Management 830 1.2
HealthCare Services 519 0.7
- ----------------------------------------------------------------------------
3,430 4.8
>OTHER INDUSTRIES
Regulated Utilities 2,715 3.8
Transportation 1,599 2.2
- ----------------------------------------------------------------------------
4,314 6.0
-------------------------------
TOTAL COMMON STOCKS 68,637 95.7
SHORT-TERM OBLIGATION 3,087 4.3
-------------------------------
TOTAL INVESTMENTS 71,724 100.0
CASH AND OTHER ASSETS
LESS LIABILITIES (14) 0.0
-------------------------------
NET ASSETS $ 71,710 100.0%
============================================================================
53
COLUMBIA ACORN SELECT
>MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED)
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
ADDITIONS
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Coach 1,260,000 1,400,000
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Costco 820,000 845,000
ITT Educational Services 1,451,000 1,550,000
International Speedway Motors 550,000 670,000
- ----------------------------------------------------------------------------
INFORMATION
American Tower 2,300,000 2,350,000
Aspect Communications 2,074,700 2,182,000
CDW 525,000 690,000
Novell 4,000,000 5,000,000
Tellabs 8,100,000 8,900,000
Tribune Company 0 490,000
- ----------------------------------------------------------------------------
FINANCE
Conseco 0 1,800,000
Nuveen Investments 0 975,000
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES
Mine Safety Appliances 0 850,000
Quanta Services 1,576,000 2,810,000
Spartech 0 173,000
Worthington Industries 0 2,000,000
- ----------------------------------------------------------------------------
ENERGY/MINERALS
FMC Technologies 400,000 450,000
Pride International 1,654,000 1,854,000
NUMBER OF SHARES
-----------------------------
03/31/05 06/30/05
SALES
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES
Herman Miller 1,160,000 471,032
- ----------------------------------------------------------------------------
INFORMATION
FTI Consulting 925,000 143,200
McAfee 2,539,900 0
Moodys 940,000 0
(INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT)
Synopsys 860,000 0
1-800-922-6769
54
COLUMBIA ACORN SELECT
>STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
COMMON STOCKS: 90.6%
- ----------------------------------------------------------------------------
CONSUMER GOODS/SERVICES: 29.4%
>RETAIL: 11.4%
3,000,000 Safeway $ 67,770
RETAIL FOOD & DRUG STORES
975,000 Abercrombie & Fitch 66,982
TEEN APPAREL RETAILER
845,000 Costco 37,873
WAREHOUSE SUPERSTORES
- ----------------------------------------------------------------------------
172,625
>CONSUMER SERVICES: 8.0%
1,550,000 ITT Educational Services (b) 82,801
POSTSECONDARY DEGREE PROGRAMS
728,000 Weight Watchers (b) 37,572
WEIGHT LOSS PROGRAM
- ----------------------------------------------------------------------------
120,373
>FURNITURE & MANUFACTURERS: 4.1%
1,400,000 Coach (b) 46,998
DESIGNER & RETAILER OF BRANDED LEATHER
ACCESSORIES
471,032 Herman Miller 14,527
OFFICE FURNITURE
- ----------------------------------------------------------------------------
61,525
>LEISURE VEHICLES: 3.4%
1,050,000 Harley-Davidson 52,080
MOTORCYCLES & RELATED MERCHANDISE
- ----------------------------------------------------------------------------
>ENTERTAINMENT: 2.5%
670,000 International Speedway Motors 37,694
LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR
- ----------------------------------------------------------------------------
-----------
CONSUMER GOODS/SERVICES: TOTAL 444,297
- ----------------------------------------------------------------------------
INFORMATION: 26.3%
>TELECOMMUNICATIONS EQUIPMENT: 5.1%
8,900,000 Tellabs (b) 77,430
TELECOMMUNICATIONS EQUIPMENT
- ----------------------------------------------------------------------------
>BUSINESS SOFTWARE: 3.7%
5,000,000 Novell (b) 31,000
DIRECTORY, OPERATING SYSTEM & IDENTITY
MANAGEMENT SOFTWARE
2,182,000 Aspect Communications (b) 24,504
CALL CENTER SOFTWARE
- ----------------------------------------------------------------------------
55,504
>INTERNET: 3.5%
9,600,000 Skillsoft Publishing (b)(c) 33,120
PROVIDER OF WEB-BASED LEARNING SOLUTIONS
(E-LEARNING)
820,000 IAC/Interactive Corp (b) 19,721
DOMINATE INTERNET MIDDLEMAN
- ----------------------------------------------------------------------------
52,841
>MOBILE COMMUNICATIONS: 3.3%
2,350,000 American Tower (b) 49,397
COMMUNICATION TOWERS IN USA & MEXICO
- ----------------------------------------------------------------------------
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
>TELEVISION PROGRAMMING/CATV: 2.8%
896,350 Liberty Global (formerly known
as Liberty Media International) (b) $ 41,833
CATV HOLDING COMPANY
- ----------------------------------------------------------------------------
>ELECTRONICS DISTRIBUTION: 2.6%
690,000 CDW 39,392
TECHNOLOGY RESELLER
- ----------------------------------------------------------------------------
>INSTRUMENTATION: 2.1%
1,400,000 Tektronix 32,578
ANALYTICAL INSTRUMENTS
- ----------------------------------------------------------------------------
>BUSINESS INFORMATION: 1.5%
537,800 Fair Isaac 19,630
CREDIT SCORING & DECISION ANALYTIC SOFTWARE
143,200 FTI Consulting (b) 2,993
FINANCIAL CONSULTING FIRM
- ----------------------------------------------------------------------------
22,623
>PUBLISHING: 1.1%
490,000 Tribune Company 17,238
NEWSPAPERS & TV STATIONS
- ----------------------------------------------------------------------------
>COMPUTER SERVICES: 0.6%
2,445,000 AnswerThink Consulting (b)(c) 8,680
I/T INTEGRATION & BEST PRACTICE RESEARCH
- ----------------------------------------------------------------------------
-----------
INFORMATION: TOTAL 397,516
- ----------------------------------------------------------------------------
FINANCE: 17.1%
>MONEY MANAGEMENT: 6.7%
2,500,000 Janus Capital 37,600
MANAGES MUTUAL FUNDS
975,000 Nuveen Investments 36,680
SPECIALTY MUTUAL FUNDS
729,500 SEI Investments 27,247
MUTUAL FUND ADMINISTRATION & INVESTMENT
MANAGEMENT
- ----------------------------------------------------------------------------
101,527
>INSURANCE: 5.3%
120,000 Markel (b) 40,680
SPECIALTY INSURANCE
1,800,000 Conseco (b) 39,276
INDIVIDUAL LIFE INSURANCE & ANNUITY PRODUCTS
- ----------------------------------------------------------------------------
79,956
>BANKS: 5.1%
1,970,000 TCF Financial 50,984
GREAT LAKES BANK
750,000 Associated Banc-Corp 25,245
MIDWEST BANK
- ----------------------------------------------------------------------------
76,229
-----------
FINANCE: TOTAL 257,712
- ----------------------------------------------------------------------------
55
NUMBER OF SHARES VALUE (000)
- ----------------------------------------------------------------------------
INDUSTRIAL GOODS/SERVICES: 8.7%
>INDUSTRIAL GOODS: 2.6%
850,000 Mine Safety Appliances $ 39,270
SAFETY EQUIPMENT
- ----------------------------------------------------------------------------
>LOGISTICS: 2.2%
661,000 Expeditors International
of Washington 32,924
INTERNATIONAL FREIGHT FORWARDER
- ----------------------------------------------------------------------------
>STEEL: 2.1%
2,000,000 Worthington Industries 31,600
STEEL PROCESSING
- ----------------------------------------------------------------------------
>OUTSOURCING SERVICES & TRAINING: 1.6%
2,810,000 Quanta Services (b) 24,728
ELECTRICAL & TELECOM CONSTRUCTION SERVICES
- ----------------------------------------------------------------------------
>SPECIALTY CHEMICALS & INDUSTRIAL
MATERIALS: 0.2%
173,000 Spartech 3,079
PLASTICS DISTRIBUTION & COMPOUNDING
- ----------------------------------------------------------------------------
-----------
INDUSTRIAL GOODS/SERVICES: TOTAL 131,601
- ----------------------------------------------------------------------------
HEALTH CARE: 5.0%
>SERVICES: 5.0%
530,000 Coventry Health Care (b) 37,497
PPO NETWORK
910,000 Lincare Holdings (b) 37,164
HOME HEALTH CARE SERVICES
- ----------------------------------------------------------------------------
74,661
-----------
HEALTH CARE: TOTAL 74,661
- ----------------------------------------------------------------------------
ENERGY/MINERALS: 4.1%
>OIL SERVICES: 4.1%
1,854,000 Pride International (b) 47,648
OFFSHORE DRILLING CONTRACTOR
450,000 FMC Technologies (b) 14,386
OIL & GAS WELL HEAD MANUFACTURER
- ----------------------------------------------------------------------------
62,034
-----------
ENERGY & MINERALS: TOTAL 62,034
-----------
TOTAL COMMON STOCKS: 90.6% 1,367,821
(COST: $1,146,802)
PRINCIPAL AMOUNT (000) VALUE (000)
- ----------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS: 8.3%
$ 32,000 Toyota Motor Credit 3.25% -
Due 7/6/05 $ 31,985
30,000 General Electric Capital 3.25% -
Due 7/7/05 29,984
26,000 Prudential Funding 3.10% -
Due 7/1/05 26,000
26,000 LaSalle Bank 3.20% - Due 7/5/05 25,991
11,354 Repurchase Agreement with
State Street Bank & Trust dated 6/30/05,
due 7/1/05 at 3.00% collateralized by
Federal National Mortgage Association Notes,
maturing 3/24/08 market value $11,583
(repurchase proceeds: $11,355) 11,354
- ----------------------------------------------------------------------------
(AMORTIZED COST: $125,314) 125,314
-----------
TOTAL INVESTMENTS: 98.9% 1,493,135
(COST: $1,272,116)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: 1.1% 17,357
-----------
TOTAL NET ASSETS: 100% $ 1,510,492
============================================================================
>NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$1,272,116 and net unrealized appreciation was $221,019 consisting of
gross unrealized appreciation of $262,819 and gross unrealized
depreciation of $41,800.
(b) Non-income producing security.
(c) An affiliate may include any company in which the Fund owns five percent
or more of its outstanding voting shares. On June 30, 2005, the Fund held
five percent or more of the outstanding voting securities of the following
companies:
Skillsoft Publishing 8.98%
AnswerThink Consulting 5.69
The aggregate cost and value of these companies at June 30, 2005, was
$71,464 and $41,800 respectively. Investments in affiliate companies
represent 2.8% of total net assets at June 30, 2005. Investment activity
and income amounts relating to affiliates during the six months ended June
30, 2005, were as follows:
Dividend Income $ --
Net realized gain or loss $ --
Change in unrealized gain or loss $ (22,985)
Purchases $ 13,030
Proceeds from sales $ --
1-800-922-6769
56
COLUMBIA ACORN FAMILY OF FUNDS
> STATEMENTS OF ASSETS AND LIABILITIES
> STATEMENTS OF OPERATIONS
> STATEMENTS OF CHANGES IN NET ASSETS
> FINANCIAL HIGHLIGHTS
> NOTES TO FINANCIAL STATEMENTS
57
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
COLUMBIA COLUMBIA COLUMBIA
ACORN ACORN ACORN
JUNE 30, 2005 FUND INTERNATIONAL USA
- ---------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at cost $ 7,516,154 $ 1,610,554 $ 692,920
Affiliated investments, at cost (See Note 4) 1,549,261 -- 5,636
- ---------------------------------------------------------------------------------------------------------------------------------
Unaffiliated investments, at value $ 12,511,138 $ 2,261,705 $ 994,202
Affiliated investments, at value (See Note 4) 1,988,672 -- 3,333
Cash 1 --* --*
Foreign currency (cost: Columbia Acorn Fund $2,163;
Columbia Acorn International $1,853; Columbia
Acorn International Select $44) 2,150 1,850 --
Receivable for:
Investments sold 22,839 19,931 --
Fund shares sold 21,664 2,402 1,275
Dividends and interest 7,263 4,474 191
Payment on a liquidated security 161 -- 54
Foreign tax reclaims 1,020 839 4
Deferred Trustees' Compensation Investments 1,362 419 95
- ---------------------------------------------------------------------------------------------------------------------------------
Total Assets 14,556,270 2,291,620 999,154
LIABILITIES:
Expense reimbursement due to Investment Adviser -- -- --
Payable for:
Investments purchased 21,915 18,883 2,652
Fund shares redeemed 16,061 1,752 888
Management fee 7,487 1,464 704
Administration fee 520 82 34
12b-1 Service & Distribution fees 2,579 86 110
Reports to shareholders 1,695 321 146
Deferred Trustees' fees 1,362 419 95
Transfer agent fees 594 87 38
Trustees' fees 42 -- --
Custody fees 23 81 2
Deferred foreign capital gains tax payable -- 2 --
Other liabilities 1,185 186 86
- ---------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 53,463 23,363 4,755
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399
=================================================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 8,620,923 $ 1,570,855 $ 666,167
Undistributed (Overdistributed) net investment
income (Accumulated net investment loss) 7,920 3,915 1,568
Accumulated net realized gain (loss) 439,517 42,430 27,631
Net unrealized appreciation (depreciation) on:
Investments 5,434,395 651,151 298,979
Foreign currency translations (109) (91) --
Foreign capital gains tax -- (3) --
Liquidated security 161 -- 54
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399
=================================================================================================================================
Net asset value per share -
Class A (a) $ 26.21 $ 29.23 $ 25.73
(Net assets/shares) ($2,852,237/108,814) ($88,608/3,032) ($126,647/4,923)
Maximum offering price per share -
Class A (b) $ 27.81 $ 31.01 $ 27.30
(Net asset value per share/
front-end sales charge) ($26.21/0.9425) ($29.23/0.9425) ($25.73/0.9425)
Net asset value and offering price
per share - Class B (a) $ 25.37 $ 28.74 $ 24.97
(Net assets/shares) ($1,365,518/53,831) ($60,364/2,100) ($71,766/2,874)
Net asset value and offering price
per share - Class C (a) $ 25.35 $ 28.73 $ 24.96
(Net assets/shares) ($1,102,416/43,491) ($35,220/1,226) ($41,376/1,657)
Net asset value and offering price
per share - Class Z (a) $ 26.79 $ 29.46 $ 26.21
(Net assets/shares) ($9,182,636/342,777) ($2,084,065/70,732) ($754,610/28,787)
COLUMBIA COLUMBIA
ACORN ACORN
JUNE 30, 2005 INTERNATIONAL SELECT SELECT
- -------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at cost $ 57,081 $ 1,200,652
Affiliated investments, at cost (See Note 4) -- 71,464
- -------------------------------------------------------------------------------------------------------
Unaffiliated investments, at value $ 71,724 $ 1,451,335
Affiliated investments, at value (See Note 4) -- 41,800
Cash 1 1
Foreign currency (cost: Columbia Acorn Fund $2,163;
Columbia Acorn International $1,853; Columbia
Acorn International Select $44) 44 --
Receivable for:
Investments sold -- 12,593
Fund shares sold 101 8,263
Dividends and interest 90 242
Payment on a liquidated security -- --
Foreign tax reclaims 39 --
Deferred Trustees' Compensation Investments -- --
- -------------------------------------------------------------------------------------------------------
Total Assets 71,999 1,514,234
LIABILITIES:
Expense reimbursement due to Investment Adviser 1 --
Payable for:
Investments purchased 149 436
Fund shares redeemed 9 1,555
Management fee 55 971
Administration fee 2 52
12b-1 Service & Distribution fees 7 381
Reports to shareholders 37 205
Deferred Trustees' fees 12 47
Transfer agent fees 5 63
Trustees' fees 3 --
Custody fees -- 3
Deferred foreign capital gains tax payable -- --
Other liabilities 9 29
- -------------------------------------------------------------------------------------------------------
Total Liabilities 289 3,742
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 71,710 $ 1,510,492
=======================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 88,128 $ 1,260,521
Undistributed (Overdistributed) net investment
income (Accumulated net investment loss) (554) (3,585)
Accumulated net realized gain (loss) (30,502) 32,537
Net unrealized appreciation (depreciation) on:
Investments 14,643 221,019
Foreign currency translations (5) --
Foreign capital gains tax -- --
Liquidated security -- --
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 71,710 $ 1,510,492
=======================================================================================================
Net asset value per share -
Class A (a) $ 17.69 $ 20.68
(Net assets/shares) ($6,175/349) ($638,215/30,866)
Maximum offering price per share -
Class A (b) $ 18.77 $ 21.94
(Net asset value per share/
front-end sales charge) ($17.69/0.9425) ($20.68/0.9425)
Net asset value and offering price
per share - Class B (a) $ 17.25 $ 20.01
(Net assets/shares) ($5,779/335) ($193,930/9,693)
Net asset value and offering price
per share - Class C (a) $ 17.26 $ 20.00
(Net assets/shares) ($3,246/188) ($129,129/6,457)
Net asset value and offering price
per share - Class Z (a) $ 17.84 $ 20.97
(Net assets/shares) ($56,510/3,168) ($549,218/26,192)
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge and/or applicable redemption fee.
(b) On sales of $50,000 or more the offering price is reduced.
* Rounds to less than $500.
See accompanying notes to financial statements.
1-800-922-6769
58
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
COLUMBIA
COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA
ACORN ACORN ACORN INTERNATIONAL ACORN
(IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income $ 71,373 $ 31,907 $ 5,871 $ 1,004 $ 3,502
Dividend income from affiliates (See Note 4) 14,830 -- -- -- --
Interest income 14,191 1,190 1,165 53 1,789
- --------------------------------------------------------------------------------------------------------------------------------
100,394 33,097 7,036 1,057 5,291
Foreign taxes withheld (3,008) (2,545) (6) (94) --
- --------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 97,386 30,552 7,030 963 5,291
EXPENSES:
Management fee 44,457 8,705 4,040 315 5,556
Administration fee 2,969 471 193 14 287
12b-1 Service and Distribution fees:
Class A 3,343 99 143 7 686
Class B 5,677 244 295 23 772
Class C 5,276 164 193 14 569
Transfer agent fees:
Class A 1,039 45 57 4 247
Class B 1,134 67 66 9 200
Class C 640 26 26 3 91
Class Z 1,293 639 122 33 200
Custody fees 826 787 16 30 19
Trustees' fees 323 53 21 20 65
Registration & blue sky fees 538 208 94 33 118
Compliance fees 259 40 16 1 24
Non-recurring costs (See Note 8) 85 13 6 --* 8
Other expenses 1,969 281 146 42 224
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses 69,828 11,842 5,434 548 9,066
Less custody fees paid indirectly (18) (1) (2) --* (4)
Less reimbursement of expenses by
Investment Adviser -- -- -- (7) --
Less expenses waived by Investment Adviser (395) (39) (16) (1) (117)
Less reimbursement of expenses by Transfer Agent (785) (200) (51) (11) (118)
Non-recurring costs reimbursed (See Note 8) (85) (13) (6) --* (8)
- --------------------------------------------------------------------------------------------------------------------------------
Net Expenses 68,545 11,589 5,359 529 8,819
- --------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 28,841 18,963 1,671 434 (3,528)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS:
Net realized gain (loss) on:
Unaffiliated investments 440,635 106,812 30,997 664 32,796
Affiliated investments (See Note 4) 1,653 -- -- -- --
Foreign currency transactions (344) (638) -- (15) --
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain 441,944 106,174 30,997 649 32,796
================================================================================================================================
Net change in net unrealized appreciation
(depreciation) on:
Unaffiliated investments (50,748) (64,434) 19,017 (885) 1
Affiliated investments (See Note 4) (41,103) -- (622) -- (22,985)
Foreign currency translations (499) (527) -- (7) --
Foreign capital gains tax -- (3) -- -- --
Liquidated security 161 -- 54 -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized
appreciation (depreciation) (92,189) (64,964) 18,449 (892) (22,984)
================================================================================================================================
Net realized and unrealized gain (loss) 349,755 41,210 49,446 (243) 9,812
- --------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets resulting
from Operations $ 378,596 $ 60,173 $ 51,117 $ 191 $ 6,284
================================================================================================================================
* Rounds to less than $500.
See accompanying notes to financial statements.
59
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
OPERATIONS:
Net investment income (loss) $ 28,841 $ (13,051) $ 18,963 $ 16,703
Net realized gain on investments and foreign
currency transactions 441,944 693,184 106,174 175,881
Net change in net unrealized appreciation
(depreciation) on investments, foreign
currency translations, foreign capital
gains tax and liquidated security (92,189) 1,701,999 (64,964) 276,935
- ---------------------------------------------------------------------------------------------------------------------
Net Increase from Operations 378,596 2,382,132 60,173 469,519
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (966) (374)
Net realized gain -- Class A (41,222) (89,952) -- --
Net investment income -- Class B -- -- (281) (75)
Net realized gain -- Class B (20,635) (49,011) -- --
Net investment income -- Class C -- -- (172) (42)
Net realized gain -- Class C (16,577) (37,671) -- --
Net investment income -- Class Z -- (5,620) (29,780) (16,439)
Net realized gain -- Class Z (130,799) (290,184) -- --
- ---------------------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders (209,233) (472,438) (31,199) (16,930)
SHARE TRANSACTIONS:
Subscriptions -- Class A 415,008 703,271 22,421 19,736
Distributions reinvested -- Class A 37,158 81,405 785 306
Redemptions -- Class A (302,648) (453,387) (6,328) (17,531)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 149,518 331,289 16,878 2,511
Subscriptions -- Class B 27,942 90,732 9,579 10,422
Distributions reinvested -- Class B 18,804 44,616 247 66
Redemptions -- Class B (89,021) (146,696) (5,267) (7,152)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (42,275) (11,348) 4,559 3,336
Subscriptions -- Class C 78,997 145,878 6,602 8,030
Distributions reinvested -- Class C 13,377 30,636 141 35
Redemptions -- Class C (80,206) (136,434) (2,650) (6,936)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 12,168 40,080 4,093 1,129
Subscriptions -- Class Z 805,490 1,596,519 278,879 206,434
Distributions reinvested -- Class Z 112,557 254,191 23,508 14,669
Redemptions -- Class Z (545,473) (1,447,781) (163,679) (284,074)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 372,574 402,929 138,708 (62,971)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 491,985 762,950 164,238 (55,995)
- ---------------------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 33 86
- ---------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 661,348 2,672,644 193,245 396,680
NET ASSETS:
Beginning of period 13,841,459 11,168,815 2,075,012 1,678,332
- ---------------------------------------------------------------------------------------------------------------------
End of period $ 14,502,807 $ 13,841,459 $ 2,268,257 $ 2,075,012
=====================================================================================================================
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 7,920 $ (20,921) $ 3,915 $ 16,151
=====================================================================================================================
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
OPERATIONS:
Net investment income (loss) $ 1,671 $ (6,571) $ 434 $ 51
Net realized gain on investments and foreign
currency transactions 30,997 28,245 649 7,208
Net change in net unrealized appreciation
(depreciation) on investments, foreign
currency translations, foreign capital
gains tax and liquidated security 18,449 121,948 (892) 2,762
- ---------------------------------------------------------------------------------------------------------------------
Net Increase from Operations 51,117 143,622 191 10,021
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- -- (79) (6)
Net realized gain -- Class A (1,741) (622) -- --
Net investment income -- Class B -- -- (46) --
Net realized gain -- Class B (1,039) (415) -- --
Net investment income -- Class C -- -- (24) --
Net realized gain -- Class C (592) (224) -- --
Net investment income -- Class Z -- -- (888) (151)
Net realized gain -- Class Z (10,141) (3,487) -- --
- ---------------------------------------------------------------------------------------------------------------------
Total Distribution to Shareholders (13,513) (4,748) (1,037) (157)
SHARE TRANSACTIONS:
Subscriptions -- Class A 20,621 27,362 2,233 1,860
Distributions reinvested -- Class A 1,590 572 71 5
Redemptions -- Class A (12,727) (22,954) (408) (763)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 9,484 4,980 1,896 1,102
Subscriptions -- Class B 1,922 4,936 1,294 1,664
Distributions reinvested -- Class B 948 375 41 --
Redemptions -- Class B (6,087) (10,452) (614) (586)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (3,217) (5,141) 721 1,078
Subscriptions -- Class C 3,125 5,707 1,001 786
Distributions reinvested -- Class C 490 187 20 --
Redemptions -- Class C (3,206) (8,114) (291) (2,429)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 409 (2,220) 730 (1,643)
Subscriptions -- Class Z 111,981 199,048 13,951 11,787
Distributions reinvested -- Class Z 8,943 3,134 582 146
Redemptions -- Class Z (41,487) (161,267) (3,618) (7,456)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 79,437 40,915 10,915 4,477
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 86,113 38,534 14,262 5,014
- ---------------------------------------------------------------------------------------------------------------------
Redemption Fees -- -- 6 4
- ---------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 123,717 177,408 13,422 14,882
NET ASSETS:
Beginning of period 870,682 693,274 58,288 43,406
- ---------------------------------------------------------------------------------------------------------------------
End of period $ 994,399 $ 870,682 $ 71,710 $ 58,288
=====================================================================================================================
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 1,568 $ (103) $ (554) $ 49
=====================================================================================================================
COLUMBIA
ACORN SELECT
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31,
- -----------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
OPERATIONS:
Net investment income (loss) $ (3,528) $ (8,994)
Net realized gain on investments and foreign
currency transactions 32,796 47,420
Net change in net unrealized appreciation
(depreciation) on investments, foreign
currency translations, foreign capital
gains tax and liquidated security (22,984) 133,791
- -----------------------------------------------------------------------------------
Net Increase from Operations 6,284 172,217
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- --
Net realized gain -- Class A (2,737) (10,300)
Net investment income -- Class B -- --
Net realized gain -- Class B (885) (3,895)
Net investment income -- Class C -- --
Net realized gain -- Class C (576) (2,321)
Net investment income -- Class Z -- --
Net realized gain -- Class Z (3,269) (8,700)
- -----------------------------------------------------------------------------------
Total Distribution to Shareholders (7,467) (25,216)
SHARE TRANSACTIONS:
Subscriptions -- Class A 185,756 274,350
Distributions reinvested -- Class A 2,555 9,614
Redemptions -- Class A (66,604) (91,343)
- -----------------------------------------------------------------------------------
Net Increase -- Class A 121,707 192,621
Subscriptions -- Class B 21,878 61,755
Distributions reinvested -- Class B 795 3,496
Redemptions -- Class B (12,553) (19,113)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B 10,120 46,138
Subscriptions -- Class C 32,636 49,173
Distributions reinvested -- Class C 473 1,934
Redemptions -- Class C (13,807) (17,236)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 19,302 33,871
Subscriptions -- Class Z 180,330 204,740
Distributions reinvested -- Class Z 2,389 6,716
Redemptions -- Class Z (79,260) (114,619)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 103,459 96,837
- -----------------------------------------------------------------------------------
Net Increase (Decrease) from Share Transactions 254,588 369,467
- -----------------------------------------------------------------------------------
Redemption Fees -- --
- -----------------------------------------------------------------------------------
Total Increase in Net Assets 253,405 516,468
NET ASSETS:
Beginning of period 1,257,087 740,619
- -----------------------------------------------------------------------------------
End of period $ 1,510,492 $ 1,257,087
===================================================================================
UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT
INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ (3,585) $ (57)
===================================================================================
See accompanying notes to financial statements.
Spread 60-61
COLUMBIA ACORN FAMILY OF FUNDS
>STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN
ACORN FUND INTERNATIONAL
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
Subscriptions -- Class A 16,259 29,671 765 809
Shares issued in reinvestment and capital
gains -- Class A 1,446 3,255 27 13
Less shares redeemed -- Class A (11,869) (19,230) (215) (722)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 5,836 13,696 577 100
Subscriptions -- Class B 1,130 3,928 332 438
Shares issued in reinvestment and capital
gains -- Class B 756 1,836 8 3
Less shares redeemed -- Class B (3,599) (6,388) (183) (301)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (1,713) (624) 157 140
Subscriptions -- Class C 3,191 6,282 229 333
Shares issued in reinvestment and capital
gains -- Class C 538 1,261 5 2
Less shares redeemed -- Class C (3,242) (5,916) (92) (293)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 487 1,627 142 42
Subscriptions -- Class Z 30,921 66,041 9,414 8,246
Shares issued in reinvestment and capital
gains -- Class Z 4,286 9,967 805 624
Less shares redeemed -- Class Z (20,944) (60,621) (5,589) (11,723)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 14,263 15,387 4,630 (2,853)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of
Beneficial Interest 18,873 30,086 5,506 (2,571)
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA COLUMBIA ACORN
ACORN USA INTERNATIONAL SELECT
(UNAUDITED) (UNAUDITED)
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004 2005 2004
Subscriptions -- Class A 835 1,239 124 116
Shares issued in reinvestment and capital
gains -- Class A 63 24 4 --*
Less shares redeemed -- Class A (517) (1,043) (23) (49)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase -- Class A 381 220 105 67
Subscriptions -- Class B 80 229 74 108
Shares issued in reinvestment and capital
gains -- Class B 39 16 2 --
Less shares redeemed -- Class B (255) (485) (35) (38)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B (136) (240) 41 70
Subscriptions -- Class C 129 261 58 52
Shares issued in reinvestment and capital
gains -- Class C 20 8 1 --
Less shares redeemed -- Class C (134) (379) (17) (167)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 15 (110) 42 (115)
Subscriptions -- Class Z 4,462 8,912 768 707
Shares issued in reinvestment and capital
gains -- Class Z 349 128 33 10
Less shares redeemed -- Class Z (1,659) (7,291) (202) (479)
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 3,152 1,749 599 238
- ---------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of
Beneficial Interest 3,412 1,619 787 260
- ---------------------------------------------------------------------------------------------------------------------
COLUMBIA
ACORN SELECT
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31,
- -----------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
Subscriptions -- Class A 9,331 14,418
Shares issued in reinvestment and capital
gains -- Class A 126 473
Less shares redeemed -- Class A (3,358) (4,824)
- -----------------------------------------------------------------------------------
Net Increase -- Class A 6,099 10,067
Subscriptions -- Class B 1,133 3,336
Shares issued in reinvestment and capital
gains -- Class B 41 177
Less shares redeemed -- Class B (653) (1,035)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class B 521 2,478
Subscriptions -- Class C 1,692 2,649
Shares issued in reinvestment and capital
gains -- Class C 24 98
Less shares redeemed -- Class C (718) (929)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C 998 1,818
Subscriptions -- Class Z 8,931 10,606
Shares issued in reinvestment and capital
gains -- Class Z 116 326
Less shares redeemed -- Class Z (3,928) (5,997)
- -----------------------------------------------------------------------------------
Net Increase (Decrease) -- Class Z 5,119 4,935
- -----------------------------------------------------------------------------------
Net Increase (Decrease) in Shares of
Beneficial Interest 12,737 19,298
- -----------------------------------------------------------------------------------
* Rounds to less than 500 shares.
1-800-922-6769
See accompanying notes to financial statements.
Spread 62-63
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS
COLUMBIA ACORN FUND (UNAUDITED)
SIX MONTHS
CLASS A SHARES ENDED JUNE 30,
- ------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.93
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.05
Net realized and unrealized gain (loss) 0.62
- ------------------------------------------------------------------
Total from Investment Operations 0.67
- ------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.39)
- ------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.39)
- ------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 26.21
==================================================================
Total Return (c) 2.60%(d)(e)
- ------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.06%(g)
Net investment income (loss) (f) 0.36%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 8%(e)
Net assets at end of period (000'S) $ 2,852,237
COLUMBIA ACORN FUND
CLASS A SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.20 $ 15.34 $ 17.80 $ 17.19 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.05) (0.07) (0.07) (0.05) 0.01
Net realized and unrealized gain (loss) 4.69 6.95 (2.39) 1.01 1.22
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.64 6.88 (2.46) 0.96 1.23
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.93 $ 22.20 $ 15.34 $ 17.80 $ 17.19
======================================================================================================================
Total Return (c) 21.05%(d) 44.85% (13.82)% 5.56% 7.40%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.20% 1.33% 1.42% 1.42% 1.25%(g)(h)
Net investment income (loss) (f) (0.21)% (0.36)% (0.45)% (0.33)% 0.17%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $2,669,936 $1,982,260 $ 724,121 $ 306,405 $ 18,252
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.03% and 0.39% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS B SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.19
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.04)
Net realized and unrealized gain (loss) 0.61
- ---------------------------------------------------------------------
Total from Investment Operations 0.57
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.39)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.39)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.37
=====================================================================
Total Return (c) 2.28%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.75%(g)
Net investment loss (f) (0.33)%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 8%(e)
Net assets at end of period (000'S) $ 1,365,518
CLASS B SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 $ 15.13 $ 17.67 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.22) (0.18) (0.17) (0.16) (0.01)
Net realized and unrealized gain (loss) 4.57 6.82 (2.37) 1.01 1.22
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.35 6.64 (2.54) 0.85 1.21
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.19 $ 21.75 $ 15.13 $ 17.67 $ 17.17
======================================================================================================================
Total Return (c) 20.15%(d) 43.89% (14.37)% 4.92% 7.27%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h)
Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $1,399,135 $1,221,931 $ 618,727 $ 286,422 $ 15,951
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS C SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 25.18
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.05)
Net realized and unrealized gain (loss) 0.61
- ---------------------------------------------------------------------
Total from Investment Operations 0.56
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.39)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.39)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.35
=====================================================================
Total Return (c) 2.24%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.85%(g)
Net investment loss (f) (0.44)%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 8%(e)
Net assets at end of period (000'S) $ 1,102,416
CLASS C SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 $ 15.12 $ 17.66 $ 17.17 $ 17.88
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.22) (0.18) (0.17) (0.17) (0.01)
Net realized and unrealized gain (loss) 4.56 6.83 (2.37) 1.01 1.22
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.34 6.65 (2.54) 0.84 1.21
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.06)
From net realized gains (0.91) (0.02) -- (0.35) (1.86)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.18 $ 21.75 $ 15.12 $ 17.66 $ 17.17
======================================================================================================================
Total Return (c) 20.11%(d) 43.99% (14.38)% 4.86% 7.27%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h)
Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 20% 10% 13% 20% 29%
Net assets at end of period (000'S) $1,083,006 $ 900,016 $ 376,024 $ 150,727 $ 8,510
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.68% and (0.26)% respectively, were revised to
reflect all class specific expenses in this period.
See accompanying notes to financial statements.
1-800-922-6769
64
COLUMBIA ACORN INTERNATIONAL (UNAUDITED)
SIX MONTHS
CLASS A SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 28.75
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) 0.22
Net realized and unrealized gain (loss) 0.59
- ---------------------------------------------------------------------
Total from Investment Operations 0.81
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.33)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.33)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 29.23
=====================================================================
Total Return (c) 2.83%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.31%(g)
Net investment income (f) 1.49%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 15%(e)
Net assets at end of period (000'S) $ 88,608
COLUMBIA ACORN INTERNATIONAL
CLASS A SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.45 $ 15.32 $ 18.35 $ 23.84 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (b) 0.14 0.10 0.05 0.01 0.02
Net realized and unrealized gain (loss) 6.31 7.08 (3.07) (5.11) (1.26)
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.45 7.18 (3.02) (5.10) (1.24)
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.15) (0.05) (0.01) -- --
From net realized gains -- -- -- (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.15) (0.05) (0.01) (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 28.75 $ 22.45 $ 15.32 $ 18.35 $ 23.84
======================================================================================================================
Total Return (c) 28.91%(d) 46.94% (16.46)% (21.59)% (4.85)%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.48% 1.59% 1.56% 1.65% 1.26%(g)(h)
Net investment income (f) 0.61% 0.57% 0.30% 0.03% 0.73%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 70,582 $ 52,872 $ 33,806 $ 25,587 $ 10,323
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.59% and 0.40% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS B SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 28.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.11
Net realized and unrealized gain (loss) 0.59
- ---------------------------------------------------------------------
Total from Investment Operations 0.70
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.14)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 28.74
=====================================================================
Total Return (c) 2.47%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.03%(g)
Net investment income (loss) (f) 0.77%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 15%(e)
Net assets at end of period (000'S) $ 60,364
CLASS B SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.07 $ 15.11 $ 18.22 $ 23.81 $ 28.67
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.04) (0.02) (0.06) (0.12) 0.01
Net realized and unrealized gain (loss) 6.19 6.98 (3.05) (5.08) (1.28)
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.15 6.96 (3.11) (5.20) (1.27)
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04) -- -- -- --
From net realized gains -- -- -- (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 28.18 $ 22.07 $ 15.11 $ 18.22 $ 23.81
======================================================================================================================
Total Return (c) 27.91%(d) 46.06% (17.07)% (22.04)% (4.97)%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.27% 2.24% 2.21% 2.30% 1.91%(g)(h)
Net investment income (loss) (f) (0.18)% (0.10)% (0.35)% (0.62)% 0.08%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 54,752 $ 39,800 $ 22,560 $ 17,235 $ 5,675
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS C SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 28.19
Income from Investment Operations
Net investment income (loss) (b) 0.10
Net realized and unrealized gain (loss) 0.58
- ---------------------------------------------------------------------
Total from Investment Operations 0.68
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.14)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 28.73
=====================================================================
Total Return (c) 2.43%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.10%(g)
Net investment income (loss) (f) 0.69%(g)
Reimbursement 0.02%(g)
Portfolio turnover rate 15%(e)
Net assets at end of period (000'S) $ 35,220
CLASS C SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.06 $ 15.11 $ 18.21 $ 23.81 $ 28.67
Income from Investment Operations
Net investment income (loss) (b) (0.03) (0.01) (0.06) (0.13) 0.01
Net realized and unrealized gain (loss) 6.20 6.96 (3.04) (5.08) (1.28)
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 6.17 6.95 (3.10) (5.21) (1.27)
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.04) -- -- -- --
From net realized gains -- -- -- (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59)
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 28.19 $ 22.06 $ 15.11 $ 18.21 $ 23.81
======================================================================================================================
Total Return (c) 28.01%(d) 46.00% (17.02)% (22.08)% (4.97)%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.24% 2.24% 2.21% 2.30% 1.91%(g)(h)
Net investment income (loss) (f) (0.15)% (0.06)% (0.35)% (0.62)% 0.08%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 40% 40% 52% 45% 63%
Net assets at end of period (000'S) $ 30,547 $ 22,990 $ 14,575 $ 14,327 $ 3,965
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 2.24% and (0.25)% respectively, were revised to
reflect all class specific expenses in this period.
65
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS, CONTINUED
COLUMBIA ACORN USA (UNAUDITED)
SIX MONTHS
CLASS A SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 24.77
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.03
Net realized and unrealized gain (loss) 1.29
- ---------------------------------------------------------------------
Total from Investment Operations 1.32
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.36)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.36)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 25.73
=====================================================================
Total Return (c) 5.38%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.34%(g)
Net investment income (loss) (f) 0.23%(g)
Reimbursement 0.01%(g)
Portfolio turnover rate 7%(e)
Net assets at end of period (000'S) $ 126,647
COLUMBIA ACORN USA
CLASS A SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.74 $ 14.18 $ 17.50 $ 14.88 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.24) (0.22) (0.19) (0.19) (0.01)
Net realized and unrealized gain (loss) 4.41 6.78 (3.13) 2.96 1.06
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 4.17 6.56 (3.32) 2.77 1.05
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.15) --
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14) -- -- (0.15) --
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.77 $ 20.74 $ 14.18 $ 17.50 $ 14.88
======================================================================================================================
Total Return (c) 20.12%(d) 46.26% (18.97)% 18.65% 7.59%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 1.51% 1.65% 1.74% 1.84% 1.41%(g)(h)
Net investment income (loss) (f) (1.08)% (1.26)% (1.21)% (1.13)% (0.73)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 112,509 $ 89,650 $ 32,422 $ 20,455 $ 798
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.17% and (0.49)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS B SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 24.14
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.06)
Net realized and unrealized gain (loss) 1.25
- ---------------------------------------------------------------------
Total from Investment Operations 1.19
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.36)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.36)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.97
=====================================================================
Total Return (c) 4.98%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.03%(g)
Net investment loss (f) (0.51)%(g)
Reimbursement 0.01%(g)
Portfolio turnover rate 7%(e)
Net assets at end of period (000'S) $ 71,766
CLASS B SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.13) --
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14) -- -- (0.13) --
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87
======================================================================================================================
Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h)
Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 72,643 $ 66,175 $ 37,478 $ 27,722 $ 685
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS C SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 24.14
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.07)
Net realized and unrealized gain (loss) 1.25
- ---------------------------------------------------------------------
Total from Investment Operations 1.18
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.36)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.36)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.96
=====================================================================
Total Return (c) 4.94%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.13%(g)
Net investment loss (f) (0.59)%(g)
Reimbursement 0.01%(g)
Portfolio turnover rate 7%(e)
Net assets at end of period (000'S) $ 41,376
CLASS C SHARES YEAR ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03)
Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07
- ----------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net realized gains (0.14) -- -- (0.13) --
- ----------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14) -- -- (0.13) --
- ----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87
======================================================================================================================
Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e)
- ----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h)
Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h)
Reimbursement 0.02% -- -- -- --
Portfolio turnover rate 18% 7% 31% 24% 45%
Net assets at end of period (000'S) $ 39,643 $ 35,662 $ 18,313 $ 13,049 $ 347
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.82% and (1.14)% respectively, were revised to
reflect all class specific expenses in this period.
1-800-922-6769
See accompanying notes to financial statements.
66
COLUMBIA ACORN INTERNATIONAL SELECT (UNAUDITED)
SIX MONTHS
CLASS A SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.85
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.11
Net realized and unrealized gain (loss) (0.03)
- ---------------------------------------------------------------------
Total from Investment Operations 0.08
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.24)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.24)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.69
=====================================================================
Total Return (d) 0.44%(e)(f)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (g) 1.70%(h)
Net investment income (loss) (g) 1.24%(h)
Reimbursement 0.07%(h)
Portfolio turnover rate 13%(f)
Net assets at end of period (000'S) $ 6,175
COLUMBIA ACORN INTERNATIONAL SELECT
CLASS A SHARES YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.45 $ 10.24 $ 12.07 $ 17.15 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.00(c) 0.03 (0.01) (0.09) (0.03)
Net realized and unrealized gain (loss) 3.43 4.18 (1.82) (4.90) (0.53)
- ---------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.43 4.21 (1.83) (4.99) (0.56)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.03) -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.03) -- -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.85 $ 14.45 $ 10.24 $ 12.07 $ 17.15
===========================================================================================================================
Total Return (d) 23.76%(e) 41.11%(e) (15.16)%(e) (29.17)%(e) (3.16)%(f)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (g) 1.75% 1.80% 1.80% 1.80% 1.68%(h)(i)
Net investment income (loss) (g) (0.03)% 0.24% (0.09)% (0.67)% (1.18)%(h)(i)
Reimbursement 0.37% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 4,357 $ 2,557 $ 2,612 $ 2,861 $ 3,172
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Rounds to less than $0.01 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.29% and (0.79)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS B SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.36
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.05
Net realized and unrealized gain (loss) (0.02)
- ---------------------------------------------------------------------
Total from Investment Operations 0.03
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.14)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.14)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.25
=====================================================================
Total Return (c) 0.17%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.30%(g)
Net investment income (loss) (f) 0.52%(g)
Reimbursement 0.24%(g)
Portfolio turnover rate 13%(e)
Net assets at end of period (000'S) $ 5,779
CLASS B SHARES YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.12 $ 10.08 $ 11.96 $ 17.13 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.10) (0.06) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 3.34 4.10 (1.80) (4.90) (0.53)
- ---------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.24 4.04 (1.88) (5.08) (0.58)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders -- -- -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.36 $ 14.12 $ 10.08 $ 11.96 $ 17.13
===========================================================================================================================
Total Return (c) 22.95%(d) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.38% 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment income (loss) (f) (0.66)% (0.52)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.58% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 5,097 $ 3,162 $ 1,835 $ 2,069 $ 1,551
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS C SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.38
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) 0.04
Net realized and unrealized gain (loss) (0.03)
- ---------------------------------------------------------------------
Total from Investment Operations 0.01
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.13)
From net realized gains --
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.13)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.26
=====================================================================
Total Return (c) 0.05%(d)(e)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.45%(g)
Net investment income (loss) (f) 0.48%(g)
Reimbursement 0.12%(g)
Portfolio turnover rate 13%(e)
Net assets at end of period (000'S) $ 3,246
CLASS C SHARES YEAR ENDED DECEMBER 31,
- ---------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.14 $ 10.09 $ 11.97 $ 17.14 $ 17.71
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (b) (0.11) (0.05) (0.08) (0.18) (0.05)
Net realized and unrealized gain (loss) 3.35 4.10 (1.80) (4.90) (0.52)
- ---------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.24 4.05 (1.88) (5.08) (0.57)
- ---------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- (0.01) --
From net realized gains -- -- -- (0.08) --
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders -- -- -- (0.09) --
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 17.38 $ 14.14 $ 10.09 $ 11.97 $ 17.14
===========================================================================================================================
Total Return (c) 22.91%(d) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e)
- ---------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f) 2.45% 2.45% 2.45% 2.45% 2.33%(g)(h)
Net investment income (loss) (f) (0.73)% (0.41)% (0.74)% (1.32)% (1.83)%(g)(h)
Reimbursement 0.35% 0.44% 0.33% 0.23% --
Portfolio turnover rate 73% 69% 102% 82% 79%
Net assets at end of period (000'S) $ 2,543 $ 3,691 $ 2,915 $ 3,885 $ 3,399
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) The benefits derived from custody fees paid indirectly had no impact.
(g) Annualized.
(h) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.94% and (1.44)% respectively, were revised to
reflect all class specific expenses in this period.
67
COLUMBIA ACORN FAMILY OF FUNDS
>FINANCIAL HIGHLIGHTS, CONTINUED
COLUMBIA ACORN SELECT (UNAUDITED)
SIX MONTHS
CLASS A SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.83
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.04)
Net realized and unrealized gain (loss) (0.02)(c)
- ---------------------------------------------------------------------
Total from Investment Operations (0.06)
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.09)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.09)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.68
=====================================================================
Total Return (d) (0.27)%(e)(f)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 1.25%(g)(h)
Net investment loss (0.45)%(g)(h)
Reimbursement 0.04%(h)
Portfolio turnover rate 14%(f)
Net assets at end of period (000'S) $ 638,215
COLUMBIA ACORN SELECT
CLASS A SHARES YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.01 $ 13.93 $ 15.17 $ 14.12 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.16) (0.20) (0.16) (0.10) (0.01)
Net realized and unrealized gain (loss) 3.42 4.37 (1.08) 1.18 0.86
- -------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.26 4.17 (1.24) 1.08 0.85
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.83 $ 18.01 $ 13.93 $ 15.17 $ 14.12
=========================================================================================================================
Total Return (d) 18.16%(e) 29.95% (8.17)%(e) 7.65%(e) 6.32%(f)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 1.47%(g) 1.63%(g) 1.70%(g) 1.70% 1.61%(g)(h)(i)
Net investment loss (0.86)%(g) (1.15)%(g) (1.11)%(g (0.79)% (0.62)%(g)(h)(i)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 515,842 $ 264,679 $ 31,742 $ 11,900 $ 3,267
(a) Class A Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments in the Fund.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) The ratios of expenses and net investment loss to average net assets,
previously reported as 0.76% and 0.23% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS B SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.23
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.11)
Net realized and unrealized gain (loss) (0.02)(c)
- ---------------------------------------------------------------------
Total from Investment Operations (0.13)
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.09)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.09)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.01
=====================================================================
Total Return (d) (0.62)%(e)(f)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 1.98%(g)(h)
Net investment loss (1.18)%(g)(h)
Reimbursement 0.04%(h)
Portfolio turnover rate 14%(f)
Net assets at end of period (000'S) $ 193,930
CLASS B SHARES YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.31) (0.29) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 3.34 4.29 (1.07) 1.18 0.84
- -------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10
=========================================================================================================================
Total Return (d) 17.24%(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(f)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 2.26%(g) 2.28%(g) 2.35%(g) 2.35% 2.26%(g)(h)(i)
Net investment loss (1.65)%(g) (1.80)%(g) (1.76)%(g) (1.44)% (1.27)%(g)(h)(i)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 185,545 $ 118,064 $ 33,106 $ 13,358 $ 4,249
(a) Class B Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments in the Fund.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
(UNAUDITED)
SIX MONTHS
CLASS C SHARES ENDED JUNE 30,
- ---------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2005
NET ASSET VALUE, BEGINNING OF PERIOD $ 20.23
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.12)
Net realized and unrealized gain (loss) (0.02)(c)
- ---------------------------------------------------------------------
Total from Investment Operations (0.14)
- ---------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income --
From net realized gains (0.09)
- ---------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.09)
- ---------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.00
=====================================================================
Total Return (d) (0.67)%(e)(f)
- ---------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 2.07%(g)(h)
Net investment loss (1.28)%(g)(h)
Reimbursement 0.04%(h)
Portfolio turnover rate 14%(f)
Net assets at end of period (000'S) $ 129,129
CLASS C SHARES YEAR ENDED DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a)
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (b) (0.30) (0.30) (0.25) (0.20) (0.01)
Net realized and unrealized gain (loss) 3.33 4.30 (1.07) 1.18 0.84
- -------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83
- -------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- -- -- -- (0.01)
From net realized gains (0.44) (0.09) -- (0.03) (0.19)
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20)
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10
=========================================================================================================================
Total Return (d) 17.24%(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(f)
- -------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses 2.25%(g) 2.28%(g) 2.35%(g) 2.35% 2.26%(g)(h)(i)
Net investment loss (1.64)%(g (1.80)%(g) (1.76)%(g) (1.44)% (1.27)%(g)(h)(i)
Reimbursement 0.02% -- 0.10% 0.18% --
Portfolio turnover rate 34% 16% 40% 82% 116%
Net assets at end of period (000'S) $ 110,435 $ 64,212 $ 10,919 $ 4,945 $ 1,070
(a) Class C Shares were initially offered on October 16, 2000. Per share data
reflects activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing
of repurchases of Fund shares in relation to fluctuating market values of
the investments in the Fund.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Investment Advisor and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(i) The ratios of expenses and net investment loss to average net assets,
previously reported as 1.41% and (0.42)% respectively, were revised to
reflect all class specific expenses in this period.
1-800-922-6769
See accompanying notes to financial statements.
68
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of Operations
Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia
Acorn International Select and Columbia Acorn Select (the "Funds") are each a
series of Columbia Acorn Trust (the "Trust"), an open-end management investment
company organized as a Massachusetts business trust. The investment objective of
each Fund is to seek long-term growth of capital. The Funds may issue an
unlimited number of shares. The Funds offer four classes of shares: Class A,
Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") is assessed to Class A shares purchased without
an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Effective January 3, 2005, Columbia Acorn International and Columbia Acorn
International Select imposed a 2% redemption fee on Class A, Class B and Class C
shares that are owned 60 days or less. See "Fund Policy on Trading of Fund
Shares and Redemption Fees" as disclosed within the Funds' prospectus for more
information.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares.
Generally, you may exchange your Class A, Class B or Class Z shares of the
Fund for shares of another fund at no additional charge. However, if you
exchange Class A, Class B or Class Z shares of Columbia Acorn International or
Columbia Acorn International Select that you have owned 60 days or less for
shares of a fund distributed by Columbia Funds Distributor, Inc., that does not
have a redemption fee (including Columbia Acorn Fund, Columbia Acorn USA and
Columbia Acorn Select), the Fund will charge you a redemption fee of 2% of the
redemption proceeds. Exchanges between Columbia Acorn International and Columbia
Acorn International Select (or a fund distributed by Columbia Funds Distributor,
Inc. that has a redemption fee) will not be subject to the 2% redemption fee. In
addition, if you redeem shares of Columbia Acorn International or Columbia Acorn
International Select that you have owned 60 days or less, the Fund will charge
you a redemption fee of 2% of the redemption proceeds, with certain exceptions.
See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed
within the Funds' prospectus for more information.
The financial highlights for Class Z shares are presented in a separate
semiannual report. The semiannual financial statements for the Columbia
Thermostat Fund, another Fund of the Trust, begin on page 76 of this report.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Securities of the Funds are valued at market value or, if a market quotation for
a security is not readily available or is deemed not to be reliable because of
events or circumstances that have occurred between the market quotation and the
time as of which the security is to be valued, the security is valued at a fair
value determined in accordance with procedures established by the Board of
Trustees. Securities traded on securities exchanges or in over-the-counter
markets in which transaction prices are reported are valued at the last sales
price at the time of valuation. If a security is traded principally on the
Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied.
Securities for which there are no reported sales on the valuation date are
valued at the latest bid quotation. Short-term debt obligations having a
maturity of 60 days or less from the valuation date are valued on an amortized
cost basis, which approximate fair value. Securities for which quotations are
not available are valued at a fair value as determined in good faith by the
Board of Trustees. The Trust has retained an independent statistical fair value
pricing service to assist in the fair valuation process for securities
principally traded in a foreign market in order to adjust for possible changes
in value that may occur between the close of the foreign exchange and the time
at which Fund shares are priced. If a security is valued at a "fair value", that
value may be different from the last quoted market price for the security.
69
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
>Repurchase agreements
The Funds may engage in repurchase agreement transactions. The Funds, through
their custodians, receive delivery of underlying securities collateralizing
repurchase agreements. The Funds' investment adviser determines that the value
of the underlying securities is at all times at least equal to the resale price.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Foreign currency translations
Values of investments denominated in foreign currencies are converted into U.S.
dollars using the spot market rate of exchange at the time of valuation.
Purchases and sales of investments and dividend and interest income are
translated into U.S. dollars using the spot market rate of exchange prevailing
on the respective dates of such transactions. The gain or loss resulting from
changes in foreign exchange rates is included with net realized and unrealized
gain or loss from investments, as appropriate.
>Security transactions and investment income
Security transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon as
the information is available to the Funds. Interest income is recorded on the
accrual basis and includes amortization of discounts on short-term debt
obligations and long-term debt obligations when required for federal income tax
purposes. Realized gains and losses from security transactions are reported on
an identified cost basis.
Awards from class action litigation may be recorded as a reduction of
cost. If the Funds no longer own the applicable securities, the proceeds are
recorded as realized gains.
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
>Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Funds or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Funds will not
incur any registration costs upon such resale.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Financial instruments
Each Fund may purchase or sell exchange-traded financial futures contracts,
which are contracts that obligate that Fund to make or take delivery of a
financial instrument or the cash value of a securities index at a specified
future date at a specified price. The Funds enter into such contracts to hedge a
portion of their portfolio. Gains and losses are reflected as "Net Realized Gain
(Loss) on Futures" on the Statements of Operations. Additionally, each Fund,
except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio
hedging with respect to changes in foreign currency exchange rates by entering
into forward foreign currency contracts to purchase or sell foreign currencies.
The Statements of Operations reflect gains and losses as realized for closed
forward foreign currency contracts and unrealized for open contracts. The Funds
bear the market risk that arises from changes in the value of financial
instruments and securities indices (futures contracts) or from changes in
foreign currency rates (forward foreign currency contracts) and the credit risk
should a counterparty fail to perform under such contracts.
None of the Funds entered into any futures contracts or forward foreign
currency contracts during the six months ended June 30, 2005.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("the Exchange") on each day the Exchange is open for
trading. All income, expenses (other than the Class A, Class B and Class C 12b-1
service and distribution fees and Class A, Class B, Class C and Class Z transfer
agent
1-800-922-6769
70
fees) and realized and unrealized gains (losses) of a fund are allocated to each
class proportionately on a daily basis for purposes of determining the net asset
value of each class. Redemption fees are accounted for as an addition to paid in
capital and are allocated to each class proportionately for purposes of
determining the net asset value of each class.
>Custody fees/credits
Custody fees are reduced based on each Fund's cash balances maintained with the
custodian. The Funds could have invested a portion of the assets utilized in
connection with the expense offset arrangement in an income-producing asset if
they had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses on the Statements of Operations.
>Federal income taxes
The Funds have complied with the provisions of the Internal Revenue Code
available to regulated investment companies and, in the manner provided therein,
distribute all their taxable income, as well as any net realized gain on sales
of investments and foreign currency transactions reportable for federal income
tax purposes. Accordingly, the Funds paid no federal income taxes and no federal
income tax provision was required.
>Foreign capital gains taxes
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 15%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The tax character of distributions paid during the year ended December 31, 2004
was as follows:
LONG-
TERM
ORDINARY CAPITAL
INCOME* GAINS
- --------------------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 30,840 $441,598
Columbia Acorn International 16,930 --
Columbia Acorn USA -- 4,748
Columbia Acorn International Select 157 --
Columbia Acorn Select -- 25,216
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
The following capital loss carryforwards, determined as of December 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 COLUMBIA ACORN COLUMBIA ACORN
EXPIRATION INTERNATIONAL USA
- ------------------------------------------------------------------------
(IN THOUSANDS)
2009 $ -- $ 2,529*
2010 14,102 506
2011 48,477 --
- ------------------------------------------------------------------------
TOTAL $62,579 $ 3,035
YEAR OF COLUMBIA ACORN
EXPIRATION INTERNATIONAL SELECT
- ------------------------------------------------------------------------
(IN THOUSANDS)
2009 $ 16,135
2010 12,528
2011 2,488
- ------------------------------------------------------------------------
TOTAL $ 31,151
* Of these carryforwards, $2,529 (expiring in 2009) remains from the Columbia
Acorn USA's merger with Stein Roe Small Company Growth Fund on 7/26/2002.
Utilization of Stein Roe Small Company Growth Fund's losses could be subject to
limitations imposed by the Internal Revenue Code.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Funds and is responsible for the
overall management of the Funds' business affairs.
Effective March 8, 2005, under the Funds' investment management agreement,
fees are accrued daily and paid monthly to Columbia WAM at the annual rates
shown in the table below for each fund.
COLUMBIA ACORN FUND
- -------------------------------------------------------------------
Net asset value:
On the first $700 million 0.74%
Next $1.3 billion 0.69%
Next $4 billion 0.64%
Net assets in excess of $6 billion 0.63%
COLUMBIA ACORN INTERNATIONAL
- -------------------------------------------------------------------
Net asset value:
On the first $100 million 1.19%
Next $400 million 0.94%
Net assets in excess of $500 million 0.74%
COLUMBIA ACORN USA
- -------------------------------------------------------------------
Net asset value:
On the first $200 million 0.94%
Net assets in excess of $200 million 0.89%
71
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
COLUMBIA ACORN INTERNATIONAL SELECT
- -------------------------------------------------------------------
On average daily net assets: 0.94%
COLUMBIA ACORN SELECT
- -------------------------------------------------------------------
Net asset value:
On the first $700 million 0.85%
Net assets in excess of $700 million 0.80%
Prior to March 8, 2005, under the Funds' investment management agreement,
fees were accrued daily and paid monthly to Columbia WAM at the annual rates
shown in the table below for each fund.
COLUMBIA ACORN FUND
- -------------------------------------------------------------------
Net asset value:
On the first $700 million 0.75%
Next $1.3 billion 0.70%
Net assets in excess of $2 billion 0.65%
COLUMBIA ACORN INTERNATIONAL
- -------------------------------------------------------------------
Net asset value:
On the first $100 million 1.20%
Next $400 million 0.95%
Net assets in excess of $500 million 0.75%
COLUMBIA ACORN USA
- -------------------------------------------------------------------
Net asset value:
On the first $200 million 0.95%
Net assets in excess of $200 million 0.90%
COLUMBIA ACORN INTERNATIONAL SELECT
- -------------------------------------------------------------------
On average daily net assets: 0.95%
COLUMBIA ACORN SELECT
- -------------------------------------------------------------------
Net asset value:
On the first $700 million 0.90%
Net assets in excess of $700 million 0.85%
In accordance with the terms of the NYAG Settlement (as defined and
discussed further under Note 8 to these Financial Statements - "Legal
Proceedings"), Columbia WAM waived a portion of the fees payable under the
Funds' investment management agreement so that those fees are retained at the
following rates as a percent of average daily net assets: COLUMBIA ACORN FUND -
0.74% - up to $700 million; 0.69% - $700 million to $2 billion; 0.64% - $2
billion to $6 billion; 0.63% - $6 billion and over; COLUMBIA ACORN INTERNATIONAL
- - 1.19% - up to $100 million; 0.94% - $100 million to $500 million; 0.74% - $500
million and over; COLUMBIA ACORN USA - 0.94% - up to $200 million; 0.89% - $200
million and over; COLUMBIA ACORN INTERNATIONAL SELECT - 0.94% on average daily
net assets; COLUMBIA ACORN SELECT - 0.85% - up to $700 million; 0.80% - $700
million and over. The fee waiver was effective as of March 8, 2005 but applied
as if it had gone into effect on December 1, 2004.
For the six months ended June 30, 2005, the Funds' effective investment
advisory fee rates were as follows:
- -------------------------------------------------------------------
Columbia Acorn Fund 0.65%
Columbia Acorn International 0.80%
Columbia Acorn USA 0.90%
Columbia Acorn International Select 0.94%
Columbia Acorn Select 0.84%
===================================================================
>Expense Limit
Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses
(exclusive of 12b-1 service and distribution fees, interest, taxes and
extraordinary expenses, if any) exceeding 1.45% of the average annual net assets
for Columbia Acorn International Select Class A, Class B and Class C shares and
1.35% of the average annual net assets for Columbia Acorn Select Class A, Class
B and Class C shares.
Columbia WAM provides administrative services and receives an
administration fee from the Funds at the following rates:
COLUMBIA ACORN TRUST
- -------------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset in excess of $16 billion 0.03%
For the six months ended June 30, 2005 each Fund's effective
administration fee rate was 0.043%.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Funds' principal underwriter and receives no
compensation on the sale of Class Z shares.
For the six months ended June 30, 2005, Columbia Acorn Fund, Columbia
Acorn International, Columbia Acorn USA, Columbia Acorn International Select and
Columbia Acorn Select have been advised that CFDI retained $618,687 in
underwriting discounts on the sale of Class A shares and received CDSCs of $880,
$1,489,655, $52,509, respectively, on Class A, Class B and Class C share
redemptions.
Each Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly
service fee equal to 0.25% annually of the average daily net assets attributable
to Class A, Class B and Class C shares. The 12b-1 plan also requires each Fund
to pay CFDI a monthly distribution fee equal to 0.60% and 0.75%, annually, of
the average daily net assets attributable to Class B and Class C shares,
respectively.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Funds. For
such services, the
1-800-922-6769
72
Transfer Agent receives a fee, paid monthly, at the annual rate of $21.00 per
open account. The Transfer Agent also receives reimbursement for certain
out-of-pocket expenses. The Transfer Agent made the decision to waive the
reimbursement for certain out-of-pocket expenses.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for
the six months ended June 30, 2005 were as follows:
- -------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $323
Columbia Acorn International 53
Columbia Acorn USA 21
Columbia Acorn International Select 20
Columbia Acorn Select 65
===================================================================
The Board of Trustees appointed a Chief Compliance Officer to the Trust in
accordance with federal securities regulations. The Funds, along with other
affiliated funds, will pay their pro-rata share of the expenses associated with
the Office of the Chief Compliance Officer. These expenses are disclosed
separately as "Compliance fees" on the Statements of Operations.
The Trust provides a deferred compensation plan for its trustees. Under
that plan, a trustee may elect to defer all or a portion of his or her
compensation. Amounts deferred are retained by the Trust and represent an
unfunded obligation of the Trust. The value of amounts deferred is determined by
reference to the change in value of Class Z shares of one or more series of the
Trust or a money market fund as specified by the trustee. Benefits under the
deferred compensation plan are payable upon retirement.
An affiliate may include any company in which a fund owns five percent or
more of its outstanding voting securities. On June 30, 2005, Columbia Acorn
Fund, Columbia Acorn USA and Columbia Acorn Select each held five percent or
more of the outstanding voting securities of one or more companies. Details of
investments in those affiliated companies are presented on pages 34, 49 and 56,
respectively.
During the six months ended June 30, 2005, the Funds engaged in purchase
and sale transactions with funds that have a common investment adviser (or
affiliated investment advisers), common Directors/Trustees, and/or common
Officers. Those transactions complied with Rule 17a-7 under the Investment
Company Act of 1940 and were as follows:
PURCHASES SALES
- -------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 3,046 $ 1,713
Columbia Acorn International 4,757 623
Columbia Acorn USA -- 311
Columbia Acorn International Select 5,483 92
Columbia Acorn Select -- 912
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at rate per annum equal to the Federal Funds rate
plus 0.50%. In addition, a commitment fee of 0.10% per annum is accrued and
apportioned among the participating funds based on their pro-rata portion of the
unutilized line of credit. The commitment fee is included in "Other expenses" on
the Statements of Operations. No amounts were borrowed under this facility for
the six months ended June 30, 2005.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the six months ended June 30, 2005 were:
COLUMBIA ACORN FUND
- -------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 1,459,490
Proceeds from sales 1,076,808
===================================================================
COLUMBIA ACORN INTERNATIONAL
- -------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 506,385
Proceeds from sales 305,798
===================================================================
COLUMBIA ACORN USA
- -------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 121,693
Proceeds from sales 57,382
===================================================================
COLUMBIA ACORN INTERNATIONAL SELECT
- -------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 24,315
Proceeds from sales 7,891
===================================================================
COLUMBIA ACORN SELECT
- -------------------------------------------------------------------
(IN THOUSANDS)
Investment securities
Purchases $ 465,643
Proceeds from sales 170,312
===================================================================
73
COLUMBIA ACORN FAMILY OF FUNDS
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
7. Redemption Fees
For the six months ended June 30, 2005, the redemption fees for Columbia Acorn
International and Columbia Acorn International Select amounted to $32,722 and
$6,294, respectively.
8. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG and consented to the entry of a
cease-and-desist order by the SEC (the "SEC Order" and together, the
"Settlements"). The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia has agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and desist from violations of the antifraud provisions and certain other
provisions of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts will be distributed in accordance with a distribution plan to
be developed by an independent distribution consultant, who is acceptable to the
SEC staff and the independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are named as
defendants in class and derivative complaints which have been consolidated in a
Multi-District Action in the federal district court for the District of
Massachusetts. These lawsuits contend that defendants permitted certain
investors to market time their trades in certain Columbia Acorn Funds. The
Multi-District Action is ongoing. Accordingly, an estimate of the financial
impact of this litigation on any fund, if any, cannot currently be made.
Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are
also defendants in a consolidated lawsuit filed in the federal district court of
Massachusetts alleging that Columbia WAM used Fund assets to make undisclosed
payments to brokers as an incentive for the brokers to market the Funds over
other mutual funds to investors. The complaint alleges Columbia WAM and the
Trustees of the Trust breached certain common law duties and federal laws.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV");
1-800-922-6769
74
(b) failing to implement the Fund's portfolio valuation and share pricing
policies and procedures; and (c) failing to know and implement applicable rules
and regulations concerning the calculation of NAV. The plaintiffs' complaint was
dismissed by the district court. However, plaintiffs are in the process of
appealing that decision.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. The lawsuit alleges that defendants violated common law duties
to fund shareholders as well as sections of the Investment Company Act of 1940,
by failing to ensure that the Trust funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs allege that defendants failed to submit Proof
of Claims in connection with settlements of securities class action lawsuits
filed against companies in which the funds held positions. The complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to
Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM
have been dismissed as defendants in this lawsuit.
On March 21, 2005, a class action complaint was filed against the Columbia
Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales
Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due
to the alleged market timing of the Columbia Acorn Funds. In addition to the
rescission of sales charges, plaintiffs seek recovery of actual damages,
attorneys' fees and cost. The case has been removed to the federal district
court of Massachusetts.
The Trust and Columbia WAM intend to defend these suits vigorously.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund. In connection with
the events described in detail above, various parties have filed suit against
certain funds, their Boards and/or BOA (and affiliated entities). These suits
are ongoing. However, based on currently available information, the Columbia
Acorn Trust believes that the likelihood that these lawsuits will have a
material adverse impact on any fund is remote, and Columbia WAM believes that
the lawsuits are not likely to materially affect its ability to provide
investment management services to the Funds.
For the six months ended June 30, 2005, Columbia Management has assumed
consulting services and legal fees incurred by the Funds in connection with
these matters and the amounts are as follows:
- -------------------------------------------------------------------
(IN THOUSANDS)
Columbia Acorn Fund $ 85
Columbia Acorn International 13
Columbia Acorn USA 6
Columbia Acorn International Select --*
Columbia Acorn Select 8
===================================================================
* Rounds to less than $500.
9. Subsequent Event
Effective August 22, 2005, the Funds' distributor will be Columbia Management
Distributors, Inc. and the Funds' transfer agent will be Columbia Management
Services, Inc.
75
COLUMBIA THERMOSTAT FUND
>STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005
NUMBER OF SHARES
OR PRINCIPAL AMOUNT (000) VALUE (000)
- -----------------------------------------------------------------
>BOND MUTUAL FUNDS: 59.9%
6,795 Columbia Intermediate Bond Fund,
Class Z $ 61,764
3,436 Columbia Federal Securities Fund,
Class Z 37,035
2,864 Columbia High Yield Fund, Class Z 24,746
- -----------------------------------------------------------------
TOTAL BOND MUTUAL FUNDS
(COST: $122,607) 123,545
>STOCK MUTUAL FUNDS: 39.9%
1,119 Columbia Growth & Income Fund,
Class Z 20,444
2,319 Columbia Growth Stock Fund,
Class Z (b) 20,039
627 Columbia Acorn Fund, Class Z 16,800
602 Columbia Acorn Select, Class Z 12,631
452 Columbia Mid Cap Value Fund,
Class Z 12,551
- -----------------------------------------------------------------
TOTAL STOCK MUTUAL FUNDS
(COST: $67,473) 82,465
>SHORT-TERM OBLIGATIONS: 0.4%
$ 751 Repurchase Agreement with State
Street Bank & Trust dated
6/30/05, due 7/1/05 at 3.00%
collateralized by Federal
National Mortgage Association
Notes, maturing 3/24/08 market
value $769 (repurchase
proceeds: $751) 751
- -----------------------------------------------------------------
(COST: $751) 751
-----------
TOTAL INVESTMENTS: 100.2% 206,761
(COST: $190,831)(a)
CASH AND OTHER ASSETS LESS LIABILITIES: (0.2)% (421)
-----------
TOTAL NET ASSETS: 100% $ 206,340
=================================================================
> Notes to Statement of Investments (in thousands)
(a) At June 30, 2005, for federal income tax purposes cost of investments was
$190,831 and net unrealized appreciation was $15,930 consisting of gross
unrealized appreciation of $16,094 and gross unrealized depreciation of
$164.
(b) Non-income producing security.
1-800-922-6769
76
COLUMBIA THERMOSTAT FUND
>STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2005
- -------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
ASSETS:
Unaffiliated investments, at value (cost: $751) $ 751
Affiliated investments, at value (cost: $190,080) 206,010
Cash 490
Receivable for fund shares sold 153
Expense reimbursement due from Investment Adviser 28
- -------------------------------------------------------------------------------------------------------
Total Assets 207,432
LIABILITIES:
Payable for:
Investments purchased 490
Fund shares redeemed 361
Management fee 16
Administration fee 7
Deferred trustees fee 5
Transfer agent fees 16
Trustees' fees 2
Custody fees 3
Reports to shareholders 73
12b-1 Service & Distribution fees 102
Other liabilities 17
- -------------------------------------------------------------------------------------------------------
Total Liabilities 1,092
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 206,340
=======================================================================================================
COMPOSITION OF NET ASSETS:
Paid in capital $ 187,052
Undistributed net investment income 2,080
Accumulated net realized gain 1,278
Net unrealized appreciation on investments 15,930
- -------------------------------------------------------------------------------------------------------
NET ASSETS $ 206,340
=======================================================================================================
Net asset value per share -- Class A (a) $ 13.04
(Net assets/shares) ($71,945/5,518)
Maximum offering price per share -- Class A (b) $ 13.84
(Net asset value per share/front-end sales charge) ($13.04/0.9425)
Net asset value and offering price per share -- Class B (a) $ 13.02
(Net assets/shares) ($79,557/6,110)
Net asset value and offering price per share -- Class C (a) $ 13.01
(Net assets/shares) ($30,449/2,341)
Net asset value, offering and redemption price per share -- Class Z $ 13.06
(Net assets/shares) ($24,389/1,867)
(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.
77
COLUMBIA THERMOSTAT FUND
>STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2005
(IN THOUSANDS)
- -------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends from affiliated investment company shares $ 2,882
Interest income 11
- -------------------------------------------------------------------------------------------------------
Total Investment Income 2,893
EXPENSES:
Management fee 102
Administration fee 44
12b-1 Service and Distribution fees:
Class A 92
Class B 330
Class C 151
Transfer agent fees:
Class A 45
Class B 65
Class C 23
Class Z 10
Trustees' fees 10
Custody fees 6
Reports to shareholders 67
Compliance fees 4
Non-recurring costs (See Note 7) 1
Other expenses 47
- -------------------------------------------------------------------------------------------------------
Total expenses 997
Less custody fees paid indirectly --*
Less reimbursement of expenses by Investment Adviser (149)
Less reimbursement of expenses by Transfer Agent (19)
Non-recurring costs reimbursed (See Note 7) (1)
- -------------------------------------------------------------------------------------------------------
Net Expenses 828
- -------------------------------------------------------------------------------------------------------
Net Investment Income 2,065
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on:
Affiliated investments 1,532
Distributions from affiliated investment company shares 280
- -------------------------------------------------------------------------------------------------------
Net realized gain 1,812
Net change in unrealized appreciation (depreciation) on investments (1,503)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 309
- -------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 2,374
=======================================================================================================
* Rounds to less than $500.
1-800-922-6769
See accompanying notes to financial statements.
78
COLUMBIA THERMOSTAT FUND
>STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS YEAR ENDED
INCREASE IN NET ASSETS: ENDED JUNE 30, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
OPERATIONS:
Net investment income $ 2,065 $ 3,334
Net realized gain on investments and distributions from affiliated investment
company shares 1,812 3,692
Net change in net unrealized appreciation (depreciation) on investments (1,503) 8,154
- -------------------------------------------------------------------------------------------------------------------------
Net Increase from Operations 2,374 15,180
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income -- Class A -- (1,488)
Net realized gain -- Class A (1,365) (141)
Net investment income -- Class B -- (997)
Net realized gain -- Class B (1,495) (146)
Net investment income -- Class C -- (383)
Net realized gain -- Class C (573) (61)
Net investment income -- Class Z -- (450)
Net realized gain -- Class Z (449) (36)
- -------------------------------------------------------------------------------------------------------------------------
Total Distributions to Shareholders (3,882) (3,702)
SHARE TRANSACTIONS:
Subscriptions -- Class A 7,179 42,302
Distributions reinvested -- Class A 1,229 1,425
Redemptions -- Class A (13,096) (13,080)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A (4,688) 30,647
Subscriptions -- Class B 6,412 27,802
Distributions reinvested -- Class B 1,356 1,024
Redemptions -- Class B (5,578) (6,671)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 2,190 22,155
Subscriptions -- Class C 3,670 12,939
Distributions reinvested -- Class C 523 378
Redemptions -- Class C (4,611) (4,000)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C (418) 9,317
Subscriptions -- Class Z 4,257 8,408
Distributions reinvested -- Class Z 427 470
Redemptions -- Class Z (1,184) (3,140)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class Z 3,500 5,738
- -------------------------------------------------------------------------------------------------------------------------
Net Increase from Share Transactions 584 67,857
- -------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets (924) 79,335
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 207,264 127,929
- -------------------------------------------------------------------------------------------------------------------------
End of period $ 206,340 $ 207,264
- -------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME $ 2,080 $ 15
=========================================================================================================================
See accompanying notes to financial statements.
79
COLUMBIA THERMOSTAT FUND
>STATEMENT OF CHANGES IN NET ASSETS, CONTINUED
(UNAUDITED)
SIX MONTHS YEAR ENDED
CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31,
- -------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS) 2005 2004
Subscriptions -- Class A 551 3,381
Shares issued in reinvestment and capital gains -- Class A 94 110
Less shares redeemed -- Class A (1,006) (1,049)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class A (361) 2,442
Subscriptions -- Class B 493 2,213
Shares issued in reinvestment and capital gains -- Class B 104 79
Less shares redeemed -- Class B (428) (530)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class B 169 1,762
Subscriptions -- Class C 282 1,028
Shares issued in reinvestment and capital gains -- Class C 41 29
Less shares redeemed -- Class C (354) (316)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) -- Class C (31) 741
Subscriptions -- Class Z 327 669
Shares issued in reinvestment and capital gains -- Class Z 33 36
Less shares redeemed -- Class Z (91) (250)
- -------------------------------------------------------------------------------------------------------------------------
Net Increase -- Class Z 269 455
- -------------------------------------------------------------------------------------------------------------------------
Net Increase in Shares of Beneficial Interest 46 5,400
- -------------------------------------------------------------------------------------------------------------------------
1-800-922-6769
See accompanying notes to financial statements.
80
COLUMBIA THERMOSTAT FUND
>FINANCIAL HIGHLIGHTS
(UNAUDITED) INCEPTION
SIX MONTHS MARCH 3, 2003
ENDED YEAR ENDED THROUGH
CLASS A SHARES JUNE 30, DECEMBER 31, DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.11 $ 12.30 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.15 0.28 0.18
Net realized and unrealized gain 0.03 0.81 2.15
- ------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.18 1.09 2.33
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- (0.25) (0.13)
From net realized gains (0.25) (0.03) (0.00)(b)
- ------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.25) (0.28) (0.13)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.04 $ 13.11 $ 12.30
============================================================================================================
Total Return (c)(d) 1.37%(e) 8.92% 23.10%(e)
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f)(g) 0.50%(h) 0.50% 0.57%(h)
Net investment income (g) 2.34%(h) 2.23% 1.86%(h)
Reimbursement 0.15%(h) 0.33% 0.66%(h)
Portfolio turnover rate 35%(e) 67% 61%
Net assets at end of period (000'S) $ 71,945 $ 77,092 $ 42,271
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(UNAUDITED) INCEPTION
SIX MONTHS MARCH 3, 2003
ENDED YEAR ENDED THROUGH
CLASS B SHARES JUNE 30, DECEMBER 31, DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.14 $ 12.32 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.11 0.19 0.10
Net realized and unrealized gain 0.02 0.83 2.16
- ------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.13 1.02 2.26
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- (0.17) (0.04)
From net realized gains (0.25) (0.03) (0.00)(b)
- ------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.25) (0.20) (0.04)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.02 $ 13.14 $ 12.32
============================================================================================================
Total Return (c)(d) 0.99%(e) 8.27% 22.38%(e)
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f)(g) 1.10%(h) 1.18% 1.32%(h)
Net investment income (g) 1.74%(h) 1.55% 1.06%(h)
Reimbursement 0.19%(h) 0.29% 0.66%(h)
Portfolio turnover rate 35%(e) 67% 61%
Net assets at end of period (000'S) $ 79,557 $ 78,040 $ 51,501
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
(UNAUDITED) INCEPTION
SIX MONTHS MARCH 3, 2003
ENDED YEAR ENDED THROUGH
CLASS C SHARES JUNE 30, DECEMBER 31, DECEMBER 31,
- ------------------------------------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.13 $ 12.32 $ 10.10
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a) 0.10 0.19 0.11
Net realized and unrealized gain 0.03 0.81 2.15
- ------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.13 1.00 2.26
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income -- (0.16) (0.04)
From net realized gains (0.25) (0.03) (0.00)(b)
- ------------------------------------------------------------------------------------------------------------
Total Distributions Declared to Shareholders (0.25) (0.19) (0.04)
- ------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.01 $ 13.13 $ 12.32
============================================================================================================
Total Return (c)(d) 0.99%(e) 8.13% 22.38%(e)
- ------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Expenses (f)(g) 1.25%(h) 1.25% 1.32%(h)
Net investment income (g) 1.59%(h) 1.48% 1.10%(h)
Reimbursement 0.18%(h) 0.26% 0.66%(h)
Portfolio turnover rate 35%(e) 67% 61%
Net assets at end of period (000's) $ 30,449 $ 31,161 $ 20,087
(a) Per share data was calculated using average shares outstanding during the
period. Recognition of net investment income by the Fund is affected by
the timing of the declaration of dividends by the underlying investment
companies in which the Fund invests.
(b) Rounds to less than $0.01 per share.
(c) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(d) Had the Investment Adviser and/or Transfer Agent not waived and/or
reimbursed a portion of expenses, total return would have been reduced.
(e) Not annualized.
(f) Does not include expenses of the investment companies in which the Fund
invests.
(g) The benefits derived from custody fees paid indirectly had no impact.
(h) Annualized.
See accompanying notes to financial statements.
81
COLUMBIA THERMOSTAT FUND
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Nature of Operations
Columbia Thermostat Fund (the "Fund"), is a series of Columbia Acorn Trust (the
"Trust"), an open-end management investment company organized as a Massachusetts
business trust. The Fund may issue an unlimited number of shares. The Fund
currently offers four classes of shares: Class A, Class B, Class C and Class Z.
Class A shares are sold with a front-end sales charge. A contingent
deferred sales charge ("CDSC") may be assessed to Class A shares purchased
without an initial sales charge on redemptions made within eighteen months on an
original purchase of $1 million to $25 million.
Class B shares are subject to a CDSC. Class B shares will convert to Class
A shares in three, four or eight years after purchase, depending on the program
under which shares are purchased.
Class C shares are subject to a CDSC on redemptions made within one year
after purchase.
Class Z shares are offered continuously at net asset value. There are
certain restrictions on the purchase of Class Z shares.
The financial highlights for Class Z shares are presented in a separate
semiannual report. The semiannual report for the other series of the Trust is
also included in this report.
The investment objective of the Fund is to provide long-term total return.
The Fund pursues its investment objective by investing in shares of other mutual
funds. As a `fund of funds', under normal circumstances, the Fund allocates at
least 95% of its net assets among a selected group of stock and bond mutual
funds (the "Portfolio Funds") according to the current level of the Standard &
Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's
investment adviser. As of June 30, 2005, the Fund invested in five stock
Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia
Growth & Income Fund, Columbia Mid Cap Value Fund and Columbia Growth Stock
Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia
Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest
up to 5% of its net assets plus any cash received that day in cash, repurchase
agreements, high quality short-term paper and government securities.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses are borne pro rata on the basis of the relative net assets
of all classes, except each class bears certain expenses unique to that class
such as distribution services, transfer agent, and certain other class specific
expenses. Differences in class expenses may result in payment of different
dividend distributions for each class. All the share classes of the Trust have
equal rights with respect to voting subject to class specific arrangements.
2. Significant Accounting Policies
>Security valuation
Investments in Portfolio Funds are valued at their net asset value as reported
by the underlying funds. Repurchase agreements, high quality short-term paper
and government securities having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis, which approximates fair
value.
>Repurchase agreements
The Fund may engage in repurchase agreement transactions. The Fund, through its
custodian, receives delivery of underlying securities collateralizing each
repurchase agreement. The Fund's investment adviser determines that the value of
the underlying securities is at all times at least equal to the resale price. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings.
>Security transactions and investment income
Portfolio Fund transactions are accounted for on the trade date (date the order
to buy or sell is executed). Dividend income and realized gain distributions
from other funds are recorded on the ex-dividend date. Interest income is
recorded on the accrual basis and includes amortization of discounts on
short-term debt obligations when required for federal income tax purposes.
Realized gains and losses from security transactions are reported on an
identified cost basis. Awards from class action litigation may be recorded as a
reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
>Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results may differ from those
estimates.
>Fund share valuation
Fund shares are sold and redeemed on a continuing basis at net asset value. Net
asset value per share is determined daily as of the close of trading on the New
York Stock Exchange ("the Exchange") on each day the Exchange is open for
trading. All income, expenses (other than Class A, Class B and Class C 12b-1
service and distribution fees, and Class A, Class B, Class C and Class Z
transfer agent fees)
1-800-922-6769
82
and realized and unrealized gains (losses) of the Fund are allocated to each
class proportionately on a daily basis for purposes of determining the net asset
value of each class.
>Custody fees/credits
Custody fees are reduced based on the Fund's cash balance maintained with the
custodian. The Fund could have invested a portion of assets utilized in
connection with the expense offset arrangement in an income-producing asset if
it had not entered into such an agreement. The amount is disclosed as a
reduction of total expenses on the Statement of Operations.
>Federal income taxes
The Fund has complied with the provisions of the Internal Revenue Code available
to regulated investment companies and, in the manner provided therein,
distributes all of its taxable income, as well as any net realized gain on sales
of Portfolio Fund shares and any distributions of net realized gains received by
the Fund from its Portfolio Funds, reportable for federal income tax purposes.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required.
>Distributions to Shareholders
Distributions to shareholders are recorded on the ex-date.
3. Federal Tax Information
The tax character of distributions paid during the year ended December 31, 2004
was as follows:
DECEMBER 31,
2004
- ----------------------------------------------
(IN THOUSANDS)
Distributions paid from:
Ordinary Income* $3,645
Long-Term Capital Gains 57
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
4. Transactions with Affiliates
Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect,
wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a
wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes
continuing investment supervision to the Fund and is responsible for the overall
management of the Fund's business affairs.
Under the Fund's investment management agreement, fees are accrued daily
and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's
average daily net assets.
>Expense Limit
Columbia WAM has agreed to contractually reimburse the direct operating expenses
(exclusive of distribution and service fees, interest and fees on borrowings and
expenses associated with the Fund's investment in other investment companies)
exceeding 0.25% of the average annual net assets of the Fund's Class A, Class B
and Class C shares.
Columbia WAM has the right to recoup expense reimbursement payments made
to the Fund through December 31, 2005. This will be accomplished by the payment
of an expense reimbursement fee by the Fund to Columbia WAM computed and paid
monthly, with a limitation that immediately after such payment the Fund's
ordinary operating expenses (excluding any distribution and service fees,
interest and fees on borrowings and expenses associated with the Fund's
investment in other investment companies) will not exceed 0.25% annually.
Columbia WAM provides administrative services
and receives an administration fee from the Fund at the following annual rates:
COLUMBIA ACORN TRUST
- -----------------------------------------------------------------
Average daily net asset value:
On the first $8 billion 0.05%
Next $8 billion 0.04%
Average daily net asset value in excess
of $16 billion 0.03%
For the six months ended June 30, 2005, the Fund's effective
administration fee rate was 0.043%.
Columbia Funds Distributor, Inc. ("CFDI"), an indirect, wholly-owned
subsidiary of BOA, is the Fund's principal indirect underwriter and receives no
compensation on the sale of Class Z shares.
For the six months ended June 30, 2005, the Fund has been advised that
CFDI retained $37,038 in underwriting discounts on the sale of Class A shares
and received CDSCs of $5, $129,112 and $4,402 on Class A, Class B and Class C
share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly
service fee equal to 0.25% annually of the average daily net assets attributable
to Class A, Class B and Class C shares. The 12b-1 plan also requires the Fund
pay CFDI a monthly distribution fee equal to 0.60% and 0.75%, annually, of the
average daily net assets attributable to Class B and Class C shares,
respectively.
Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect,
wholly-owned subsidiary of BOA, provides shareholder services to the Fund. For
such services, the Transfer Agent receives a fee, paid monthly, at the annual
rate of $21.00 per open account. The Transfer Agent also receives reimbursement
for certain out-of-pocket expenses. The Transfer Agent has made the decision to
waive the reimbursement for certain out-of-pocket expenses.
83
COLUMBIA THERMOSTAT FUND
>NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
The Transfer Agent has made the decision to waive the reimbursement for certain
out-of-pocket expenses.
Certain officers and trustees of the Trust are also officers of Columbia
WAM. The Trust makes no direct payments to its officers and trustees who are
affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for
the six months ended June 30, 2005 were $9,720.
The Board of Trustees appointed a Chief Compliance Officer to the Trust 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. This expense is disclosed separately
as "Compliance fees" on the Statement of Operations.
5. Borrowing Arrangements
The Trust participates in a $150 million credit facility, which was entered into
to facilitate portfolio liquidity. Interest is charged to each participating
fund based on its borrowings at 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. No amounts were borrowed under this facility for
the six months ended June 30, 2005.
6. Investment Transactions
The aggregate cost of purchases and proceeds from sales other than short-term
obligations for the six months ended June 30, 2005 were:
- -----------------------------------------------------------------
(IN THOUSANDS)
Purchases $71,861
Proceeds from sales 71,924
=================================================================
7. Legal Proceedings
On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"),
the advisor to the Columbia Funds, and CFDI (collectively with Columbia
Management, "Columbia"), the distributor of the shares of the Columbia Funds,
the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds
(collectively, "the Columbia Family of Funds"), entered into agreements in
principle with the staff of the U.S. Securities and Exchange Commission ("SEC")
and the Office of the New York Attorney General ("NYAG") to resolve the
proceedings brought in connection with the SEC's and NYAG's investigations of
frequent trading and market timing in certain Columbia mutual funds. Columbia
WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors
Trust Funds, was not a respondent in either proceeding nor were any of its
officers or directors.
On February 9, 2005, Columbia entered into an Assurance of Discontinuance
(the "NYAG Settlement") with the NYAG and consented to the entry of a
cease-and-desist order by the SEC (the "SEC Order" and together, the
"Settlements"). The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle. Although none of the
Columbia Acorn Family of Funds is a party to the Settlement orders, under the
terms of the Settlements and in order for Columbia Management to continue to
provide administrative services to the Columbia Acorn Family of Funds, the Board
of Trustees of the Trust expects to comply voluntarily with certain
requirements, including: the election of an independent board chairman, which
the Board had done well in advance of the regulatory proceedings; and the
appointment of one or more individuals to monitor legal compliance and to add
another level of assurance that the management fees to be charged to the Funds
are negotiated at arm's length and are reasonable.
Under the terms of the SEC Order, Columbia has agreed, among other things,
to: pay $70 million in disgorgement and $70 million in civil money penalties;
cease and desist from violations of the antifraud provisions and certain other
provisions of the federal securities laws; maintain certain compliance and
ethics oversight structures; retain an independent consultant to review
Columbia's applicable supervisory, compliance, control and other policies and
procedures; and retain an independent distribution consultant (see below). The
NYAG Settlement also, among other things, requires Columbia and its affiliates,
Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce
management fees paid by the Columbia Family of Funds, Nations Funds and other
related mutual funds collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions based on net assets
as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the
settlement amounts will be distributed in accordance with a distribution plan to
be developed by an independent distribution consultant, who is acceptable to the
SEC staff and the independent trustees of the funds. The distribution plan must
be based on a methodology developed in consultation with Columbia and the
independent trustees of the funds and not unacceptable to the staff of the SEC.
More specific information on the distribution plan will be communicated by
Columbia WAM and/or its affiliates at a later date.
The Trust, Columbia WAM and the Trustees of the Trust are named as
defendants in class and derivative complaints which have been consolidated in a
Multi-District Action in
1-800-922-6769
84
the federal district court for the District of Massachusetts. These lawsuits
contend that defendants permitted certain investors to market time their trades
in certain Columbia Acorn Funds. The Multi-District Action is ongoing.
Accordingly, an estimate of the financial impact of this litigation on any fund,
if any, cannot currently be made.
Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are
also defendants in a consolidated lawsuit filed in the federal district court of
Massachusetts alleging that Columbia WAM used Fund assets to make undisclosed
payments to brokers as an incentive for the brokers to market the Funds over
other mutual funds to investors. The complaint alleges Columbia WAM and the
Trustees of the Trust breached certain common law duties and federal laws.
The Trust and Columbia WAM are also defendants in a class action lawsuit
that alleges, in summary, that the Trust and Columbia WAM exposed shareholders
of Columbia Acorn International Fund to trading by market timers by allegedly:
(a) failing to properly evaluate daily whether a significant event affecting the
value of that Fund's securities had occurred after foreign markets had closed
but before the calculation of the Fund's net asset value ("NAV"); (b) failing to
implement the Fund's portfolio valuation and share pricing policies and
procedures; and (c) failing to know and implement applicable rules and
regulations concerning the calculation of NAV. The plaintiffs' complaint was
dismissed by the district court. However, plaintiffs are in the process of
appealing that decision.
On January 11, 2005 a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Trust
and Columbia WAM. The lawsuit alleges that defendants violated common law duties
to fund shareholders as well as sections of the Investment Company Act of 1940,
by failing to ensure that the Trust funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs allege that defendants failed to submit Proof
of Claims in connection with settlements of securities class action lawsuits
filed against companies in which the funds held positions. The complaint seeks
compensatory and punitive damages, and the disgorgement of all fees paid to
Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM
have been dismissed as defendants in this lawsuit.
On March 21, 2005, a class action complaint was filed against the Columbia
Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales
Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due
to the alleged market timing of the Columbia Acorn Funds. In addition to the
rescission of sales charges, plaintiffs seek recovery of actual damages,
attorneys' fees and cost. The case has been removed to the federal district
court of Massachusetts.
The Trust and Columbia WAM intend to defend these suits vigorously.
As a result of these matters or any adverse publicity or other
developments resulting from them, there may be increased redemptions or reduced
sales of Fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the Fund. In connection with
the events described in detail above, various parties have filed suit against
certain funds, their Boards and/or BOA (and affiliated entities). These suits
are ongoing. However, based on currently available information, the Columbia
Acorn Trust believes that the likelihood that these lawsuits will have a
material adverse impact on any fund is remote, and Columbia WAM believes that
the lawsuits are not likely to materially affect its ability to provide
investment management services to the Funds.
For the six months ended June 30, 2005, Columbia Management has assumed
$1,256 of consulting services and legal fees incurred by the Fund in connection
with these matters.
8. Subsequent Event
Effective August 22, 2005, the Fund's distributor will be Columbia Management
Distributors, Inc. and the Fund's transfer agent will be Columbia Management
Services, Inc.
85
COLUMBIA ACORN FAMILY OF FUNDS CLASS A, B AND C SHARE INFORMATION
MINIMUM INITIAL INVESTMENT IN
COLUMBIA ACORN INTERNATIONAL,
COLUMBIA ACORN INTERNATIONAL
SELECT AND COLUMBIA
THERMOSTAT FUND $1,000
$1,000 FOR AN IRA
MINIMUM INITIAL INVESTMENT
IN COLUMBIA ACORN FUND,
COLUMBIA ACORN USA AND
COLUMBIA ACORN SELECT* $50,000
MINIMUM SUBSEQUENT
INVESTMENT $50
EXCHANGE FEE NONE
COLUMBIA ACORN FUND CLASS A CLASS B CLASS C
Management Fees 0.65% 0.65% 0.65%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.16% 0.25% 0.20%
----------------------------------------------------------
Expense Ratio 1.06% 1.75% 1.85%
COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C
Management Fees 0.80% 0.80% 0.80%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.26% 0.38% 0.30%
----------------------------------------------------------
Expense Ratio 1.31% 2.03% 2.10%
COLUMBIA ACORN USA CLASS A CLASS B CLASS C
Management Fees 0.90% 0.90% 0.90%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.19% 0.28% 0.23%
----------------------------------------------------------
Expense Ratio 1.34% 2.03% 2.13%
COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C
Management Fees 0.94% 0.94% 0.94%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.51% 0.51% 0.51%
----------------------------------------------------------
Expense Ratio 1.70% 2.30% 2.45%
COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C
Management Fees 0.84% 0.84% 0.84%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.16% 0.29% 0.23%
----------------------------------------------------------
Expense Ratio 1.25% 1.98% 2.07%
COLUMBIA THERMOSTAT** CLASS A CLASS B CLASS C
Management Fees 0.10% 0.10% 0.10%
Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00%
Other Expenses 0.15% 0.15% 0.15%
----------------------------------------------------------
Expense Ratio 0.50% 1.10% 1.25%
Fees and expenses are for the six months ended June 30, 2005 and for Columbia
Acorn International Select and Columbia Thermostat Fund include the effect of
Columbia Wanger Asset Management's undertaking to reimburse those funds for any
ordinary operating expenses, exclusive of 12b-1 service and distribution fees,
interest, taxes and extraordinary expenses, if any, exceeding 1.45% and 0.25% of
their average net assets, respectively. The expense limitation for Columbia
Acorn International Select is voluntary and can be terminated by either the Fund
or Columbia Wanger Asset Management, L.P. on 30 days notice. Columbia Thermostat
Fund's reimbursement arrangement is contractual through April 30, 2006. The
Fund's adviser and/or affiliates have contractually agreed to waive a portion of
"other expenses" through April 30, 2006.
* Effective August 5, 2005, the minimum initial investment in Columbia Acorn
Select was raised to $50,000 from $1,000.
** Does not include estimated fees and expenses of 0.85% incurred by the Fund
from the underlying portfolio funds.
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[Excerpts from:]
COLUMBIA ACORN TRUST
Management Fee Evaluation of the Senior Officer
Prepared Pursuant to the New York Attorney General's
Assurance of Discontinuance
July 2005
87
INTRODUCTION
The New York Attorney General's Assurance of Discontinuance ("Order") entered
into by Columbia Management Advisors, Inc. ("CMAI") and Columbia Funds
Distributor, Inc., ("CFDI" and collectively with "CMAI", "CMG") in February
2005, allows CMAI to manage or advise a mutual fund, including the Acorn Trust's
family of funds (the "Acorn Funds" or "Acorn" or "Trust"), only if the trustees
of the Acorn Funds appoint a "Senior Officer" to perform specified duties and
responsibilities. One of these responsibilities includes "managing the process
by which proposed management fees (including but not limited to, advisory fees)
to be charged the Acorn Funds are negotiated so that they are negotiated in a
manner which is at arms' length and reasonable and consistent with this
Assurance of Discontinuance."
The Order also provides that the Board of Trustees of the Acorn Funds ("Board")
must determine the reasonableness of proposed "management fees" by using either
an annual competitive bidding process supervised by the Senior Officer or
Independent Fee Consultant, or by obtaining "an annual independent written
evaluation prepared by or under the direction of the Senior Officer or the
Independent Fee Consultant."
"Management fees" are only part of the costs and expenses paid by mutual fund
shareholders. The expenses can vary depending upon the class of shares held but
usually include: (1) investment management or advisory fees to compensate
analysts and portfolio managers for stock research and portfolio management, as
well as the cost of operating a trading desk; (2) administrative expenses
incurred to prepare registration statements and tax returns, calculate the
Funds' net asset values, maintain effective compliance procedures and perform
recordkeeping services; (3) transfer agency costs for establishing accounts,
accepting and disbursing funds, as well as overseeing trading in Fund shares;
(4) custodial expenses incurred to hold the securities purchased by the Funds;
and (5) distribution expenses, including commissions paid to brokers that sell
the Fund shares to investors.
Columbia Wanger Asset Management, L.P. ("CWAM"), the adviser to the Acorn Funds,
has proposed that the Trust enter into separate agreements governing the first
two categories listed above: an advisory agreement governing portfolio
management, and an administration agreement governing certain administration and
clerical services. Together the fees paid under these two agreements are
referred to as "management fees." Other fund expenses are governed by separate
agreements, in particular agreements with two CWAM affiliates: CFDI, the
broker-dealer that underwrites and distributes the Acorn Funds' shares, and
Columbia Funds Services, Inc. ("CFSI"), the Funds' transfer agent. In conformity
with the terms of the Order, this evaluation, therefore, addresses only the
advisory and administrative contracts between CWAM and the Trust, and does not
extend to the other agreements.
According to the Order, the Senior Officer's evaluation must consider at least
the following:
(1) Management fees (including components thereof) charged to
institutional and other clients of CWAM for like services;
(2) Management fees (including any components thereof) charged by other
mutual fund companies for like services;
(3) Costs to CWAM and its affiliates of supplying services pursuant to
the management fee agreements, excluding any intra-corporate profit;
(4) Profit margins of CWAM and its affiliates from supplying such
services;
(5) Possible economies of scale as the Acorn Funds grow larger; and
(6) The nature and quality of CWAM's services, including the performance
of each Acorn Fund.
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On November 16, 2004, the Board appointed me Senior Officer under the Order. The
Board also determined not to pursue a competitive bidding process and instead,
charged me with the responsibility of evaluating the Acorn Funds' proposed
advisory and administrative fee contracts with CWAM in conformity with the
requirements of the Order. This Report is an annual evaluation required under
the Order. In discharging their responsibilities, the independent Trustees have
also consulted independent, outside counsel.
* * *
This evaluation was performed in cooperation and regular communication with the
Investment Advisory Committee of the Board of Trustees.
PROCESS AND INDEPENDENCE
The objectives of the Order are to insure the independent evaluation of the
advisory fees paid by the Acorn Funds as well as to insure that all relevant
factors are considered. In my view, the contract renewal process has been
conducted at arms-length and with independence in gathering, considering and
evaluating relevant data. For example, the selection of fund peer groups is
critical in assessing a fund's relative performance and cost. I have required
Lipper and Morningstar Inc. to prepare their reports without input or commentary
from CWAM; the engagement letters with them reflect this requirement. As a
result, the peer groups reflected in the Morningstar Inc. and Lipper reports
were determined independently. After submission of the reports, I asked CWAM to
comment on them to avoid errors and to establish a clear record of CWAM's views
on which funds, in its judgment, constitute an appropriate peer group.
Similarly, I discussed CWAM's profitability analysis with its management but
also sought the independent views of Ernst & Young on the reasonableness of
CWAM's cost allocation methodology and on the adequacy of the financial data it
provided. The evaluation of CWAM's profitability was performed in the context of
the limited industry data available.
My evaluation of the advisory contract was shaped by my experience as Acorn's
Chief Compliance Officer ("CCO"). As CCO, I report solely to the Board and have
no reporting obligation to or employment relationship with CMG or its
affiliates, except for administrative purposes. This too contributes to the
independence of this evaluation. I have made several comments on compliance
matters in evaluating the quality of service provided by CWAM and CMG.
Finally, this Report, its supporting materials and the data contained in other
materials submitted to the Investment Advisory Committee of the Board, in my
view, provide a thorough factual basis upon which the Board, in consultation
with independent counsel as it deems appropriate, may conduct management fee
negotiations that are in the best interests of the Acorn Funds' shareholders.
89
* * *
VI. CONCLUSIONS
My review of the data and other material above leads to the following
conclusions with respect to the factors identified in the Order.
1. Performance. The Acorn Funds generally have achieved outstanding
performance. The Acorn Fund, Acorn USA and Acorn Select all rank
very favorably against their peers. The international funds have
good recent performance records, but weaker long-term performance
relative to the other, domestic Acorn Funds. Recent management
changes have been followed by improved performance. The Acorn Funds
typically achieve their performance with less risk than their
competitors.
2. Management Fees relative to Peers. The management fee rankings of
the Funds - particularly on the basis of a combined advisory and
administrative fee basis - are generally above the respective
medians and, hence, more favorable to shareholders than their peer
group funds. Management fees do vary by Fund, with the Acorn Fund
the least expensive and the Acorn USA Fund the most expensive. Acorn
USA is the only fund that both Lipper and Morningstar ranked below
the median.
3. Administrative Fees. The Acorn Funds' administrative fee, which is
uniform across all Funds, is at a level comparable to that of its
peers, provides for appropriate services to Funds, and affords
breakpoints that lower the fee as assets increase.
4. Management Fees relative to Institutional and Other Mutual Fund
Accounts. CWAM's focus is on its mutual funds. It does not actively
seek to manage separate or institutional accounts. The few
institutional accounts it does manage vary in rate structures. Some
pay advisory fees commensurate with or higher than the Acorn Funds.
In a few instances, however, institutional accounts pay lower
advisory fees than do the Acorn Funds. One particular institutional
account is significant in size and has been under CWAM's management
for over 25 years. Finally, in two instances, the Acorn Funds pay
slightly higher fees than do similar funds sold through insurance
companies.
5. Costs to CWAM and its Affiliates. CWAM's costs do not appear
excessive, and, in my view, it uses appropriate methodologies to
allocate overhead costs. CWAM's affiliates do not appear to profit
indirectly from CWAM's advisory agreement with the Acorn Funds.
6. Profit Margins. CWAM's firm-wide profit margins are at the upper end
of the industry, though these comparisons are hampered by limited
industry data. High profit margins are not unexpected for firms that
manage large, successful funds and have provided outstanding
investment performance for investors. CMAI, the Funds'
administrator, currently experiences losses rather than profits in
connection with its activities relating to the Acorn Funds.
7. Economies of Scale. Economies of scale do exist at CWAM and will
expand as the assets of the Acorn Funds get larger. They are,
however, only partially reflected in the management fee schedule for
the Funds. If the Acorn Funds' assets continue to grow, under the
Funds' current fee schedules, shareholders might not benefit in a
manner generally commensurate with CWAM's increased profits.
1-800-922-6769
90
8. Nature and quality of services. This category includes a variety of
considerations that are difficult to quantify, yet can have a
significant bearing on the performance of the Acorn Funds. Several
areas merit comment.
a. Continuity of Management. It is critical that capable and
experienced portfolio managers remain committed to the Funds
and are able to hire and retain analysts to assist them. CWAM
must have in place appropriate incentive plans that align its
management's interests with those of investors. Further, CWAM
must maintain the independence of its investment process,
supported by effective information technology.
b. Compliance. CWAM has a reasonably designed compliance program
and a variety of related services that are valuable to
shareholders, such as systems to ensure best execution of
portfolio transactions and the daily review of security prices
to ensure accuracy of the Acorn Funds' NAV.
c. Administrative Services. The Acorn Funds benefit from a
variety of administrative services that are performed by CWAM
and CMAI, including preparation of registration statements,
calculation of NAV's, accounting services, shareholder
services, and other functions.
In my opinion, these conclusions, taken together, support the reasonableness of
the proposed advisory and administrative fees. In reaching my evaluation, I
weighed heavily the factors of performance and management fees relative to those
paid by competing funds. In this respect, the Acorn Funds provide excellent
performance at costs that generally fall below industry medians.
VII. RECOMMENDATIONS
The Trustees should consider the following proposals to address the issues
identified in this Report. Some of these recommendations require the collection
and evaluation of more data. This work cannot be accomplished effectively before
the expiration of the existing advisory contract on July 31, 2005. Therefore, I
recommend that the Trustees consider extending the existing contract pending
consideration of these recommendations.
These recommendations do not purport to offer the only avenues to address the
opinions and conclusions I have expressed in this Report. Economies of scale,
for example, can be addressed in a variety of ways in a management contract.
Sound business judgment will guide how any particular area is addressed with due
consideration given to all the factors that must be weighed in reaching an
advisory agreement that best serves the Acorn Fund shareholders.
I believe the Trustees should consider the following:
1. Restructure the advisory fee beyond the current breakpoint schedule
to reflect more fully economies of scale. The Trustees might
consider several ways to accomplish this objective, including
instituting a two-tier fee structure that incorporates a complex- or
CWAM-wide fee (including assets held in separate accounts) and a
fund specific fee, with each containing breakpoints to reflect their
separate economies of scale. Another approach is to consider uniform
breakpoints for all Acorn Funds, including breakpoints above current
asset levels.
2. Condition contract renewal on submission of an employment agreement
or management incentive plan designed to ensure the continued
employment of senior management, under terms that align management's
incentives with the interests of the Acorn Funds' shareholders. Any
incentive plan should be designed to
91
permit CWAM to attract and retain the highest caliber investment
professionals and to support them with effective and reliable
information technology systems.
3. Review with CWAM its anticipated capacity limitations and the degree
to which increased staffing and effective incentives may address
those issues.
Robert P. Scales
July 20, 2005
* * *
More complete copies of the Management Fee Evaluation of the Senior
Officer of the Columbia Acorn Trust, edited to delete certain confidential or
proprietary information, are available upon written request to:
R. Scott Henderson
Bank of America
MA-515-11-05
One Financial Center
Boston, MA 02111
EFFECTIVE AUGUST 22, 2005, THE FUNDS' DISTRIBUTOR WILL BE COLUMBIA
MANAGEMENT DISTRIBUTORS, INC. AND THE FUNDS' TRANSFER AGENT WILL BE COLUMBIA
MANAGEMENT SERVICES, INC.
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COLUMBIA ACORN
- ------------------------
FAMILY OF FUNDS
TRUSTEES
Robert E. Nason
CHAIRMAN
Margaret Eisen
Jerome Kahn, Jr.
Steven N. Kaplan
David C. Kleinman
Charles P. McQuaid
Allan B. Muchin
Ralph Wanger
John A. Wing
OFFICERS
Charles P. McQuaid
PRESIDENT
Ben Andrews
VICE PRESIDENT
Michael G. Clarke
ASSISTANT TREASURER
J. Kevin Connaughton
ASSISTANT TREASURER
P. Zachary Egan
VICE PRESIDENT
Kenneth A. Kalina
ASSISTANT TREASURER
Bruce H. Lauer
VICE PRESIDENT, SECRETARY AND TREASURER
Louis J. Mendes
VICE PRESIDENT
Robert A. Mohn
VICE PRESIDENT
Todd M. Narter
VICE PRESIDENT
Christopher J. Olson
VICE PRESIDENT
Vincent P. Pietropaolo
ASSISTANT SECRETARY
Robert P. Scales
CHIEF COMPLIANCE OFFICER, VICE PRESIDENT
GENERAL COUNSEL AND CHIEF LEGAL OFFICER
INVESTMENT ADVISER
Columbia Wanger Asset Management, L.P.
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606
1-800-922-6769
DISTRIBUTOR
Columbia Management Distributors, Inc.
One Financial Center
Boston, Massachusetts 02111-2621
TRANSFER AGENT, DIVIDEND DISBURSING AGENT
Columbia Management Services, Inc.
P.O. Box 8081
Boston, Massachusetts 02266-8081
1-800-345-6611
LEGAL COUNSEL
Bell, Boyd & Lloyd LLC
Chicago, Illinois
THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO
OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800)
922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW
TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES IS AVAILABLE (I) WITHOUT
CHARGE, UPON REQUEST, BY CALLING 800-922-6769 AND (II) ON THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT http://www.sec.gov. INFORMATION REGARDING HOW
THE FUNDS VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE 12-MONTH
PERIOD ENDED JUNE 30, 2004 IS AVAILABLE FROM THE SEC'S WEBSITE.
THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE
FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' FORM N-Q IS
AVAILABLE ON THE SEC'S WEBSITE AT www.sec.gov AND MAY BE REVIEWED AND COPIED AT
THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, D.C. INFORMATION ON THE OPERATION
OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330.
FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT:
WWW.COLUMBIAFUNDS.COM
OUR E-MAIL ADDRESS IS:
SERVICEINQUIRIES@COLUMBIAMANAGEMENT.COM
SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS,
SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE
UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL.
1-800-922-6769
96
PARKING INFORMATION FOR 2005 ANNUAL SHAREHOLDER INFORMATION MEETING
A public lot is located at 172 West Madison, between Wells and LaSalle, on the
north side of the street. The entrance is on Madison. Madison is a one-way west
street. This lot is approximately two blocks west of the Bank One building.
Valet parking is available at 183 West Monroe, between Wells and LaSalle, on the
south side of the street. The entrance is on Monroe. Monroe is a one-way east
street. No vans or trucks are allowed to park at this lot. This lot is
approximately three blocks west of the Bank One building.
55 East Monroe (formerly Mid-Continental Plaza Parking) is located on East
Monroe Street two and one half blocks east of the Bank One building. The
entrance is on the south side (right) of Monroe Street, between Wabash and
Michigan Avenues. Monroe is a one-way street east.
Grant Park Underground (indoor) parking is located 3 1/2 blocks east of the Bank
One building on Monroe Street. The entrance is on the north side of Monroe
Street between Columbus Drive and Lake Shore. Monroe is two-way between Lake
Shore Drive and Michigan Avenue. West of Michigan, Monroe is a one-way east.
For directions using public transportation, call (312) 836-7000 for CTA travel
information or visit the CTA website at www.transitchicago.com. For Metra
information call (312) 322-6777 during business hours or find information at
www.metrarail.com.
[LOCATION MAP]
SAVE THE DATE!
SEPTEMBER 27, 2005
Meet your portfolio managers, analysts
and fellow shareholders
at
Columbia Acorn Funds
2005 Annual Shareholder Information Meeting
Bank One Auditorium, Plaza Level
38 South Dearborn Street
Chicago, IL 60602
Bring your ideas and questions.
We're anxious to hear what's on your mind.
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COLUMBIA ACORN FUNDS SEMIANNUAL REPORT, JUNE 30, 2005 PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
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[EAGLE HEAD LOGO] COLUMBIAFUNDS
A MEMBETR OF COLUMBIA MANAGEMENT GROUP
(c) 2005 COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
ONE FINANCIAL CENTER, BOSTON, MA 02111-2621
800.345.661 WWW.COLUMBIAFUNDS.COM
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 Acorn Trust
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By (Signature and Title) /S/ Charles P. McQuaid
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Charles P. McQuaid, President
Date August 24, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /S/ Charles P. McQuaid
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Charles P. McQuaid, President
Date August 24, 2005
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By (Signature and Title) /S/ Bruce H. Lauer
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Bruce H. Lauer, Treasurer
Date August 24, 2005
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