UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6529
---------------------
Columbia Funds Trust VI
--------------------------------------------------
(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
--------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-426-3698
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Date of fiscal year end: 07/31/05
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Date of reporting period: 07/31/05
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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. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
photo:man and woman
COLUMBIA
GROWTH & INCOME
FUND
Annual Report
July 31, 2005
PRESIDENT'S MESSAGE
Columbia Growth & Income Fund
sidebar
Table of Contents
Fund Profile ...............................1
Performance Information ....................2
Understanding Your Expenses ................3
Economic Update ............................4
Portfolio Managers' Report .................5
Investment Portfolio .......................7
Statement of Assets and Liabilities .......12
Statement of Operations ...................13
Statement of Changes in Net Assets ........14
Notes to Financial Statements .............16
Financial Highlights ......................22
Report of Independent Registered
Public Accounting Firm .................26
Unaudited Information .....................27
Trustees ..................................28
Officers ..................................30
Columbia Funds ............................31
Important Information
About This Report .........................33
The views expressed in the President's Message and Portfolio Managers' Report
reflect the current views of the respective parties. These views are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict so actual outcomes and results may
differ significantly from the views expressed. These views are subject to change
at any time based upon economic, market or other conditions and the respective
parties disclaim any responsibility to update such views. These views may not be
relied on as investment advice and, because investment decisions for a Columbia
Fund are based on numerous factors, may not be relied on as an indication of
trading intent on behalf of any particular Columbia Fund. References to specific
company securities should not be construed as a recommendation or investment
advice.
logo:
Not FDIC Insured o May Lose Value o No Bank Guarantee
end sidebar
DEAR SHAREHOLDER:
photo: Christopher L. Wilson
Columbia Management, the asset management division of Bank of America, is in the
final stages of a significant business integration effort. Over the last year,
we have been integrating various components of the Nations Funds, Galaxy Funds
and Columbia Funds, which will result in a single fund family that covers a wide
range of markets, sectors and asset classes. Our team of talented, seasoned
investment professionals will continue to strive to achieve strong results
within their investment categories. Our objective is not only to provide our
shareholders with the best products but also to enhance the breadth and
availability of our services. Given our ability to now leverage the size and
scale of the Columbia Management business, I am pleased that these efforts will
also result in substantial cost savings to the funds.
Our goal is to create a more simplified, clearly delineated product line.
Through thoughtful project planning and execution, we will initially reduce the
number of retail mutual funds from over 140 to fewer than 90. Earlier this year
several fund mergers and liquidations were successfully completed. As we work to
complete the remaining product and service provider consolidations in the coming
months, we remain committed to building a mutual fund business that meets, and
hopefully exceeds, your desire for personal financial solutions. We will
continue to strive for the highest standards of performance and service
excellence. The asset management business is in a time of transformation and we
are committed to being progressive and innovative in our approach to the
business. We value the confidence you have placed in us to assist you in
managing your funds during these changing times. As with all businesses within
Bank of America, we understand that your trust must be continuously earned and
will remain focused on producing results for you.
In the pages that follow, you'll find a discussion of the economic environment
during the period followed by a detailed report from the fund's manager or
managers on key factors that influenced performance. We encourage you to read
the manager reports carefully and discuss any questions you have with your
financial advisor. As always, we thank you for choosing Columbia Management. We
look forward to helping you keep your long-term financial goals on target in the
years to come.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
Head of Mutual Funds, Columbia Management
Christopher Wilson is Head of Mutual Funds for Columbia Management, responsible
for the day-to-day delivery of mutual fund services to the firm's investors.
With the exception of distribution, Chris oversees all aspects of the mutual
fund services operation, i ncluding treasury, investment accounting and
shareholder and broker services. Chris serves as President of Columbia Funds,
President &CEO of Nations Funds and President of Galaxy Funds. Chris joined Bank
of America in August 2004.
FUND PROFILE
Columbia Growth & Income Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed, and the composition of its
portfolio will change over time.
Top 5 sectors as of 07/31/05 (%)
Financials 31.0
Energy 14.5
Industrials 11.2
Consumer discretionary 7.9
Utilities 6.6
Top 10 holdings as of 07/31/05 (%)
Exxon Mobil 4.5
Citigroup 2.4
Merrill Lynch 2.2
Wells Fargo 2.1
U.S. Bancorp 2.1
Wachovia 2.0
Altria Group 1.9
United Technologies 1.7
Exelon 1.7
Verizon Communications 1.6
Sector breakdowns and portfolio holdings are calculated as a percentage of net
assets.
Management Style is determined by Columbia Management, and is based on the
investment strategy and process as outlined in the fund's prospectus.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
sidebar:
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.
Summary
o For the 12-month period ended July 31, 2005, the fund's class A shares
returned 14.16% without sales charge.
o The fund underperformed the Russell 1000 Value Index as well as the average
return of its peer group, the Morningstar Large Value Category.
o Strong returns from utility and consumer discretionary stocks helped the fund
achieve a solid double-digit return. However, stock selection in the
financials and technology sectors detracted from performance as did an
underweight in technology.
OBJECTIVE
Seeks long-term
growth and income
TOTAL NET ASSETS
$1,835.4 million
artwork: 2 arrows up
Class A shares: 14.16%
Russell 1000
Value Index: 19.04%
MANAGEMENT STYLE
artwork: Equity Style: Value
Size: Large
end sidebar
1
PERFORMANCE INFORMATION
Columbia Growth & Income Fund
Growth of a $10,000 investment 08/01/95 - 07/31/05
mountain chart:
Class A shares Class A shares
without with Russell 1000
sales charge sales charge Value Index
--------------- -------------- ------------
08/1995 $10000 $ 9425 $10000
9942 9370 10141
10285 9694 10508
10219 9632 10404
10592 9983 10931
10532 9926 11205
10817 10195 11554
10991 10359 11642
10999 10367 11840
11403 10747 11885
11688 11016 12034
11511 10849 12043
10891 10265 11588
11233 10587 11920
11726 11052 12394
12028 11337 12874
12911 12169 13807
12604 11879 13630
13469 12694 14291
13494 12718 14501
13018 12269 13979
13806 13012 14566
14627 13786 15381
15209 14335 16041
16596 15642 17247
15972 15054 16633
16865 15895 17637
16059 15135 17145
16666 15708 17903
17038 16058 18426
17213 16223 18164
18464 17403 19387
19373 18259 20573
19363 18250 20711
18866 17781 20405
19569 18444 20666
19217 18112 20302
16110 15183 17281
16823 15856 18273
18211 17164 19689
19335 18223 20607
20454 19278 21307
20996 19789 21478
20119 18962 21175
20783 19588 21613
21354 20126 23632
21057 19847 23372
22304 21021 24050
21722 20473 23345
21476 20241 22479
20660 19472 21694
21528 20290 22944
21763 20511 22765
22788 21477 22874
21568 20328 22129
20734 19542 20485
23062 21736 22984
23062 21736 22717
22908 21590 22956
22621 21321 21906
22764 21455 22180
23608 22251 23414
23840 22469 23629
25058 23617 24210
25201 23752 23312
26489 24965 24480
26393 24876 24573
26137 24634 23890
25285 23831 23047
25786 24303 24176
26258 24748 24720
25635 24161 24171
26325 24811 24120
26135 24633 23153
25218 23768 21523
25178 23730 21338
26165 24660 22578
26345 24830 23111
25918 24428 22933
25594 24123 22969
26902 25355 24056
25832 24346 23231
25816 24332 23347
23012 21689 22007
21206 19987 19960
21382 20152 20112
18401 17343 17875
20017 18866 19200
21530 20292 20409
20617 19432 19524
19881 18738 19051
18756 17678 18543
18681 17607 18574
20002 18852 20209
21638 20394 21514
22149 20875 21783
22058 20789 22108
22417 21128 22452
21996 20731 22232
22761 21453 23593
22987 21665 23914
24561 23149 25387
24925 23492 25834
25608 24135 26387
25487 24022 26154
24881 23450 25516
24896 23464 25777
25578 24107 26385
25107 23663 26013
25396 23936 26382
25774 24292 26791
26017 24521 27236
27107 25548 28614
27866 26263 29573
27375 25801 29046
28265 26640 30008
27821 26221 29596
27423 25846 29067
27868 26265 29767
27976 26368 30092
07/2005 28668 27019 30961
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Growth &Income Fund during the stated time period,
and does not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The Russell 1000 Value Index is
an unmanaged index that measures the performance of those Russell 1000 Index
companies with lower price-to-book ratios and lower forecasted growth values.
Unlike the fund, indices are not investments, they do not incur fees or expenses
and are not professionally managed. It is not possible to invest directly in an
index. Securities in the fund may not match those in an index.
Performance of a $10,000 investment
08/01/95 - 07/31/05 ($)
sales charge without with
Class A 28,668 27,019
Class B 26,593 26,593
Class C 26,559 26,559
Class Z 29,042 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
AVERAGE ANNUAL TOTAL RETURN AS OF 07/31/05 (%)
Share class A B C Z
Inception 07/01/92 07/01/92 07/01/94 02/07/01
Sales charge without with without with without with without
--------------------------------------------------------------------------------------------------------------
1-year 14.16 7.60 13.32 8.32 13.29 12.29 14.47
5-year 4.72 3.48 3.92 3.62 3.92 3.92 4.99
10-year 11.11 10.45 10.27 10.27 10.26 10.26 11.25
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/05 (%)
Share class A B C Z
Sales charge without with without with without with without
--------------------------------------------------------------------------------------------------------------
1-year 9.37 3.08 8.57 3.57 8.51 7.51 9.67
5-year 4.34 3.11 3.56 3.26 3.54 3.54 4.61
10-year 11.19 10.53 10.35 10.35 10.35 10.35 11.33
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES AND MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00%
FOR CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER.
PERFORMANCE RESULTS REFLECT ANY VOLUNTARY WAIVERS OR REIMBURSEMENT OF FUND
EXPENSES BY THE ADVISOR OR ITS AFFILIATES. ABSENT THESE WAIVERS OR REIMBURSEMENT
ARRANGEMENTS, PERFORMANCE RESULTS WOULD HAVE BEEN LOWER.
All results shown assume reinvestment of distributions. Class Z shares are sold
at net asset value with no Rule 12b-1 fees. Class Z shares have limited
eligibility and the investment minimum requirement may vary. Please see the
fund's prospectus for details.
Performance for different share classes will vary based on differences in sales
charges and fees associated with each class.
Class Z share (newer class shares) performance information includes returns of
the fund's class A shares (older class shares), as their expense structures more
closely resemble those for the newer class shares for periods prior to the
inception date of the newer class shares. Total returns are not restated to
reflect any expense differential (e.g., Rule 12b-1 fees) between the older class
shares and the newer class shares. Had the expense differential been reflected,
the returns for the periods prior to the inception of newer class shares would
have been different.
2
UNDERSTANDING YOUR EXPENSES
Columbia Growth & Income Fund
Sidebar:
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o For shareholders who receive their account statements from Columbia
Management Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.345.6611
o For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance
1. Divide your ending account balance by $1,000. For example, if an account
balance was $8,600 at the end of the period, the result would be 8.6
2. In the section of the table below titled "Expenses paid during the period,"
locate the amount for your share class. You will find this number is in the
column labeled "actual." Multiply this number by the result from step 1. Your
answer is an estimate of the expenses you paid on your account during the
period
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also continuing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
ANALYZING YOUR FUND'S EXPENSES BY SHARE CLASS
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
02/01/05 - 07/31/05
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- -------------------------------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1,047.11 1,018.84 6.09 6.01 1.20
Class B 1,000.00 1,000.00 1,043.49 1,015.12 9.88 9.74 1.95
Class C 1,000.00 1,000.00 1,043.19 1,015.12 9.88 9.74 1.95
Class Z 1,000.00 1,000.00 1,048.70 1,020.08 4.83 4.76 0.95
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual 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 fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
3
ECONOMIC UPDATE
Columbia Growth & Income Fund
sidebar:
Summary
For the 12-month period ended
July 31, 2005
o Despite bouts of volatility, the broad stock market generated a solid
double-digit return for the period. Value stocks outperformed growth stocks
and small cap stocks outperformed large cap stocks, as measured by the
Russell 1000 Value Index and the Russell 2000 Index.
artwork: 2 arrows up
Russell 1000
Value Index: 19.04%
Russell 2000 Index: 24.78%
o Investment-grade bonds chalked up modest gains as measured by the Lehman
Brothers Aggregate Bond Index. High-yield bonds led the fixed income markets,
as measured by the Merrill Lynch US High Yield, Cash Pay Index.
artwork: 2 arrows up
Lehman Index: 4.79%
Merrill Lynch Index: 10.85%
The Russell 1000 Value Index is an unmanaged index that tracks the performance
of those Russell 1000 Index companies with lower price to book ratios and lower
forecasted growth values.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
2,000 smallest of the 3,000 largest US companies based on market capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated,
non-convertible investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
end sidebar
The US economy moved ahead at a healthy pace during the 12-month period that
began August 1, 2004 and ended July 31, 2005. Gross domestic product (GDP)
expanded at an annualized rate of approximately 3.8% as job growth helped buoy
consumer spending and rising profits boosted business spending. Record high
energy prices failed to put a significant damper on growth, but we believe they
are beginning to have an impact on the economy at the margins and may have
figured into a dip in consumer confidence readings in July. Yet, overall,
consumers remained optimistic. A robust labor market fueled confidence
throughout the period. Job growth was relatively strong, and unemployment
declined to 5.0%.
Consumer spending continued to grow as retail sales and the housing market
remained strong. In July, auto sales took a significant leap forward in response
to widely-advertised "employee" discounts. The business sector contributed to
the economy's growth. Yet, given a maturing economic cycle, two straight years
of double-digit profit growth and a significant build-up of cash on corporate
balance sheets, business spending was not as robust as expected.
STOCKS MOVE AHEAD DESPITE BOUTS OF VOLATILITY
The S&P 500 Index--a broad measure of large company stock market
performance--returned 14.05% for this reporting period. Although returns were
lackluster in the first three months of the period, most segments of the stock
market bounced back after the presidential election in November. Stocks
retreated again early in 2005 as rising energy prices and higher interest rates
appeared to turn investors cautious once again. However, positive economic
reports helped boost stock returns in the final three months of the period.
Small- and mid-cap stocks outperformed large-cap stocks and value stocks led
growth stocks by a significant margin. Energy and utilities stocks were the
year's best performers.
BONDS DELIVERED MODEST GAINS
The US bond market delivered positive but modest returns despite rising
short-term interest rates, which historically have driven yields on other
maturity ranges higher--and bond prices lower. That was not the case over the
past 12 months. The yield on the 10-year US Treasury note, a bellwether for the
bond market, moved below 4.0% before edging back up to 4.28% at the end of the
period--slightly lower than where it started the period.
In this environment, the Lehman Brothers Aggregate Bond Index returned 4.79% for
the 12-month period. High-yield bonds led the fixed income markets despite a
setback in the spring when GM and Ford bonds were downgraded. The weak patch for
high yield was temporary as generally improved credit ratings, stronger balance
sheets and higher profits for many companies in the high-yield universe helped
get the sector back on track. The Merrill Lynch US High Yield, Cash Pay Index
returned 10.85%.
SHORT-TERM INTEREST RATES MOVED HIGHER
After a year of the lowest short-term interest rates in recent history, the
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.25% to 3.25%1 during the period. From the outset, the Fed indicated
that it would raise short-term interest rates at a "measured pace" in an attempt
to balance economic growth against inflationary pressures, and so far each of
its nine increases have been in one-quarter percentage point increments. In
recent testimony, Fed chairman Greenspan suggested that any future increases
would likely follow the same gradual course.
1 The federal funds rate was raised to 3.5% on August 9, 2005 and to 3.75% on
September 20, 2005.
4
<Page>
PORTFOLIO MANAGERS' REPORT
Columbia Growth & Income Fund
sidebar:
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.
Net asset value per share
as of 07/31/05 ($)
Class A 18.69
Class B 17.50
Class C 17.62
Class Z 18.72
Distributions declared per share
as of 08/01/04 - 07/31/05 ($)
Class A 0.22
Class B 0.10
Class C 0.10
Class Z 0.26
Holdings discussed in this report
as of 07/31/05 (%)
TXU 0.5
Entergy 1.3
Exelon 1.7
Federated Department Stores 1.4
J.C. Penney 1.4
American International Group 0.8
Nokia 0.5
Hewlett-Packard 1.2
Altria Group 1.9
Your fund is actively managed and the composition of the portfolio will change
over time. Information provided is calculated as a percentage of net assets.
end sidebar
For the 12-month period ended July 31, 2005, Columbia Growth & Income Fund class
A shares returned 14.16% without sales charge. The Russell 1000 Value Index
gained 19.04%, and the average return of the Morningstar(R) Large Value Category
was 15.80%.2 Strong returns from utility and consumer discretionary stocks
helped the fund achieve a solid double-digit return. However, stock selection in
the troubled financials sector detracted from performance as did stock selection
and an underweight in the strong-performing technology sector.
STRONG RETURNS FROM UTILITIES AND CONSUMER DISCRETIONARY STOCKS
The utilities sector outperformed all other groups in the portfolio in both
absolute and relative terms and was the largest contributor to the portfolio.
The sector benefited broadly, both because of rising electricity prices and
because of investors' increasing appetite for high dividend-yielding stocks. TXU
led the group with triple-digit returns while Entergy, Con Edison and Exelon
turned in solid performances as well. During the first half of the reporting
period, we sold the fund's position in Con Edison as it reached our price
target. In the consumer discretionary sector, Federated Department Stores and
J.C. Penney, two leading department store chains, did very well as the
management of both companies focused on executing their strategies to improve
store operations.
FINANCIALS CONTINUED TO STRUGGLE
The financials sector continued to struggle as the Federal Reserve Board raised
short-term interest rates. Some names in the insurance group were also troubled
by allegations of fraud and other misconduct brought about by the SEC, with
Marsh & McLennan and American International Group (AIG) being two such holdings
in the fund's portfolio. The group underperformed in relative terms throughout
the year as the absence of several better performing insurance and broker names
worked to the fund's disadvantage. In addition, the fund owned St. Paul
Travelers, an insurance company, which lagged several names in the group. We
eliminated both St. Paul Travelers and Marsh & McLennan in the first six months
of the period due to our concerns over operating fundamentals; however, we
continued to hold AIG. Several of the fund's bank holdings also lagged the
benchmark.
POOR PERFORMANCES BY INFORMATION TECHNOLOGY AND CONSUMER STAPLES
In technology, the portfolio was adversely affected by its underweight in the
sector in addition to weak stock selection. The fund owned Nokia, which made a
positive contribution to performance, but that was offset by the relative
underperformance of Lexmark and Accenture. Lexmark reported weak first quarter
results due to the apparent pricing competition from inkjet printers; moreover,
the company guided investors to expect lower earnings for the second quarter.
During the second half of the year, we sold Lexmark and initiated a position in
Hewlett-Packard. Accenture was also eliminated from the portfolio. We felt the
stock had reached fair valuation relative to its earnings potential and we were
concerned about deteriorating business prospects going forward. An underweight
in Altria Group early in the period hurt relative performance, as the stock
rallied sharply following the company's announcement of a desire to split off
its food businesses in 2006. We gradually
2 (C)2005 by Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be copied
or redistributed for any purpose and may only be used for noncommercial,
personal purposes. The information contained herein is not represented or
warranted to be accurate, correct, complete or timely. Morningstar, Inc.
shall not be responsible for investment decisions, damages or other losses
resulting from the use of this information. Past performance is no guarantee
of future performance. Morningstar, Inc. has not granted consent for it to be
considered or deemed an "expert" under the Securities Act of 1933.
Morningstar Categories compare the performance of funds with similar
investment objectives and strategies.
5
Columbia Growth & Income Fund
moved to an overweight position, as we believed the break-up value of the
company was well in excess of the current stock price. UST fell sharply at the
beginning of the second quarter as it reported weaker-than-expected first
quarter results and lowered its guidance on earnings for the full year 2005.
During the last six months, we sold the position in UST as we became concerned
over competition from lower-priced generic brands.
ABOUT YOUR FUND
On September 16, 2005, the Fund merged into the Nations Value Fund and the
Nations Value Fund was renamed Columbia Large Cap Value Fund.
Lori Ensinger has co-managed Columbia Growth & Income Fund since June 2005 and
has been with the advisor or its predecessors or affiliate organizations since
2001.
/s/ Lori Ensinger
Diane Sobin has co-managed the fund since June 2005 and has been with the
advisor or its predecessors or affiliate organizations since 2001.
/s/ Diane Sobin
David Hoffman has co-managed the fund since June 2005 and has been with the
advisor or its predecessors or affiliate organizations since 2001.
/s/ David Hoffman
Noah Petrucci has co-managed the fund since June 2005 and has been with the
advisor or its predecessors or affiliate organizations since 2002.
/s/ Noah Petrucci
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor and, in the advisor's opinion, undervalued.
If the advisor's assessment of a company's prospects is wrong, the price of the
company's stock may not approach the value the advisor has placed on it.
6
INVESTMENT PORTFOLIO
July 31, 2005 Columbia Growth & Income Fund
Common Stocks - 97.2%
CONSUMER DISCRETIONARY - 7.9%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Auto Components - 0.5% Johnson Controls, Inc. 177,100 10,172,624
Auto Components Total 10,172,624
-----------------------------------------------------------------------------
Hotels, Restaurants & Leisure - 1.5% Carnival Corp. 177,000 9,274,800
Harrah's Entertainment, Inc. 101,024 7,954,630
McDonald's Corp. 311,519 9,710,047
Hotels, Restaurants & Leisure Total 26,939,477
-----------------------------------------------------------------------------
Media - 1.3% News Corp., Class A 1,014,000 16,609,320
Viacom, Inc., Class A 229,594 7,721,246
Media Total 24,330,566
-----------------------------------------------------------------------------
Multiline Retail - 2.8% Federated Department Stores, Inc. 343,988 26,098,370
J.C. Penney Co., Inc. 448,161 25,159,758
Multiline Retail Total 51,258,128
-----------------------------------------------------------------------------
Specialty Retail - 1.8% Limited Brands, Inc. 450,441 10,981,752
Sherwin-Williams Co. 157,221 7,485,292
Staples, Inc. 633,100 14,415,687
Specialty Retail Total 32,882,731
-------------
CONSUMER DISCRETIONARY TOTAL 145,583,526
CONSUMER STAPLES - 6.2%
- ------------------------------------------ -----------------------------------------------------------------------------
Beverages - 1.8% Diageo PLC, ADR 205,875 11,461,061
PepsiCo, Inc. 370,419 20,198,948
Beverages Total 31,660,009
-----------------------------------------------------------------------------
Food Products - 0.5% Cadbury Schweppes PLC, ADR 244,900 9,462,936
Food Products Total 9,462,936
-----------------------------------------------------------------------------
Household Products - 2.0% Clorox Co. 329,143 18,382,637
Kimberly-Clark Corp. 286,267 18,252,384
Household Products Total 36,635,021
-----------------------------------------------------------------------------
Tobacco - 1.9% Altria Group, Inc. 524,515 35,121,524
Tobacco Total 35,121,524
-------------
CONSUMER STAPLES TOTAL 112,879,490
ENERGY - 14.5%
- ------------------------------------------ -----------------------------------------------------------------------------
Energy Equipment & Services - 2.2% Halliburton Co. 402,416 22,555,417
Nabors Industries Ltd. (a) 30,100 1,970,045
Schlumberger Ltd. 179,903 15,065,077
Energy Equipment & Services Total 39,590,539
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
7
July 31, 2005 Columbia Growth & Income Fund
Common Stocks - (continued)
ENERGY - (continued)
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Oil, Gas & Consumable Fuels - 12.3% BP PLC, ADR 279,772 18,431,380
ChevronTexaco Corp. 289,831 16,813,096
ConocoPhillips 455,980 28,539,788
EOG Resources, Inc. 185,800 11,352,380
Exxon Mobil Corp. 1,415,592 83,166,030
Marathon Oil Corp. 251,797 14,694,873
Murphy Oil Corp. 156,200 8,284,848
Occidental Petroleum Corp. 310,200 25,523,256
Williams Companies, Inc. 924,300 19,632,132
Oil, Gas & Consumable Fuels Total 226,437,783
-------------
ENERGY TOTAL 266,028,322
FINANCIALS - 31.0%
- ------------------------------------------ -----------------------------------------------------------------------------
Capital Markets - 6.5% A.G. Edwards, Inc. 108,762 4,818,157
Bank of New York Co., Inc. 802,388 24,697,503
Franklin Resources, Inc. 134,130 10,840,387
Goldman Sachs Group, Inc. 220,207 23,667,848
Merrill Lynch & Co., Inc. 700,154 41,155,052
Morgan Stanley 255,468 13,552,577
Capital Markets Total 118,731,524
-----------------------------------------------------------------------------
Commercial Banks - 10.2% Marshall & Ilsley Corp. 469,371 21,553,516
National City Corp. 274,226 10,121,682
North Fork Bancorporation, Inc. 754,283 20,659,811
PNC Financial Services Group, Inc. 168,505 9,237,444
SunTrust Banks, Inc. 102,100 7,424,712
U.S. Bancorp 1,295,478 38,942,069
UnionBanCal Corp. 67,600 4,822,584
Wachovia Corp. 716,395 36,091,980
Wells Fargo & Co. 637,323 39,093,393
Commercial Banks Total 187,947,191
-----------------------------------------------------------------------------
Diversified Financial Services - 3.4% Citigroup, Inc. 1,002,894 43,625,889
JPMorgan Chase & Co. 523,192 18,384,967
Diversified Financial Services Total 62,010,856
-----------------------------------------------------------------------------
Insurance - 6.5% Allstate Corp. 188,539 11,549,899
Ambac Financial Group, Inc. 193,713 13,916,342
American International Group, Inc. 248,980 14,988,596
Chubb Corp. 135,479 12,033,245
Genworth Financial, Inc., Class A 610,800 19,154,688
Hartford Financial Services Group, Inc. 240,336 19,363,872
Willis Group Holdings Ltd. 262,467 8,703,406
XL Capital Ltd., Class A 277,226 19,910,371
Insurance Total 119,620,419
-----------------------------------------------------------------------------
Real Estate - 2.4% Archstone-Smith Trust, REIT 334,125 14,200,312
Host Marriott Corp., REIT 229,800 4,285,770
Kimco Realty Corp., REIT 226,668 14,883,021
ProLogis, REIT 227,100 10,346,676
Real Estate Total 43,715,779
-----------------------------------------------------------------------------
Thrifts & Mortgage Finance - 2.0% Fannie Mae 245,700 13,724,802
Golden West Financial Corp. 339,000 22,075,680
Thrifts & Mortgage Finance Total 35,800,482
-------------
FINANCIALS TOTAL 567,826,251
See Accompanying Notes to Financial Statements.
8
July 31, 2005 Columbia Growth & Income Fund
Common Stocks - (continued)
HEALTH CARE - 6.5%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Health Care Equipment & Supplies - 0.8% Baxter International, Inc. 359,900 14,133,273
Health Care Equipment & Supplies Total 14,133,273
-----------------------------------------------------------------------------
Health Care Providers & Services - 1.7% Aetna, Inc. 260,376 20,153,102
CIGNA Corp. 110,870 11,835,373
Health Care Providers & Services Total 31,988,475
-----------------------------------------------------------------------------
Pharmaceuticals - 4.0% AstraZeneca PLC 336,900 15,308,736
GlaxoSmithKline PLC, ADR 194,157 9,210,808
Johnson & Johnson 229,005 14,647,160
Novartis AG, ADR 232,833 11,341,295
Pfizer, Inc. 875,858 23,210,237
Pharmaceuticals Total 73,718,236
-------------
HEALTH CARE TOTAL 119,839,984
INDUSTRIALS - 11.2%
- ------------------------------------------ -----------------------------------------------------------------------------
Aerospace & Defense - 5.2% General Dynamics Corp. 236,166 27,203,962
Goodrich Corp. 422,100 18,673,704
Honeywell International, Inc. 457,400 17,966,672
United Technologies Corp. 631,022 31,992,815
Aerospace & Defense Total 95,837,153
-----------------------------------------------------------------------------
Building Products - 0.2% American Standard Companies, Inc. 76,000 3,365,280
Building Products Total 3,365,280
-----------------------------------------------------------------------------
Commercial Services & Supplies - 1.4% Republic Services, Inc. 167,488 6,071,440
Waste Management, Inc. 702,057 19,741,843
Commercial Services & Supplies Total 25,813,283
-----------------------------------------------------------------------------
Industrial Conglomerates - 0.9% General Electric Co. 479,361 16,537,954
Industrial Conglomerates Total 16,537,954
-----------------------------------------------------------------------------
Machinery - 3.5% Caterpillar, Inc. 346,000 18,652,860
Deere & Co. 200,301 14,728,132
Eaton Corp. 218,734 14,292,080
Ingersoll-Rand Co., Ltd., Class A 208,100 16,267,177
Machinery Total 63,940,249
-------------
INDUSTRIALS TOTAL 205,493,919
INFORMATION TECHNOLOGY - 3.3%
- ------------------------------------------ -----------------------------------------------------------------------------
Communications Equipment - 0.5% Nokia Oyj, ADR 622,276 9,925,302
Communications Equipment Total 9,925,302
-----------------------------------------------------------------------------
Computers & Peripherals - 2.5% Dell, Inc. (a) 152,500 6,171,675
Hewlett-Packard Co. 880,600 21,680,372
International Business Machines Corp. 214,397 17,893,574
Computers & Peripherals Total 45,745,621
-----------------------------------------------------------------------------
Semiconductors & Semiconductor Intel Corp. 205,809 5,585,656
Equipment - 0.3% Semiconductors & Semiconductor Equipment Total 5,585,656
-------------
INFORMATION TECHNOLOGY TOTAL 61,256,579
See Accompanying Notes to Financial Statements.
9
July 31, 2005 Columbia Growth & Income Fund
Common Stocks - (continued)
MATERIALS - 6.3%
Shares Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Chemicals - 4.0% Air Products & Chemicals, Inc. 463,502 27,698,879
Ashland, Inc. 129,100 7,933,195
Dow Chemical Co. 378,400 18,144,280
PPG Industries, Inc. 108,699 7,068,696
Rohm and Haas Co. 272,900 12,569,774
Chemicals Total 73,414,824
-----------------------------------------------------------------------------
Containers & Packaging - 0.2% Bemis Co. 126,100 3,404,700
Containers & Packaging Total 3,404,700
-----------------------------------------------------------------------------
Metals & Mining - 0.6% Nucor Corp. 217,700 12,071,465
Metals & Mining Total 12,071,465
-----------------------------------------------------------------------------
Paper & Forest Products - 1.5% MeadWestvaco Corp. 451,232 13,184,999
Weyerhaeuser Co. 204,773 14,125,242
Paper & Forest Products Total 27,310,241
-------------
MATERIALS TOTAL 116,201,230
TELECOMMUNICATION SERVICES - 3.7%
- ------------------------------------------ -----------------------------------------------------------------------------
Diversified Telecommunication Services - 3.7% BellSouth Corp. 557,107 15,376,153
SBC Communications, Inc. 897,442 21,942,457
Verizon Communications, Inc. 868,579 29,731,459
Diversified Telecommunication Services Total 67,050,069
-------------
TELECOMMUNICATION SERVICES TOTAL 67,050,069
UTILITIES - 6.6%
- ------------------------------------------ -----------------------------------------------------------------------------
Electric Utilities - 3.6% Entergy Corp. 308,044 24,008,949
Exelon Corp. 581,201 31,105,878
FPL Group, Inc. 252,284 10,878,486
Electric Utilities Total 65,993,313
-----------------------------------------------------------------------------
Independent Power Producers Duke Energy Corp. 833,200 24,612,728
& Energy Traders - 1.8% TXU Corp. 106,333 9,212,691
Independent Power Producers & Energy Traders Total 33,825,419
-----------------------------------------------------------------------------
Multi-Utilities - 1.2% Dominion Resources, Inc. 129,791 9,586,363
PG&E Corp. 310,199 11,672,789
Multi-Utilities Total 21,259,152
-------------
UTILITIES TOTAL 121,077,884
TOTAL COMMON STOCKS
(COST OF $1,538,399,497) 1,783,237,254
See Accompanying Notes to Financial Statements.
10
July 31, 2005 Columbia Growth & Income Fund
Short-Term Obligation - 2.9%
Par ($) Value ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank &
Trust Co., dated 07/29/05, due 08/01/05 at 3.170%,
collateralized by a U.S. Treasury Bond maturing
11/15/16, market value of $54,631,238 (repurchase
proceeds $53,571,148) 53,557,000 53,557,000
TOTAL SHORT-TERM OBLIGATION
(COST OF $53,557,000) 53,557,000
TOTAL INVESTMENTS - 100.1%
(COST OF $1,591,956,497) (B) 1,836,794,254
OTHER ASSETS & LIABILITIES, NET - (0.1)% (1,440,897)
NET ASSETS - 100.0% 1,835,353,357
NOTES TO INVESTMENT PORTFOLIO:
(a)Non-income producing security.
(b)Cost for federal income tax purposes is $1,591,956,575.
At July 31, 2005, the Fund held investments in the following sectors:
SECTOR (UNAUDITED) % OF NET ASSETS
- -----------------------------------------------------------------------
Financials 31.0%
Energy 14.5
Industrials 11.2
Consumer Discretionary 7.9
Utilities 6.6
Health Care 6.5
Materials 6.3
Consumer Staples 6.2
Telecommunication Services 3.7
Information Technology 3.3
Short-Term Obligation 2.9
Other Assets &Liabilities, Net (0.1)
-----
100.0%
=====
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
11
Statement of Assets and Liabilities
July 31, 2005 Columbia Growth & Income Fund
($)
- ------------------------------------------ -----------------------------------------------------------------------------
Assets Investments, at cost 1,591,956,497
-------------
Investments, at value 1,836,794,254
Cash 329
Receivable for:
Fund shares sold 780,740
Interest 14,148
Dividends 3,255,590
Deferred Trustees' compensation plan 60,100
-------------
Total Assets 1,840,905,161
-----------------------------------------------------------------------------
Liabilities Payable for:
Fund shares repurchased 2,734,046
Investment advisory fee 1,073,935
Transfer agent fee 501,168
Pricing and bookkeeping fees 38,469
Chief compliance officer expenses and fees 1,088
Merger costs 322,301
Custody fee 6,500
Distribution and service fees 731,378
Deferred Trustees' fees 60,100
Other liabilities 82,819
-------------
Total Liabilities 5,551,804
Net Assets 1,835,353,357
-----------------------------------------------------------------------------
Composition of Net Assets Paid-in capital 1,634,890,818
Undistributed net investment income 10,736,855
Accumulated net realized loss (55,112,073)
Net unrealized appreciation on investments 244,837,757
Net Assets 1,835,353,357
-----------------------------------------------------------------------------
Class A Net assets 587,943,920
Shares outstanding 31,460,863
Net asset value per share 18.69(a)
Maximum offering price per share ($18.69/0.9425) 19.83(b)
-----------------------------------------------------------------------------
Class B Net assets 665,732,116
Shares outstanding 38,045,244
Net asset value and offering price per share 17.50(a)
-----------------------------------------------------------------------------
Class C Net assets 77,933,721
Shares outstanding 4,422,413
Net asset value and offering price per share 17.62(a)
-----------------------------------------------------------------------------
Class Z Net assets 503,743,600
Shares outstanding 26,915,138
Net asset value, offering and redemption price per share 18.72
(a)Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b)On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
12
Statement of OPERATIONS
For the Year Ended July 31, 2005 Columbia Growth & Income Fund
($)
- ------------------------------------------ -----------------------------------------------------------------------------
Investment Income Dividends 46,580,456
Interest 217,385
-------------
Total Investment Income (net of foreign taxes
withheld of $287,109) 46,797,841
-----------------------------------------------------------------------------
Expenses Investment advisory fee 12,971,586
Distribution fee:
Class B 5,272,961
Class C 642,047
Service fee:
Class A 1,505,379
Class B 1,757,653
Class C 214,016
Transfer agent fee 3,893,664
Pricing and bookkeeping fees 467,633
Trustees' fees 55,027
Custody fee 94,262
Chief compliance officer expenses and fees (See Note 4) 9,884
Merger costs 322,301
Non-recurring costs (See Note 8) 34,531
Other expenses 473,349
-------------
Total Expenses 27,714,293
Non-recurring costs assumed by Investment Advisor (See Note 8) (34,531)
-------------
Net Expenses 27,679,762
-------------
Net Investment Income 19,118,079
-----------------------------------------------------------------------------
Net Realized and Unrealized Net realized gain on investments 249,994,426
Gain (Loss) on Investments Net change in unrealized appreciation (depreciation) on
investments (22,566,347)
-------------
Net Gain 227,428,079
-------------
Net Increase in Net Assets from Operations 246,546,158
See Accompanying Notes to Financial Statements.
13
Statement of Changes in Net Assets
Columbia Growth & Income Fund
Year Ended July 31,
Increase (Decrease) in Net Assets: 2005 ($) 2004 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Operations Net investment income 19,118,079 16,388,137
Net realized gain on investments 249,994,426 48,265,445
Net change in unrealized appreciation
(depreciation) on investments (22,566,347) 182,278,097
------------ ------------
Net Increase from Operations 246,546,158 246,931,679
-----------------------------------------------------------------------------
Distributions Declared to Shareholders From net investment income:
Class A (7,394,731) (5,897,569)
Class B (4,128,295) (1,496,752)
Class C (487,826) (222,462)
Class Z (7,337,065) (4,825,957)
------------ ------------
Total Distributions Declared to Shareholders (19,347,917) (12,442,740)
-----------------------------------------------------------------------------
Share Transactions Class A:
Subscriptions 63,569,637 110,785,469
Distributions reinvested 6,683,304 5,352,979
Redemptions (175,735,283) (202,240,844)
------------ ------------
Net Decrease (105,482,342) (86,102,396)
Class B:
Subscriptions 31,497,902 63,411,224
Distributions reinvested 3,773,257 1,357,040
Redemptions (171,605,022) (183,048,069)
------------ ------------
Net Decrease (136,333,863) (118,279,805)
Class C:
Subscriptions 4,733,086 12,823,341
Distributions reinvested 436,662 202,402
Redemptions (34,871,246) (43,080,290)
------------ ------------
Net Decrease (29,701,498) (30,054,547)
Class Z:
Subscriptions 102,714,115 136,454,093
Distributions reinvested 6,140,661 4,266,571
Redemptions (137,474,890) (104,262,595)
------------ ------------
Net Increase (Decrease) (28,620,114) 36,458,069
Net Decrease from Share Transactions (300,137,817) (197,978,679)
Total Increase (Decrease) in Net Assets (72,939,576) 36,510,260
-----------------------------------------------------------------------------
Net Assets Beginning of period 1,908,292,933 1,871,782,673
End of period 1,835,353,357 1,908,292,933
Undistributed net investment income,
at end of period 10,736,855 11,362,036
See Accompanying Notes to Financial Statements.
14
Columbia Growth & Income Fund
Year Ended July 31,
2005 2004
- ------------------------------------------ -----------------------------------------------------------------------------
Changes in Shares Class A:
Subscriptions 3,577,011 6,980,307
Issued for distributions reinvested 372,120 342,763
Redemptions (9,972,245) (12,621,689)
------------ ------------
Net Decrease (6,023,114) (5,298,619)
Class B:
Subscriptions 1,888,025 4,264,505
Issued for distributions reinvested 223,270 92,195
Redemptions (10,285,727) (12,190,707)
------------ ------------
Net Decrease (8,174,432) (7,834,007)
Class C:
Subscriptions 282,475 861,203
Issued for distributions reinvested 25,671 13,657
Redemptions (2,100,460) (2,839,364)
------------ ------------
Net Decrease (1,792,314) (1,964,504)
Class Z:
Subscriptions 5,791,641 8,517,555
Issued for distributions reinvested 341,908 273,149
Redemptions (7,651,027) (6,498,126)
------------ ------------
Net Increase (Decrease) (1,517,478) 2,292,578
See Accompanying Notes to Financial Statements.
15
NOTES TO FINANCIAL STATEMENTS
July 31, 2005 Columbia Growth & Income Fund
NOTE 1. ORGANIZATION
Columbia Growth & Income Fund (the "Fund"), a series of Columbia Funds Trust VI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company.
INVESTMENT GOAL
The Fund seeks long-term growth and income.
FUND SHARES
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 5.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Equity securities are valued at the last sale price on the principal exchange on
which they trade, except for securities traded on the NASDAQ, which are valued
at the NASDAQ official close price. Unlisted securities or listed securities for
which there were no sales during the day are valued at the closing bid price on
such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Investments for which market quotations are not readily available, or have
quotations which management believes are not appropriate, are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees. If a
security is valued at a "fair value", such value is likely to be different from
the last quoted market price for the security.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral is at least equal, at all times, to the value
of the repurchase obligation including interest. A repurchase agreement
transaction involves certain risks in the event of default or insolvency of the
counterparty. These risks include possible delays or restrictions upon the
Fund's ability to dispose of the underlying securities and a possible decline in
the value of the underlying securities during the period while the Fund seeks to
assert its rights.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on ex-date. Awards from class action litigation are recorded
as a reduction of cost if the Fund still owns
16
July 31, 2005 Columbia Growth & Income Fund
the applicable securities on the payment date. If the Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
Effective August 1, 2004, the Fund adopted the policy to reduce cost of
investments for financial statement purposes by the distributions received in
excess of income from REITs. The cumulative effect of this accounting change did
not impact the net assets of the Fund, but resulted in reclassifications as
follows:
Decrease in Decrease in Undistributed
Cost Net Investment Income
- --------------------------------------------------------------------------------
$75,704 $75,704
The effect of the change for the year ended July 31, 2005 is as follows:
Increase in Increase in
Unrealized Decrease in Net Net Realized
Appreciation Investment Income Gain
- --------------------------------------------------------------------------------
$30,213 $30,882 $669
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
For the year ended July 31, 2005, permanent book and tax basis differences
resulting primarily from differing treatments for REIT dividends and
non-deductible merger fees were identified and reclassified among the components
of the Fund's net assets as follows:
Undistributed
Net Investment Accumulated
Income Net Realized Loss Paid-In Capital
- --------------------------------------------------------------------------------
$(319,639) $641,941 $(322,302)
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by this
reclassification.
The tax character of distributions paid during the years ended July 31, 2005 and
July 31, 2004 was as follows:
Year Ended July 31,
2005 2004
- --------------------------------------------------------------------------------
Distributions paid from:
- --------------------------------------------------------------------------------
Ordinary income $ 19,347,917 $ 12,442,740
- --------------------------------------------------------------------------------
Long-term capital gains -- --
As of July 31, 2005, the components of distributable earnings on a tax basis
were as follows:
Undistributed
Undistributed Long-Term Net Unrealized
Ordinary Income Capital Gains Appreciation*
- --------------------------------------------------------------------------------
$10,800,586 $-- $244,837,679
* The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales and REIT adjustments.
17
July 31, 2005 Columbia Growth & Income Fund
Unrealized appreciation and depreciation at July 31, 2005, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $267,968,671
Unrealized depreciation (23,130,992)
- --------------------------------------------------------------------------------
Net unrealized appreciation $244,837,679
The following capital loss carryforwards may be available to reduce taxable
income arising from future net realized gains on investments, if any, to the
extent permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforward
- --------------------------------------------------------------------------------
2011 $55,111,994
Capital loss carryforwards of $250,554,250 were utilized during the year ended
July 31, 2005 for the Fund.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, Inc. ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund and provides administrative and other services to the Fund. Effective
on or about September 30, 2005, Columbia Management Advisors, Inc. will undergo
a name change to Columbia Management Advisors, LLC. Columbia receives a monthly
investment advisory fee based on the Fund's average daily net assets at the
following annual rates:
Average Daily Net Assets Annual Fee Rate
- --------------------------------------------------------------------------------
First $500 million 0.77%
- --------------------------------------------------------------------------------
Next $500 million 0.72%
- --------------------------------------------------------------------------------
$1 billion to $6 billion 0.60%
- --------------------------------------------------------------------------------
Over $6 billion 0.58%
Prior to November 1, 2004, Columbia received a monthly investment advisory fee
based on the Fund's average daily net assets at the following annual rates:
Average Daily Net Assets Annual Fee Rate
- --------------------------------------------------------------------------------
First $1 billion 0.80%
- --------------------------------------------------------------------------------
Over $1 billion 0.60%
For the year ended July 31, 2005, the Fund's effective investment advisory fee
rate was 0.68%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street"). As a result, Columbia pays the total fees received
to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund. For the year ended July 31, 2005, the effective pricing and
bookkeeping fee rate for the Fund, inclusive of out-of-pocket expenses, was
0.025%.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund and has contracted with Boston
Financial Data Services ("BFDS") to serve as sub-transfer agent. For such
services, the Transfer Agent receives a fee, paid monthly, at the annual rate of
$28.00 per open account. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
Effective on or about September 30, 2005, Columbia Funds Services, Inc. will
undergo a name change to Columbia
Management Services, Inc.
For the year ended July 31, 2005, the Fund's effective transfer agent fee rate,
inclusive of out-of-pocket expenses, was 0.21%.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the year ended July 31, 2005, the
Distributor has retained net underwriting discounts of $64,240 on sales of the
Fund's Class A shares and received net CDSC fees of $5,059, $1,669,761 and
$16,205 on Class A, Class B and Class C share redemptions, respectively.
18
July 31, 2005 Columbia Growth & Income Fund
Effective August 22, 2005, Columbia Funds Distributor, Inc. changed its name to
Columbia Management Distributors, Inc.
The Fund has adopted a 12b-1 plan (the "Plan") which allows the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets of the Fund attributable to Class A, Class B and Class
C shares. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if it had not entered into such an agreement. For
the year ended July 31, 2005, there were no such credits.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. Effective
August 23, 2004, the Board of Trustees appointed a Chief Compliance Officer to
the Fund in accordance with federal securities regulations. The Fund, along with
other affiliated funds, will pay its pro-rata share of the expenses associated
with the Chief Compliance Officer position. The Fund's fee will not exceed
$15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the year ended July 31, 2005, the Fund paid $3,444 to Columbia
for such services. This amount is included in "Other expenses" on the Statement
of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the year ended July 31, 2005, the cost of purchases and proceeds from sales
of securities, excluding short-term obligations, were $1,136,240,504 and
$1,479,764,636, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 committed
unsecured revolving line of credit provided by State Street Bank and Trust
Company. Borrowings are used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each participating fund based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.10% per annum is accrued and apportioned among
the participating funds based on their pro-rata portion of the unutilized line
of credit. The commitment fee is included in "Other expenses" on the Statement
of Operations.
For the year ended July 31, 2005, the Fund did not borrow under this
arrangement.
NOTE 7. SHARES OF BENEFICIAL INTEREST
As of July 31, 2005, Bank of America and/or its affiliates held 3.0% of the
shares outstanding of the Fund. Subscription and redemption activity of this
account may have a significant effect on the operations of the Fund.
NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS
AND CONTINGENCIES
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order
19
July 31, 2005 Columbia Growth & Income Fund
by the Securities and Exchange Commission ("SEC") (the "SEC Order"). The SEC
Order and the NYAG Settlement are referred to collectively as the "Settlements."
The Settlements contain substantially the same terms and conditions as outlined
in the agreements in principle which Columbia Group entered into with the SEC
and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution consultant
(see below). The Columbia Funds have also undertaken to implement certain
governance measures designed to maintain the independence of their boards of
trustees. The NYAG Settlement also, among other things, requires Columbia and
its affiliates, Banc of America Capital Management, LLC and BACAP Distributors,
LLC to reduce certain Columbia Funds, Nations Funds and other mutual funds
management fees collectively by $32 million per year for five years, for a
projected total of $160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant, who
is acceptable to the SEC staff and the Columbia Funds' independent trustees. The
distribution plan must be based on a methodology developed in consultation with
the Columbia Group and the Fund's independent trustees and not unacceptable to
the staff of the SEC. At this time, the distribution plan is still under
development. As such, any gain to the Fund or its shareholders cannot currently
be determined.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of fund
shares, which could increase transaction costs or operating expenses, or have
other adverse consequences for the funds.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov. A
copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain funds, the Trustees of the Columbia Funds,
FleetBoston Financial Corporation and its affiliated entities and/or Bank of
America and its affiliated entities. More than 300 cases including those filed
against entities unaffiliated with the funds, their Boards, FleetBoston
Financial Corporation and its affiliated entities and/or Bank of America and its
affiliated entities have been transferred to the Federal District Court in
Maryland and consolidated in a multi-district proceeding (the "MDL").
The derivative cases purportedly brought on behalf of the Columbia Funds in the
MDL have been consolidated under the lead case. The fund derivative plaintiffs
allege that the funds were harmed by market timing and late trading activity and
seek, among other things, the removal of the trustees of the Columbia Funds,
removal of the Columbia Group, disgorgement of all management fees and monetary
damages.
On March 21, 2005 purported class action plaintiffs filed suit in Massachusetts
state court alleging that the conduct, including market timing, entitles Class B
shareholders in certain Columbia Funds to an exemption from contingent deferred
sales charges upon early redemption ("the CDSC Lawsuit"). The CDSC Lawsuit has
been removed to federal court in Massachusetts and the federal Judicial Panel
has transferred the CDSC Lawsuit to the MDL.
The MDL is ongoing. Accordingly, an estimate of the financial impact of this
litigation on any Fund, if any, cannot currently be made.
On January 11, 2005, a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the
Columbia Funds and Columbia. The lawsuit alleges that defendants violated common
law duties to fund shareholders as well as sections of the Investment Company
Act of 1940, by failing to ensure that the Fund and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs allege that defendants failed to submit proof
of claims in connection with settlements of securities class action lawsuits
filed against companies in which the funds held positions.
20
July 31, 2005 Columbia Growth & Income Fund
In 2004, certain Columbia Funds, advisers and affiliated entities were named as
defendants in certain purported shareholder class and derivative actions making
claims, including claims under the Investment Company and the Investment
Advisers Acts of 1940 and state law. The suits allege, inter alia, that the fees
and expenses paid by the funds are excessive and that the advisers and their
affiliates inappropriately used fund assets to distribute the funds and for
other improper purpose. On March 2, 2005, the actions were consolidated in the
Massachusetts federal court as In re Columbia Entities Litigation. The
plaintiffs filed a consolidated amended complaint on June 9, 2005.
The Fund and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings are
ongoing, however, based on currently available information, Columbia believes
that these lawsuits are without merit, that the likelihood they will have a
material adverse impact on any fund is remote, and that the lawsuits are not
likely to materially affect its ability to provide investment management
services to its clients, including the Fund.
For the year ended July 31, 2005, Columbia has assumed $34,531 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
NOTE 9. SUBSEQUENT EVENT
On September 16, 2005, the Fund merged into the Nations Value Fund and the
Nations Value Fund was renamed Columbia Large Cap Value Fund.
21
FINANCIAL HIGHLIGHTS
Columbia Growth & Income Fund
Selected data for a share outstanding throughout each period is as follows:
YEAR ENDED PERIOD
JULY 31, ENDED YEAR ENDED JUNE 30,
-------------------------- JULY 31, ----------------------------------------
CLASS A SHARES 2005 2004 2003 (A) 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 16.57 $ 14.69 $ 14.75 $ 15.67 $ 18.98 $ 20.60
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.22 0.18 0.02 0.11 0.11 0.12
Net realized and unrealized
gain (loss) on investments 2.12 1.84 (0.08) (0.72) (1.89) 2.59
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 2.34 2.02 (0.06) (0.61) (1.78) 2.71
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.22) (0.14) -- (0.06) (0.10) --
From net realized gains -- -- -- (0.25) (1.43) (4.33)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders (0.22) (0.14) -- (0.31) (1.53) (4.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 18.69 $ 16.57 $ 14.69 $ 14.75 $ 15.67 $ 18.98
Total return (c) 14.16% 13.83%(d) (0.41)%(d)(e) (3.75)%(d) (10.24)%(d) 13.34%(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.21% 1.21% 1.36%(g) 1.40% 1.31% 1.32%
Net investment income (f) 1.25% 1.11% 1.93%(g) 0.83% 0.60% 0.62%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03%
Portfolio turnover rate 60% 52% 6%(e) 63% 47% 104%
Net assets, end of period (000's) $587,944 $621,243 $628,680 $635,415 $761,122 $503,647
- ------------------------------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to July 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(d)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e)Not annualized.
(f)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g)Annualized.
22
Columbia Growth & Income Fund
Selected data for a share outstanding throughout each period is as follows:
YEAR ENDED PERIOD
JULY 31, ENDED YEAR ENDED JUNE 30,
-------------------------- JULY 31, ----------------------------------------
CLASS B SHARES 2005 2004 2003 (A) 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 15.53 $ 13.78 $ 13.84 $ 14.77 $ 18.01 $ 19.88
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.08 0.05 0.01 0.01 (0.03) (0.03)
Net realized and unrealized
gain (loss) on investments 1.99 1.73 (0.07) (0.69) (1.77) 2.49
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 2.07 1.78 (0.06) (0.68) (1.80) 2.46
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.10) (0.03) -- -- (0.01) --
From net realized gains -- -- -- (0.25) (1.43) (4.33)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders (0.10) (0.03) -- (0.25) (1.44) (4.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 17.50 $ 15.53 $ 13.78 $ 13.84 $ 14.77 $ 18.01
Total return (c) 13.32% 12.92%(d) (0.43)%(d)(e) (4.50)%(d) (10.89)%(d) 12.46%(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.96% 1.96% 2.11%(g) 2.15% 2.06% 2.07%
Net investment income (loss) (f) 0.50% 0.36% 1.18%(g) 0.07% (0.15)% (0.13)%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03%
Portfolio turnover rate 60% 52% 6%(e) 63% 47% 104%
Net assets, end of period (000's) $665,732 $718,022 $745,122 $752,605 $895,904 $883,754
- ------------------------------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to July 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(d)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e)Not annualized.
(f)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g)Annualized.
23
Columbia Growth & Income Fund
Selected data for a share outstanding throughout each period is as follows:
YEAR ENDED PERIOD
JULY 31, ENDED YEAR ENDED JUNE 30,
-------------------------- JULY 31, ----------------------------------------
CLASS C SHARES 2005 2004 2003 (A) 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 15.64 $ 13.88 $ 13.94 $ 14.87 $ 18.12 $ 19.99
- ------------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) (b) 0.08 0.05 0.01 0.01 (0.03) (0.02)
Net realized and unrealized
gain (loss) on investments 2.00 1.74 (0.07) (0.69) (1.78) 2.48
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 2.08 1.79 (0.06) (0.68) (1.81) 2.46
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.10) (0.03) -- -- (0.01) --
From net realized gains -- -- -- (0.25) (1.43) (4.33)
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders (0.10) (0.03) -- (0.25) (1.44) (4.33)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 17.62 $ 15.64 $ 13.88 $ 13.94 $ 14.87 $ 18.12
Total return (c) 13.29% 12.90%(d) (0.43)%(d)(e) (4.47)%(d) (10.88)%(d) 12.38%(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (f) 1.96% 1.96% 2.11%(g) 2.15% 2.06% 2.06%
Net investment income (loss) (f) 0.50% 0.36% 1.19%(g) 0.08% (0.15)% (0.13)%
Waiver/reimbursement -- 0.01% 0.05%(g) 0.04% 0.05% 0.03%
Portfolio turnover rate 60% 52% 6%(e) 63% 47% 104%
Net assets, end of period (000's) $77,934 $97,226 $113,542 $115,314 $129,661 $77,565
- ------------------------------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to July 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(d)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(e)Not annualized.
(f)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(g)Annualized.
24
Columbia Growth & Income Fund
Selected data for a share outstanding throughout each period is as follows:
YEAR ENDED PERIOD PERIOD
JULY 31, ENDED YEAR ENDED JUNE 30, ENDED
-------------------------- JULY 31, ------------------------- JUNE 30,
CLASS Z SHARES 2005 2004 2003 (A) 2003 2002 2001(c)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 16.59 $ 14.71 $ 14.76 $ 15.68 $ 19.00 $ 19.64
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.27 0.22 0.03 0.16 0.16 0.06
Net realized and unrealized
gain (loss) on investments 2.12 1.84 (0.08) (0.74) (1.88) (0.70)
------------ ------------ ------------ ------------ ------------ ------------
Total from Investment Operations 2.39 2.06 (0.05) (0.58) (1.72) (0.64)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.26) (0.18) -- (0.09) (0.17) --
From net realized gains -- -- -- (0.25) (1.43) --
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions Declared to Shareholders (0.26) (0.18) -- (0.34) (1.60) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 18.72 $ 16.59 $ 14.71 $ 14.76 $ 15.68 $ 19.00
Total return (e) 14.47% 14.08%(f) (0.34)%(f)(g) (3.52)%(f) (9.94)%(f) (3.26)%(f)(g)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 0.96% 0.96% 1.11%(i) 1.15% 1.06% 1.08%(i)
Net investment income (h) 1.50% 1.38% 2.18%(i) 1.13% 0.85% 0.86%(i)
Waiver/reimbursement -- 0.01% 0.05%(i) 0.04% 0.05% 0.03%(i)
Portfolio turnover rate 60% 52% 6%(g) 63% 47% 104%
Net assets, end of period (000's) $503,744 $471,803 $384,438 $383,150 $200,908 $264,425
- ------------------------------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to July 31.
(b)On July 29, 2002, the Fund's existing Class Z shares were combined into the
Fund's Class S shares, which were subsequently redesignated as Class Z
shares.
(c)Class Z shares were initially offered on February 7, 2001. Per share data and
total return reflect activity from that date.
(d)Per share data was calculated using average shares outstanding during the
period.
(e)Total return at net asset value assuming all distributions reinvested.
(f)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(g)Not annualized.
(h)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i)Annualized.
25
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Columbia Growth & Income Fund
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST VI
AND THE SHAREHOLDERS OF COLUMBIA GROWTH
& Income Fund
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Growth & Income Fund (the
"Fund") (a series of Columbia Funds Trust VI) at July 31, 2005, and the results
of its operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States), which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at July 31, 2005 by correspondence with the custodian and brokers,
provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 23, 2005
26
UNAUDITED INFORMATION
Columbia Growth & Income Fund
FEDERAL INCOME TAX INFORMATION
100% of the ordinary income distributed by the Fund for the year ended July 31,
2005, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 100%, or the maximum amount allowable under the
Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the
Fund for the period August 1, 2004 to July 31, 2005 may represent qualified
dividend income. Final information will be provided in your 2005 1099-Div Form.
27
TRUSTEES
Columbia Growth & Income Fund
The Trustees/Directors serve terms of indefinite duration. The names, addresses
and ages of the Trustees/Directors and officers of the Funds in the Columbia
Funds Complex, the year each was first elected or appointed to office, their
principal business occupations during at least the last five years, the number
of portfolios overseen by each Trustee/Director and other directorships they
hold are shown below. Each officer listed below serves as an officer of each
Fund in the Columbia Funds Complex.
Name, address and age, Position with funds, Principal occupation(s) during past five years, Number of portfolios
Year first elected or appointed to office(1) in Columbia Funds Complex overseen by trustee/director, Other directorships held
DISINTERESTED TRUSTEES
DOUGLAS A. HACKER (Age 49) Executive Vice President-Strategy of United Airlines (airline) since December,
P.O. Box 66100 2002 (formerly President of UAL Loyalty Services (airline) from September, 2001 to
Chicago, IL 60666 December, 2002; Executive Vice President and Chief Financial Officer of United
Trustee (since 1996) Airlines from July, 1999 to September, 2001; Senior Vice President-Finance from
March, 1993 to July, 1999). Oversees 101, Nash Finch Company (food distributor)
-----------------------------------------------------------------------------------
JANET LANGFORD KELLY (Age 47) Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm); Adjunct Professor
9534 W. Gull Lake Drive of Law, Northwestern University, since September, 2004 (formerly Chief
Richland, MI 49083-8530 Administrative Officer and Senior Vice President, Kmart Holding Corporation
Trustee (since 1996) (consumer goods), from September, 2003 to March, 2004; Executive Vice
President-Corporate Development and Administration, General Counsel and Secretary,
Kellogg Company (food manufacturer), from September, 1999 to August, 2003; Senior
Vice President, Secretary and General Counsel, Sara Lee Corporation (branded,
packaged, consumer-products manufacturer) from January, 1995 to September, 1999).
Oversees 101, None
-----------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and Chief Executive Officer,
10701 Charleston Drive U.S. Plywood Corporation (building products manufacturer)). Oversees 103(3), None
Vero Beach, FL 32963
Trustee (since 1995)
-----------------------------------------------------------------------------------
CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since January, 1976; Ford and
Department of Economics Louisa Van Voorhis Professor of Political Economy, University of Washington, since
University of Washington September, 1993 (formerly Director, Institute for Economic Research, University of
Seattle, WA 98195 Washington from September, 2001 to June, 2003) Adjunct Professor of Statistics,
Trustee (since 1981) University of Washington, since September, 1980; Associate Editor, Journal of
Money Credit and Banking, since September, 1993; consultant on econometric and
statistical matters. Oversees 101, None
-----------------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 63) Academic Vice President and Dean of Faculties since August, 1999, Boston College
84 College Road (formerly Dean Boston College School of Management from September, 1977 to
Chestnut Hill, MA 02467-3838 August, 1999). Oversees 103(3), Saucony, Inc. (athletic footwear)
Trustee (since 1985)
-----------------------------------------------------------------------------------
28
Columbia Growth & Income Fund
Name, address and age, Position with funds, Principal occupation(s) during past five years, Number of portfolios in Columbia
Year first elected or appointed to office(1) Funds Complex overseen by trustee/director, Other directorships held
DISINTERESTED TRUSTEES
PATRICK J. SIMPSON (Age 61) Partner, Perkins Coie L.L.P. (law firm). Oversees 101, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
-----------------------------------------------------------------------------------
THOMAS E. STITZEL (Age 69) Business Consultant since 1999 (formerly Professor of Finance from 1975 to 1999,
2208 Tawny Woods Place College of Business, Boise State University); Chartered Financial Analyst.
Boise, ID 83706 Oversees 101, None
Trustee (since 1998)
-----------------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 68) Partner and Senior Advisor, Chicago Growth Partners (private equity investing)
8 Sound Shore Drive, since September, 2004 (formerly Managing Director, William Blair Capital Partners
Suite 285 (private equity investing) from September, 1994 to September, 2004). Oversees 101,
Greenwich, CT 06830 Anixter International (network support equipment distributor); Ventas, Inc. (real
Trustee and Chairman of the Board(4) estate investment trust); Jones Lang LaSalle (real estate management services) and
(since 1996) Ambac Financial Group (financial guaranty insurance)
-----------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 59) Retired since 1997 (formerly General Manager, Global Education Industry, IBM
359 Stickney Hill Road Corporation (computer and technology) from 1994 to 1997). Oversees 101,
Hopkinton, NH 03229 Chairman of the Board of Directors, Enesco Group, Inc. (designer, importer and
Trustee (since 1998) distributor of giftware and collectibles)
-----------------------------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 64) Retired since December 2003 (formerly Chairman and Chief Executive Officer, The
100 S.W. Market Street #1500 Regence Group (regional health insurer); Chairman and Chief Executive Officer,
Portland, OR 97207 BlueCross BlueShield of Oregon; Certified Public Accountant, Arthur Young &
Trustee (since 1991) Company). Oversees 101, Northwest Natural Gas Co. (natural gas service provider)
-----------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER(2) (Age 65) Partner, Park Avenue Equity Partners (private equity) since February, 1999
399 Park Avenue (formerly Partner, Development Capital LLC from November 1996 to February, 1999).
Suite 3204 Oversees 103(3), Lee Enterprises (print media), WR Hambrecht + Co. (financial
New York, NY 10022 service provider); Reader's Digest (publishing); OPENFIELD Solutions (retail
Trustee (since 1994) industry technology provider)
-----------------------------------------------------------------------------------
(1)In December 2000, the boards of each of the former Liberty Funds and former
Stein Roe Funds were combined into one board of trustees responsible for the
oversight of both fund groups (collectively, the "Liberty Board"). In October
2003, the trustees on the Liberty Board were elected to the boards of the
Columbia Funds (the "Columbia Board") and of the CMG Fund Trust (the "CMG
Funds Board"); simultaneous with that election, Patrick J. Simpson and
Richard L. Woolworth, who had been directors on the Columbia Board and
trustees on the CMG Funds Board, were appointed to serve as trustees of the
Liberty Board. The date shown is the earliest date on which a
trustee/director was elected or appointed to the board of a Fund in the
Columbia Funds Complex.
(2)Mr. Mayer is an "interested person" (as defined in the Investment Company Act
of 1940 (1940 Act)) by reason of his affiliation with WR Hambrecht + Co.
(3)Messrs. Lowry, Neuhauser and Mayer also serve as directors/trustees of the
Liberty All-Star Funds, currently consisting of 2 funds, which are advised by
an affiliate of the Advisor.
(4)Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
The Statement of Additional Information Includes additional information about
the Trustees of the Funds and is available, without charge, upon request by
calling 800-426-3750.
29
OFFICERS
Columbia Growth & Income Fund
Name, address and age, Position with
Columbia Funds, Year first elected or
appointed to office Principal occupation(s) during past five years
CHRISTOPHER L. WILSON (Age 48) Head of Mutual Funds since August, 2004 and Senior Vice President of the Advisor
One Financial Center since January, 2005; President of the Columbia Funds, Liberty Funds and Stein
Boston, MA 02111 Roe Funds since October, 2004; President and Chief Executive Officer of the
President (since 2004) Nations Funds since January, 2005; President of the Galaxy Funds since April 2005;
Director of Bank of America Global Liquidity Funds, plc since May 2005; Director
of Banc of America Capital Management (Ireland), Limited since May 2005; Senior
Vice President of BACAP Distributors LLC since January, 2005; Director of FIM
Funding, Inc. since January, 2005; Senior Vice President of Columbia Funds
Distributor, Inc. since January, 2005; Director of Columbia Funds Services, Inc.
since January, 2005 (formerly President and Chief Executive Officer, CDC IXIS
Asset Management Services, Inc. from September, 1998 to August, 2004).
-----------------------------------------------------------------------------------
J. KEVIN CONNAUGHTON (Age 41) Treasurer of the Columbia Funds since October, 2003 and of the Liberty Funds,
One Financial Center Stein Roe Funds and All-Star Funds since December, 2000; Vice President of the
Boston, MA 02111 Advisor since April, 2003 (formerly President of the Columbia Funds, Liberty Funds
Treasurer (since 2000) and Stein Roe Funds from February, 2004 to October, 2004; Chief Accounting Officer
and Controller of the Liberty Funds and All-Star Funds from February, 1998 to
October, 2000); Treasurer of the Galaxy Funds since September, 2002 (formerly
Treasurer from December, 2002 to December, 2004 and President from February,
2004 to December, 2004 of the Columbia Management Multi-Strategy Hedge Fund, LLC;
Vice President of Colonial Management Associates, Inc. from February, 1998 to
October, 2000).
-----------------------------------------------------------------------------------
MARY JOAN HOENE (Age 54) Senior Vice President and Chief Compliance Officer of the Columbia Funds, Liberty
40 West 57th Street Funds, Stein Roe Funds and All-Star Funds since August, 2004 (formerly Partner,
New York, NY 10005 Carter, Ledyard & Milburn LLP from January, 2001 to August, 2004; Counsel, Carter,
Senior Vice President and Chief Compliance Ledyard & Milburn LLP from November, 1999 to December, 2000; Vice President and
Officer (since 2004) Counsel, Equitable Life Assurance Society of the United States from April, 1998 to
November, 1999).
-----------------------------------------------------------------------------------
MICHAEL G. CLARKE (Age 35) Chief Accounting Officer of the Columbia Funds, Liberty Funds, Stein Roe Funds and
One Financial Center All-Star Funds since October, 2004 (formerly Controller of the Columbia Funds,
Boston, MA 02111 Liberty Funds, Stein Roe Funds and All-Star Funds from May, 2004 to October, 2004;
Chief Accounting Officer (since 2004) Assistant Treasurer from June, 2002 to May, 2004; Vice President, Product Strategy
& Development of the Liberty Funds and Stein Roe Funds from February, 2001 to
June, 2002; Assistant Treasurer of the Liberty Funds, Stein Roe Funds and the All-
Star Funds from August, 1999 to February, 2001; Audit Manager, Deloitte & Touche
LLP from May, 1997 to August, 1999).
-----------------------------------------------------------------------------------
JEFFREY R. COLEMAN (Age 35) Controller of the Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star
One Financial Center Funds since October, 2004 (formerly Vice President of CDC IXIS Asset Management
Boston, MA 02111 Services, Inc. and Deputy Treasurer of the CDC Nvest Funds and Loomis Sayles Funds
Controller (since 2004) from February, 2003 to September, 2004; Assistant Vice President of CDC IXIS Asset
Management Services, Inc. and Assistant Treasurer of the CDC Nvest Funds from
August, 2000 to February, 2003; Tax Manager of PFPC, Inc. from November, 1996 to
August, 2000).
-----------------------------------------------------------------------------------
R. SCOTT HENDERSON (Age 46) Secretary of the Columbia Funds, Liberty Funds and Stein Roe Funds since December,
One Financial Center 2004 (formerly Of Counsel, Bingham McCutchen from April, 2001 to September,
Boston, MA 02111 2004; Executive Director and General Counsel, Massachusetts Pension Reserves
Secretary (since 2004) Investment Management Board from September, 1997 to March, 2001).
-----------------------------------------------------------------------------------
30
COLUMBIA FUNDS
Columbia Growth & Income Fund
------------------------------------
Large Growth Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II*
Columbia Young Investor
------------------------------------
Large Value Columbia Disciplined Value
Columbia Growth & Income*
Columbia Large Cap Core
Columbia Tax-Managed Value*
------------------------------------
Midcap Growth Columbia Acorn Select
Columbia Mid Cap Growth
------------------------------------
Midcap Value Columbia Dividend Income
Columbia Mid Cap Value*
Columbia Strategic Investor
------------------------------------
Small Growth Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
------------------------------------
Small Value Columbia Small Cap Value
------------------------------------
Balanced Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
Columbia Thermostat
------------------------------------
Specialty Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
------------------------------------
Taxable Fixed-Income Columbia Federal Securities
Columbia Fixed Income Securities*
Columbia High Yield
Columbia High Yield Opportunity
Columbia Income*
Columbia Intermediate Bond
Columbia Intermediate
Government Income*
Columbia Quality Plus Bond
Columbia Short Term Bond*
Columbia Strategic Income
------------------------------------
Tax Exempt Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt
Bond
Columbia Managed Municipals*
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
31
Columbia Growth & Income Fund
------------------------------------
Single State Tax Exempt Columbia California Tax-Exempt
Columbia Connecticut Intermediate
Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate
Municipal Bond*
Columbia Massachusetts Intermediate
Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate
Municipal Bond
Columbia New York Intermediate
Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate
Municipal Bond*
Columbia Rhode Island Intermediate
Municipal Bond
------------------------------------
Money Market Columbia Money Market*
Columbia Municipal Money Market*
------------------------------------
International/Global Columbia Acorn International
Columbia Acorn International Select
Columbia Global Equity
Columbia International Stock
Columbia Newport Greater China
Columbia Newport Tiger*
------------------------------------
Index Columbia Large Company Index*
Columbia Small Company Index*
Columbia U.S. Treasury Index
* The fund's trustees have approved
the merger of this fund, which is
scheduled to occur before the end
of 2005.
Please consider the investment
objectives, risks, charges and
expenses of a mutual fund carefully
before investing. Contact us at
800-345-6611 for a prospectus which
contains this and other important
information about the fund. Read it
carefully before you invest.
For complete product information on
any Columbia fund, visit our website
at www.columbiafunds.com.
Columbia Management is the primary
investment management division of
Bank of America Corporation.
Columbia Management entities furnish
investment management services and
advise institutional and mutual fund
portfolios. Columbia Management
Advisors, Inc. (CMA) is a SEC
registered investment advisor and
wholly owned subsidiary of Bank of
America, N.A. CMA is part of
Columbia Management. Columbia
Management Advisors, Inc. will
combine with Banc of America Capital
Management, LLC on or about
September 30, 2005. At that time,
the newly combined advisor will
undergo a name change to Columbia
Management Advisors, LLC and will
continue to operate as a
SEC-registered investment advisor,
wholly owned subsidiary of Bank of
America, N.A. and part of Columbia
Management.
32
IMPORTANT INFORMATION ABOUT THIS REPORT
Columbia Growth & Income Fund
TRANSFER AGENT
Columbia Management Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800-345-6611
DISTRIBUTOR
Columbia Management
Distributors, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, LLC
100 Federal Street
Boston MA 02110
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston MA 02110
The funds mail one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Growth & Income Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the funds use to determine how
to vote proxies and a copy of the funds' voting record are available (i) at
www.columbiamanagement.com; (ii) on the Securities and Exchange Commission's
website at www.sec.gov, and (iii) without charge, upon request, by calling
800-368-0346. Information regarding how the funds voted proxies relating to
portfolio securities during the 12-month period ended June 30, is available from
the SEC's website. Information regarding how the funds voted proxies relating to
portfolio securities is also available from the funds' 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.
Columbia Management is the primary investment management division of Bank of
America Corporation. Columbia Management entities furnish investment management
services and advise institutional and mutual fund portfolios. Columbia
Management Advisors, Inc. (CMA) is a SEC registered investment advisor and
wholly owned subsidiary of Bank of America, N.A. CMA is part of Columbia
Management. Columbia Management Advisors, Inc. will combine with Banc of America
Capital Management, LLC on or about September 30,2005. At that time, the newly
combined advisor will undergo a name change to Columbia Management Advisors, LLC
and will continue to operate as a SEC-registered investment advisor, wholly
owned subsidiary of Bank of America, N.A. and part of Columbia Management.
33
photo: eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Growth & Income Fund Annual Report, July 31, 2005
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
Logo:
Columbia Management(R)
(c) 2005 Columbia Management Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/89449-0805 (09/05) 05/7533
ITEM 2. CODE OF ETHICS.
(a) The registrant has, as of the end of the period covered by this report,
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless
of whether these individuals are employed by the registrant or a third
party.
(b) During the period covered by this report, there were not any amendments to
a provision of the code of ethics adopted in 2(a) above.
(c) During the period covered by this report, there were not any waivers or
implicit waivers to a provision of the code of ethics adopted in 2(a)
above.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Trustees has determined that Douglas A. Hacker, Thomas
E. Stitzel, Anne-Lee Verville and Richard L. Woolworth, each of whom are members
of the registrant's Board of Trustees and Audit Committee, each qualify as an
audit committee financial expert. Mr. Hacker, Mr. Stitzel, Ms. Verville and Mr.
Woolworth are each independent trustees, as defined in paragraph (a)(2) of this
item's instructions and collectively constitute the entire Audit Committee.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fee information below is disclosed for the single series of the registrant whose
report to stockholders is included in this annual filing.
(a) Aggregate Audit Fees billed by the principal accountant for professional
services rendered during the fiscal years ended July 31, 2005 and July 31, 2004
are approximately as follows:
2005 2004
$32,500 $30,000
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed by the principal accountant for
professional services rendered during the fiscal years ended July 31, 2005 and
July 31, 2004 are approximately as follows:
2005 2004
$5,400 $4,000
Audit-Related Fees include amounts for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported in Audit Fees
above. In both fiscal years 2005 and 2004, Audit-Related Fees include certain
agreed-upon procedures performed for semi-annual shareholder reports. In fiscal
year 2005 Audit-Related Fees also include certain agreed-upon procedures related
to the review of the registrant's anti-money laundering program.
(c) Aggregate Tax Fees billed by the principal accountant for professional
services rendered during the fiscal years ended July 31, 2005 and July 31, 2004
are approximately as follows:
2005 2004
$2,500 $2,400
Tax Fees in both fiscal years 2005 and 2004 consist primarily of the review of
annual tax returns and include amounts for professional services by the
principal accountant for tax compliance, tax advice and tax planning.
(d) Aggregate All Other Fees billed by the principal accountant for professional
services rendered during the fiscal years ended July 31, 2005 and July 31, 2004
are approximately as follows:
2005 2004
$0 $0
All Other Fees include amounts for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) above.
None of the amounts described in paragraphs (a) through (d) above were approved
pursuant to the "de minimus" exception under paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
I. GENERAL OVERVIEW
The Audit Committee of the registrant has adopted a formal policy (the "Policy")
which sets forth the procedures and the conditions pursuant to which the Audit
Committee will pre-approve (i) all audit and non-audit (including audit related,
tax and all other) services provided by the registrant's independent auditor to
the registrant and individual funds (collectively "Fund Services"), and (ii) all
non-audit services provided by the registrant's independent auditor to the
funds' adviser or a control affiliate of the adviser, that relate directly to
the funds' operations and financial reporting (collectively "Fund-related
Adviser Services"). A "control affiliate" is an entity controlling, controlled
by, or under common control with the adviser that provides ongoing services to
the funds, and the term "adviser" is deemed to exclude any unaffiliated
sub-adviser whose role is primarily portfolio management and is sub-contracted
or overseen by another investment adviser. The adviser and control affiliates
are collectively referred to as "Adviser Entities."
The Audit Committee uses a combination of specific (on a case-by-case basis as
potential services are contemplated) and general (pre-determined list of
permitted services) pre-approvals. Unless a type of service has received general
pre-approval, it will require specific pre-approval by the Audit Committee if it
is to be provided by the independent auditor.
The Policy does not delegate the Audit Committee's responsibilities to
pre-approve services performed by the independent auditor to management.
II. GENERAL PROCEDURES
On an annual basis, the Fund Treasurer and/or Director of Trustee Administration
shall submit to the Audit Committee a schedule of the types of Fund Services and
Fund-related Adviser Services that are subject to general pre-approval.
These schedules will provide a description of each type of service that is
subject to general pre-approval and, where possible, will provide estimated fees
for each instance of providing each service. This general pre-approval and
related fees (where provided) will generally cover a one-year period (for
example, from June 1 through May 31 of the following year). The Audit Committee
will review and approve the types of services and review the projected fees for
the next one-year period and may add to, or subtract from, the list of general
pre-approved services from time to time, based on subsequent determinations.
This approval acknowledges that the Audit Committee is in agreement with the
specific types of services that the independent auditor will be permitted to
perform. The fee amounts will be updated to the extent necessary at other
regularly scheduled meetings of the Audit Committee.
In addition to the fees for each individual service, the Audit Committee has the
authority to implement a fee cap on the aggregate amount of non-audit services
provided to an individual fund.
If, subsequent to general pre-approval, a fund, its investment adviser or a
control affiliate determines that it would like to engage the independent
auditor to perform a service that
requires pre-approval and that is not included in the general pre-approval list,
the specific pre-approval procedure shall be as follows:
o A brief written request shall be prepared by management detailing the
proposed engagement with explanation as to why the work is proposed to
be performed by the independent auditor;
o The request should be addressed to the Audit Committee with copies to
the Fund Treasurer and/or Director of Trustee Administration;
o The Fund Treasurer and/or Director of Trustee Administration will
arrange for a discussion of the service to be included on the agenda
for the next regularly scheduled Audit Committee meeting, when the
Committee will discuss the proposed engagement and approve or deny the
request.
o If the timing of the project is critical and the project needs to
commence before the next regularly scheduled meeting, the Chairperson
of the Audit Committee may approve or deny the request on behalf of
the Audit Committee, or, in the Chairperson's discretion, determine to
call a special meeting of the Audit Committee for the purpose of
considering the proposal. Should the Chairperson of the Audit
Committee be unavailable, any other member of the Audit Committee may
serve as an alternate for the purpose of approving or denying the
request. Discussion with the Chairperson (or alternate, if necessary)
will be arranged by the Fund Treasurer and/or Director of Trustee
Administration. The independent auditor will not commence any such
project unless and until specific approval has been given.
III. CERTAIN OTHER SERVICES PROVIDED TO ADVISER ENTITIES
The Audit Committee recognizes that there are cases where services proposed to
be provided by the independent auditor to the adviser or control affiliates are
not Fund-related Adviser Services within the meaning of the Policy, but
nonetheless may be relevant to the Audit Committee's ongoing evaluation of the
auditor's independence and objectivity with respect to its audit services to the
funds. As a result, in all cases where an Adviser Entity engages the independent
auditor to provide audit or non-audit services that are not Fund Services or
Fund-related Adviser Services, were not subject to pre-approval by the Audit
Committee, and the projected fees for any such engagement (or the aggregate of
all such engagements during the period covered by the Policy) exceeds a
pre-determined threshold established by the Audit Committee; the independent
auditor, Fund Treasurer and/or Director of Trustee Administration will notify
the Audit Committee not later than its next meeting. Such notification shall
include a general description of the services provided, the entity that is to be
the recipient of such services, the timing of the engagement, the entity's
reasons for selecting the independent auditor, and the projected fees. Such
information will allow the Audit Committee to consider whether non-audit
services provided to the adviser and Adviser Entities, which were not subject to
Audit Committee pre-approval, are compatible with maintaining the auditor's
independence with respect to the Funds.
IV. REPORTING TO THE AUDIT COMMITTEE
The Fund Treasurer or Director of Trustee Administration shall report to the
Audit Committee at each of its regular meetings regarding all Fund Services or
Fund-related Adviser Services initiated since the last such report was rendered,
including:
o A general description of the services, and
o Actual billed and projected fees, and
o The means by which such Fund Services or Fund-related Adviser Services
were pre-approved by the Audit Committee.
In addition, the independent auditor shall report to the Audit Committee
annually, and no more than 90 days prior to the filing of audit reports with the
SEC, all non-audit services provided to entities in the funds' "investment
company complex," as defined by SEC rules, that did not require pre-approval
under the Policy.
V. AMENDMENTS; ANNUAL APPROVAL BY AUDIT COMMITTEE
The Policy may be amended from time to time by the Audit Committee. Prompt
notice of any amendments will be provided to the independent auditor, Fund
Treasurer and Director of Trustee Administration. The Policy shall be reviewed
and approved at least annually by the Audit Committee.
*****
(e)(2) The percentage of services described in paragraphs (b) through (d) of
this Item approved pursuant to the "de minimis" exception under paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X during both fiscal years ended July
31, 2005 and July 31, 2004 was zero.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended July 31, 2005 and July 31,
2004 are disclosed in (b) through (d) of this Item.
During the fiscal years ended July 31, 2005 and July 31, 2004, there were no
Audit-Related Fees or Tax Fees that were approved for services to the investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser)
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X. During the fiscal years ended July
31, 2005 and July 31, 2004, All Other Fees that were approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were approximately $95,500
and $95,000, respectively. For both fiscal years, All Other Fees consist
primarily of internal controls reviews of the registrant's transfer agent.
The percentage of Audit-Related Fees, Tax Fees and All Other Fees required to be
approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were
approved under the "de minimis" exception during both fiscal years ended July
31, 2005 and July 31, 2004 was zero.
(h) The registrant's Audit Committee of the Board of Directors has considered
whether the provision of non-audit services that were rendered to the
registrant's adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of
Regulation S-X, is compatible with maintaining the principal accountant's
independence. The Audit Committee determined that the provision of such services
is compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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 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, has concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust VI
------------------------------------------------------------------
By (Signature and Title) /s/ Christopher L. Wilson
------------------------------------------------------
Christopher L. Wilson, President
Date September 26, 2005
--------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Christopher L. Wilson
------------------------------------------------------
Christopher L. Wilson, President
Date September 26, 2005
--------------------------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------------------------
J. Kevin Connaughton, Treasurer
Date September 26, 2005
--------------------------------------------------------------------------