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 811-4978
Columbia Funds Trust XI
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
--------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
Date of fiscal year end: Septermber 30, 2005
Date of reporting period: September 30, 2005
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.
COLUMBIA GROWTH
STOCK FUND
ANNUAL REPORT
SEPTEMBER 30, 2005
PRESIDENT'S MESSAGE
COLUMBIA GROWTH STOCK FUND
sidebar
TABLE OF CONTENTS
PERFORMANCE INFORMATION ............... 1
FUND PROFILE .......................... 2
UNDERSTANDING YOUR EXPENSES ........... 3
ECONOMIC UPDATE ....................... 4
PORTFOLIO MANAGERS' REPORT ............ 5
INVESTMENT PORTFOLIO .................. 7
STATEMENT OF ASSETS AND LIABILITIES ... 10
STATEMENT OF OPERATIONS ............... 11
STATEMENT OF CHANGES IN NET ASSETS .... 12
NOTES TO FINANCIAL STATEMENTS ......... 13
FINANCIAL HIGHLIGHTS .................. 19
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ............. 23
TRUSTEES .............................. 24
OFFICERS .............................. 26
COLUMBIA FUNDS ........................ 27
IMPORTANT INFORMATION
ABOUT THIS REPORT ..................... 29
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.
Graphic:
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Not FDIC Insured
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May Lose Value
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No Bank Guarantee
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end sidebar
Photo of: Christopher L. Wilson
DEAR SHAREHOLDER:
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 integrated various components of Nations Funds, Galaxy Funds and
Columbia Funds, resulting in a single fund family under the Columbia name 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. In addition to expanding the level of services
available to the funds, portfolio managers and shareholders, we have been able
to achieve significant cost savings for the funds by aggregating our business.
In September, we made major inroads in the initiative to streamline our product
offerings. This included merging several funds and renaming Nations Funds as
Columbia Funds, as well as consolidating the Nations and Columbia web sites.
Over the summer, we completed the service provider consolidation for shareholder
servicing. As we work to complete the remaining product and service provider
consolidations by the end of 2005, we remain committed to building a mutual fund
business that helps you meet, and hopefully exceed, your personal financial
goals. 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 continually earned and will
remain focused on producing results for you. We will continue to strive for the
highest standards of performance and service excellence.
All of these efforts have been undertaken to enable you, as a shareholder, to
benefit from the execution of a consolidated business plan. We believe a more
streamlined fund family with consistent performance and lower fees will provide
the best opportunity for investment growth. We also believe that providing more
robust services to you through multiple channels (Web, phones, voice response)
will be beneficial to 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 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 financial goals on target in the years to come.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
President, Columbia Funds
Head of Mutual Funds, Columbia Management
Christopher L. Wilson is Head of Mutual Funds for Columbia Management and
responsible for the day-to-day delivery of mutual fund services to the firm's
investors. Working closely with the Legal and Compliance teams, Chris oversees
all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. As President and CEO
of Columbia Funds (formerly Nations, Galaxy and Columbia Funds), Chris serves as
the primary interface to the Fund Boards. Chris joined Bank of America in 2004.
PERFORMANCE INFORMATION
COLUMBIA GROWTH STOCK FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
LINE CHART:
CLASS A SHARES CLASS A SHARES RUSSELL 1000
WITHOUT SALES CHARGE WITH SALES CHARGE GROWTH INDEX
OCT-95 10000 9425 10000
9943 9371 10007
10421 9822 10396
10532 9926 10456
10755 10137 10805
10898 10271 11002
11029 10395 11017
11159 10517 11307
11639 10970 11701
11764 11088 11717
11046 10411 11031
11323 10672 11315
12105 11409 12139
12357 11647 12212
13038 12288 13129
12738 12006 12872
13853 13056 13774
13574 12794 13680
12707 11976 12940
13707 12919 13800
14592 13753 14796
15264 14386 15388
16442 15497 16748
15347 14464 15768
16114 15188 16544
15763 14857 15932
16129 15201 16609
16769 15805 16795
16710 15749 17297
17910 16880 18598
18693 17618 19340
18945 17856 19607
18737 17659 19050
19865 18722 20216
19593 18466 20083
16205 15273 17068
16871 15901 18379
18194 17148 19857
19540 18417 21368
21052 19842 23295
22831 21519 24663
22185 20910 23536
23590 22233 24776
23196 21862 24808
22574 21276 24046
24247 22853 25730
23473 22124 24911
23173 21840 25318
22943 21624 24786
24359 22958 26657
25472 24008 28097
28761 27107 31019
28812 27156 29564
31674 29852 31010
33298 31384 33230
31643 29824 31648
29207 27527 30053
31809 29980 32331
30734 28967 30983
33709 31771 33787
30982 29201 30591
28569 26926 29144
24658 23240 24848
25498 24032 24063
26345 24830 25725
23131 21801 21357
21408 20177 19034
23452 22104 21441
22821 21509 21126
21901 20642 20636
20833 19635 20120
19214 18109 18474
17510 16503 16631
18035 16998 17504
19505 18383 19186
19394 18279 19149
18814 17732 18810
17894 16865 18030
18703 17627 18654
17640 16626 17131
17307 16312 16717
15917 15002 15171
14531 13695 14336
14471 13639 14379
13039 12289 12888
13718 12929 14070
14515 13680 14834
13599 12817 13809
13362 12594 13473
12994 12246 13411
13274 12511 13661
14294 13472 14670
14973 14112 15402
15031 14167 15615
15533 14640 16004
15814 14905 16402
15297 14417 16227
16109 15183 17139
16464 15517 17319
16951 15976 17918
16995 16018 18283
16803 15837 18400
16390 15447 18058
16095 15169 17849
16523 15573 18181
16508 15559 18408
15564 14669 17368
15268 14390 17283
15239 14363 17447
15638 14739 17719
15993 15074 18329
16465 15518 19047
16022 15101 18413
16274 15338 18608
15802 14893 18269
15359 14476 17922
16009 15088 18790
15684 14782 18720
16526 15576 19636
16335 15395 19382
SEP-05 16103 15177 19473
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Growth Stock 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 Growth Index is
an unmanaged index that measures the performance of those Russell 1000 Index
companies with higher price-to-book ratios and higher forecasted growth values.
Unlike the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. Securities in the fund may not match those in an index.
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.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE WITHOUT WITH
CLASS A 16,103 15,177
CLASS B 15,723 15,723
CLASS C 15,739 15,739
CLASS Z 16,454 N/A
end sidebar
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C Z
INCEPTION 07/15/02 07/15/02 07/15/02 07/01/58
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
1-YEAR 5.72 -0.37 4.89 -0.11 4.89 3.89 6.35
5-YEAR -12.26 -13.29 -12.68 -12.97 -12.66 -12.66 -11.88
10-YEAR 4.88 4.26 4.63 4.63 4.64 4.64 5.11
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER.
PERFORMANCE RESULTS REFLECT ANY VOLUNTARY WAIVERS OR REIMBURSEMENTS 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. PERFORMANCE FOR DIFFERENT SHARE CLASSES
WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH
CLASS.
The performance information for class A, B, and C shares (newer class shares)
includes returns for the fund's class Z shares (the oldest existing fund class)
for periods prior to the inception date of the newer class shares. The newer
class shares returns are not restated to reflect any expense differential (e.g.
Rule 12b-1 fees and transfer agent fees) between class Z shares and the newer
class shares. Had the expense differential been reflected, the returns for the
periods prior to the inception of the newer class shares would have been
different. Class A, B, and C shares were initially offered July 15, 2002 and
Class Z shares were initially offered July 1, 1958.
1
FUND PROFILE
COLUMBIA GROWTH STOCK 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.
SECTORS AS OF 09/30/05 (%)
INFORMATION TECHNOLOGY 39.1
HEALTH CARE 18.7
CONSUMER STAPLES 14.5
CONSUMER DISCRETIONARY 12.4
FINANCIALS 7.9
INDUSTRIALS 4.8
ENERGY 2.5
TOP 10 HOLDINGS AS OF 09/30/05 (%)
MICROSOFT 4.9
GENERAL ELECTRIC 4.8
MEDTRONIC 4.6
JOHNSON & JOHNSON 4.4
NOVARTIS 4.3
COSTCO WHOLESALE 4.2
AMGEN 3.9
COLGATE-PALMOLIVE 3.5
PROCTER & GAMBLE 3.4
CISCO SYSTEMS 3.4
sidebar
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2005, THE FUND'S CLASS A SHARES
RETURNED 5.72% WITHOUT SALES CHARGE.
o THE FUND'S PERFORMANCE FELL SHORT OF THE RUSSELL 1000 GROWTH INDEX, AS WELL
AS THE MORNINGSTAR LARGE GROWTH CATEGORY AVERAGE.
o STOCK SELECTION IN THE TECHNOLOGY AND ENERGY SECTORS CONTRIBUTED TO THE
FUND'S SHORTFALL. THE FUND ALSO HAD LESS EXPOSURE THAN THE INDEX TO THE
TOP-PERFORMING ENERGY SECTOR.
CLASS A SHARES RUSSELL 1000 GROWTH INDEX
5.72% 11.60%
artwork: 2 arrows up
OBJECTIVE
Seeks long-term
growth of capital
TOTAL NET ASSETS
$515.2 million
MANAGEMENT STYLE
artwork: Equity Style: Growth
Size: Large
end sidebar
Portfolio holdings are calculated as a percentage of net assets. Sector
breakdown is calculated as a percentage of total investments excluding
short-term investments. 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.
2
UNDERSTANDING YOUR EXPENSES
COLUMBIA GROWTH STOCK FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
CLASS A 1,000.00 1,000.00 1,019.60 1,017.08 8.06 8.05 1.59
CLASS B 1,000.00 1,000.00 1,014.79 1,013.37 11.78 11.77 2.33
CLASS C 1,000.00 1,000.00 1,015.79 1,013.72 11.43 11.42 2.26
CLASS Z 1,000.00 1,000.00 1,021.91 1,020.40 4.72 4.71 0.93
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.)
Had the Investment Advisor/Transfer Agent not waived or reimbursed a portion of
class A, B, C and Z shares' expenses, total return would have been reduced.
Had the distributor not waived a portion of class A shares' distribution fee,
total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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.
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.
end sidebar
3
ECONOMIC UPDATE
COLUMBIA GROWTH STOCK FUND
The US economy moved ahead at a healthy pace during the 12-month period that
began October 1, 2004 and ended September 30, 2005. Gross domestic product (GDP)
expanded at an annualized rate of 3.8% as job growth helped sustain consumer
spending and rising profits boosted business spending. Employment data was
solid, even in light of Hurricanes Katrina and Rita, which disrupted the labor
market near the end of the period. During the first 11 months of the period, the
economy added an average of 185,000 new jobs each month. In September, 8,000
jobs were lost as a direct result of the Gulf Coast floods, and the unemployment
rate rose from 4.9% to 5.1%. However, the number of jobs lost was lower than
originally estimated - and considerably lower than expected.
Energy prices weighed on economic growth as the period wore on. The first signs
of relief came in September as the price of crude oil retreated from a record
high of $69.81 a barrel. Signs of slower growth cropped up in retail spending.
And, consumer confidence readings dipped in July and fell sharply in September.
The decline was the largest in 25 years, according to the University of
Michigan's monthly survey.
Despite these setbacks, the latest data on the economy suggest that it has
retained momentum. Manufacturing activity remained strong, and business activity
in non-manufacturing industries continued to expand, although the pace slowed in
September.
DESPITE VOLATILITY, STOCKS MOVED AHEAD
The S&P 500 Index--a broad measure of large company stock market
performance--returned 12.25% for this reporting period. The double-digit gain
masked considerable volatility. Early in the period, stocks rallied after the
presidential election then again in response to positive economic news midway
through the period and in the aftermath of the two hurricanes. These rallies,
however, alternated with declines linked to higher energy prices, rising
interest rates and weakening consumer confidence. Small- and mid-cap stocks
outperformed large-cap stocks. Value stocks led growth stocks except among small
caps, where growth gained a small advantage over value.
BONDS DELIVERED MODEST GAINS
The US bond market delivered positive but modest returns despite steadily rising
short-term interest rates and higher long-term rates in the final months of the
period. Interest rates and bond prices move in opposite directions. The Lehman
Brothers Aggregate Bond Index, a broad measure of the performance of
investment-grade bonds returned 2.80% for the 12-month period. The yield on the
10-year US Treasury note, a bellwether for the bond market, ended the period at
just over 4.3%--slightly higher than where it started the period. High-yield
bonds led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 6.69%.
SHORT-TERM INTEREST RATES MOVED HIGHER
The Federal Reserve Board (the Fed) raised the federal funds rate, a key
short-term rate, from 1.75% to 3.75% during the period. In the wake of
Hurricanes Katrina and Rita, some market observers speculated that the Fed might
curtail its rate hikes. However, Fed Chairman Greenspan indicated that inflation
was a greater concern than the sustainability of economic growth and we believe
that the Fed is likely to continue to raise short-term interest rates into the
first half of 2006.
sidebar
SUMMARY
FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2005
o DESPITE BOUTS OF VOLATILITY, THE BROAD STOCK MARKET GENERATED A
DOUBLE-DIGIT RETURN FOR THE PERIOD. THE S&P 500 INDEX RETURNED 12.25%. AS
THE ECONOMY EXPANDED, SMALL-CAP STOCKS OUTPERFORMED LARGE-CAP STOCKS, AS
MEASURED BY THE RUSSELL 2000 INDEX.
S&P 500 INDEX RUSSELL 2000 INDEX
12.25% 17.95%
artwork: 2 arrows up
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.
LEHMAN INDEX MERRILL LYNCH INDEX
2.80% 6.69%
artwork: 2 arrows up
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
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
4
PORTFOLIO MANAGERS' REPORT
COLUMBIA GROWTH STOCK FUND
For the 12-month period ended September 30, 2005, Columbia Growth Stock Fund
class A shares returned 5.72% without sales charge. Performance came out behind
the Russell 1000 Growth Index, which returned 11.60%, as well as the Morningstar
Large Growth Category average, which was 13.39%.1 Stock selection in the
technology sector and a below-average exposure to soaring energy returns hurt
relative performance. A bias toward out-of-favor mega-cap stocks also dampened
gains. Despite these disappointments, the fund remained concentrated on high
quality companies that we believe have the potential to deliver superior stock
performance over the long term.
DISAPPOINTING TECHNOLOGY STOCK SELECTION
A concentration in technology stocks hurt the fund's performance. Technology is
a sector that traditionally has generated a continuous stream of new products
that have the potential to drive companies to above average long-term growth.
However, that trend was not apparent during the past year. Within technology,
the fund had a large stake in semiconductor ("chip") and semiconductor capital
equipment companies. We expected the industry to benefit from growing demand,
the development of more powerful chips and the need for upgraded manufacturing
equipment. However, some of these stocks declined amid weaker-than-anticipated
demand from end markets. Detractors included equipment company Novellus Systems
and manufacturer Altera. Microsoft also came under pressure as investors favored
smaller, more nimble companies.
Yet, some technology stocks produced strong gains, including Marvell Technology
Group and ASML Holding. Marvell Technology Group benefited from expanded demand
from new applications, such as iPods and the latest high-speed data networks,
for which it manufacturers chips. ASML Holding is the leading manufacturer of
lithography machines used in making semiconductors. It rallied as chip
manufacturers upgraded obsolete equipment and looked ahead to the next
generation of machines.
MISSED OPPORTUNITIES IN ENERGY AND CONSUMER SECTORS
Energy stocks soared as commodity prices rose and hurricanes in the Gulf of
Mexico threatened refining capacity. However, the fund had less exposure to
energy than the index and no exposure to smaller exploration and production
companies, which led the sector's performance. The fund's only energy holding
was Schlumberger, a leading provider of global oilfield services, which
benefited from improved end demand and robust pricing for its services.
Schlumberger made a solid contribution to the fund's return.
The fund had more exposure to the consumer staples sector, which was a weak
performer for the period. The biggest disappointment was Wal-Mart Stores, which
was hurt by rising energy prices that cut into consumer buying. Within the
consumer discretionary sector, the fund's industry allocations worked against
it. We emphasized media stocks, which suffered from growing competition and
stalled advertising revenues. Sizable stakes in both Viacom and Comcast
detracted from returns. In addition, stock selection was weak
1 (C)2005, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be
copied or redistributed for any purpose and may only be used for
noncommercial, personal purposes. The information contained herein is not
represented or warranted to be accurate, correct, complete or timely.
Morningstar, Inc. shall not be responsible for investment decisions,
damages or other losses resulting from the use of this information. Past
performance is no guarantee of future performance. Morningstar, Inc. has
not granted consent for it to be considered or deemed an "expert" under the
Securities Act of 1933.
Morningstar Categories compare the performance of funds with similar
investment objectives and strategies.
sidebar
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 09/30/05 ($)
CLASS A 10.91
CLASS B 10.30
CLASS C 10.30
CLASS Z 8.88
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
NOVELLUS SYSTEMS 2.1
ALTERA 3.2
MICROSOFT 4.9
MARVELL TECHNOLOGY GROUP 2.3
ASML HOLDING 3.2
SCHLUMBERGER 2.5
WAL-MART STORES 3.4
VIACOM 2.8
COMCAST 3.0
HOME DEPOT 1.8
AMGEN 3.9
CARDINAL HEALTH 1.4
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
end sidebar
5
COLUMBIA GROWTH STOCK FUND
among retailers. Home Depot, in particular, suffered from concerns over a
potential housing slowdown.
POSITIVE CONTRIBUTION FROM HEALTH CARE
In health care, we identified several stocks that delivered solid gains. For
example, we targeted Amgen, a biotechnology company that benefited from its new
product line-up as well as a favorable resolution to reimbursement issues
surrounding its blood products. Our investment in Cardinal Health was rewarded
as the drug distribution company rebounded after addressing accounting
irregularities that had surfaced in 2004. On the downside, concerns over patent
expirations and a weak new product pipeline pressured Pfizer, which we sold.
FAVORABLE OUTLOOK FOR LARGE-CAP GROWTH STOCKS
We remain optimistic about the prospects for large-cap growth stocks. After
years of trailing both smaller and value-oriented peers, large-cap growth stocks
appear inexpensive by historical standards. They also seem poised to benefit if
earnings growth becomes harder to find, which is often the case in the latter
stages of an economic cycle. Going forward, we plan to maintain a large-cap
growth focus and a concentrated structure, targeting stocks that we believe
offer the best potential for long-term growth and capital appreciation. As we
re-evaluate stocks that have lagged recently, we may broaden the fund's
diversification across industries and sectors.
Paul J. Berlinguet has co-managed Columbia Growth Stock Fund
since September 2005 and has been with the advisor or its
predecessors since 2003.
/s/ Paul J. Berlinguet
John T. Wilson has co-managed the fund since September 2005
and has been with the advisor since July 2005.
/s/ John T. Wilson
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investing in growth stocks incurs the possibility of losses because their prices
are sensitive to changes in current or expected earnings.
sidebar
Going forward, we plan to maintain a large-cap growth focus and a concentrated
structure, targeting stocks that we believe offer the best potential for
long-term growth and capital appreciation.
end sidebar
6
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
COMMON STOCKS - 99.6%
CONSUMER DISCRETIONARY - 12.4%
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
MEDIA - 10.6% Comcast Corp., Class A (a) 525,100 15,427,438
Liberty Global, Inc., Class A (a) 51,910 1,405,723
Liberty Global, Inc., Class C (a) 51,910 1,336,682
News Corp., Class B 496,700 8,195,550
Time Warner, Inc. 758,900 13,743,679
Viacom, Inc., Class B 442,900 14,620,129
Media Total 54,729,201
-----------------------------------------------------------------------------
SPECIALTY RETAIL - 1.8% Home Depot, Inc. 236,700 9,027,738
Specialty Retail Total 9,027,738
------------
CONSUMER DISCRETIONARY TOTAL 63,756,939
CONSUMER STAPLES - 14.5%
- ------------------------------------------ -----------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 7.6% Costco Wholesale Corp. 500,100 21,549,309
Wal-Mart Stores, Inc. 397,000 17,396,540
Food & Staples Retailing Total 38,945,849
-----------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 6.9% Colgate-Palmolive Co. 338,500 17,869,415
Procter & Gamble Co. 297,200 17,671,512
Household Products Total 35,540,927
------------
CONSUMER STAPLES TOTAL 74,486,776
ENERGY - 2.5%
- ------------------------------------------ -----------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 2.5% Schlumberger Ltd. 155,000 13,078,900
Energy Equipment & Services Total 13,078,900
------------
ENERGY TOTAL 13,078,900
FINANCIALS - 7.9%
- ------------------------------------------ -----------------------------------------------------------------------------
CAPITAL MARKETS - 1.8% Merrill Lynch & Co., Inc. 149,600 9,177,960
Capital Markets Total 9,177,960
-----------------------------------------------------------------------------
COMMERCIAL BANKS - 3.2% Wells Fargo & Co. 279,300 16,358,601
Commercial Banks Total 16,358,601
-----------------------------------------------------------------------------
INSURANCE - 2.9% American International Group, Inc. 244,000 15,118,240
Insurance Total 15,118,240
------------
FINANCIALS TOTAL 40,654,801
HEALTH CARE - 18.6%
- ------------------------------------------ -----------------------------------------------------------------------------
BIOTECHNOLOGY - 3.9% Amgen, Inc. (a) 250,100 19,925,467
Biotechnology Total 19,925,467
-----------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 4.6% Medtronic, Inc. 443,700 23,791,194
Health Care Equipment & Supplies Total 23,791,194
-----------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 1.4% Cardinal Health, Inc. 115,700 7,340,008
Health Care Providers & Services Total 7,340,008
-----------------------------------------------------------------------------
PHARMACEUTICALS - 8.7% Johnson & Johnson 355,700 22,508,696
Novartis AG, ADR 436,700 22,271,700
Pharmaceuticals Total 44,780,396
------------
HEALTH CARE TOTAL 95,837,065
See Accompanying Notes to Financial Statements.
7
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - 4.8%
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 4.8% General Electric Co. 739,300 24,892,231
Industrial Conglomerates Total 24,892,231
------------
INDUSTRIALS TOTAL 24,892,231
INFORMATION TECHNOLOGY - 38.9%
- ------------------------------------------ -----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 3.4% Cisco Systems, Inc. (a) 980,600 17,582,158
Communications Equipment Total 17,582,158
-----------------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 3.2% Dell, Inc. (a) 484,300 16,563,060
Computers & Peripherals Total 16,563,060
-----------------------------------------------------------------------------
IT SERVICES - 2.2% Paychex, Inc. 306,100 11,350,188
IT Services Total 11,350,188
-----------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 23.1% Altera Corp. (a) 868,400 16,595,124
Applied Materials, Inc. 750,400 12,726,784
ASML Holding N.V., N.Y. Registered Shares (a) 1,011,200 16,694,912
Linear Technology Corp. 253,400 9,525,306
Marvell Technology Group Ltd. (a) 259,000 11,942,490
Maxim Integrated Products, Inc. 385,100 16,424,515
Microchip Technology, Inc. 296,000 8,915,520
Novellus Systems, Inc. (a) 431,700 10,827,036
Xilinx, Inc. 558,300 15,548,655
Semiconductors & Semiconductor Equipment Total 119,200,342
-----------------------------------------------------------------------------
SOFTWARE - 7.0% Microsoft Corp. 990,600 25,488,138
SAP AG, ADR 240,900 10,438,197
Software Total 35,926,335
------------
INFORMATION TECHNOLOGY TOTAL 200,622,083
TOTAL COMMON STOCKS
(COST OF $432,209,310) 513,328,795
SHORT-TERM OBLIGATION - 0.6% PAR ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank & Trust Co.,
dated 09/30/05, due 10/03/05 at 3.150%, collateralized by
a U.S. Treasury Bond maturing 05/15/17, market value of
$3,140,963 (repurchase proceeds $3,073,807) 3,073,000 3,073,000
TOTAL SHORT-TERM OBLIGATION
(COST OF $3,073,000) 3,073,000
TOTAL INVESTMENTS - 100.2%
(COST OF $435,282,310)(B) 516,401,795
OTHER ASSETS & LIABILITIES, NET - (0.2)% (1,180,975)
NET ASSETS - 100.0% 515,220,820
See Accompanying Notes to Financial Statements.
8
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $438,476,491.
At September 30, 2005, the Fund held investments in the following sectors:
SECTOR (UNAUDITED) % OF NET ASSETS
---------------------------------------------------------------------
Information Technology 38.9%
Health Care (18.6)
Consumer Staples (14.5)
Consumer Discretionary (12.4)
Financials (7.9)
Industrials (4.8)
Energy (2.5)
Short-Term Obligation (0.6)
Other Assets & Liabilities, Net (0.2)
------
100.0%
======
ACRONYM NAME
ADR American Depositary Receipt
See Accompanying Notes to Financial Statements.
9
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
ASSETS Investments, at cost 435,282,310
-----------------------------------------------------------------------------
Investments , at value 516,401,795
Cash 665
Receivable for:
Fund shares sold 145,296
Interest 269
Dividends 286,942
Foreign tax reclaims 5,688
Deferred Trustees' compensation plan 31,396
------------
Total Assets 516,872,051
-----------------------------------------------------------------------------
LIABILITIES Payable for:
Fund shares repurchased 820,175
Investment advisory fee 278,160
Administration fee 60,836
Transfer agent fee 171,797
Pricing and bookkeeping fees 11,849
Trustees' fees 994
Custody fee 2,743
Distribution and service fees 170,428
Chief compliance officer expenses and fees 1,562
Deferred Trustees' fees 31,396
Other liabilities 101,291
------------
Total Liabilities 1,651,231
NET ASSETS 515,220,820
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 874,832,435
Undistributed net investment income 663,738
Accumulated net realized loss (441,394,838)
Net unrealized appreciation on investments 81,119,485
------------
NET ASSETS 515,220,820
-----------------------------------------------------------------------------
CLASS A Net assets 51,510,461
Shares outstanding 4,722,426
Net asset value per share 10.91(a)
Maximum offering price per share ($10.91/0.9425) 11.58(b)
-----------------------------------------------------------------------------
CLASS B Net assets 181,760,193
Shares outstanding 17,647,323
Net asset value and offering price per share 10.30(a)
-----------------------------------------------------------------------------
CLASS C Net assets 14,726,226
Shares outstanding 1,429,509
Net asset value and offering price per share 10.30(a)
-----------------------------------------------------------------------------
CLASS Z Net assets 267,223,940
Shares outstanding 30,087,875
Net asset value, offering and redemption price per share 8.88
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
10
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
INVESTMENT INCOME Dividends 10,373,524
Interest 72,043
------------
Total Investment Income (net of foreign taxes
withheld of $84,145) 10,445,567
-----------------------------------------------------------------------------
EXPENSES Investment advisory fee 3,756,924
Administration fee 922,028
Distribution fee:
Class A 58,530
Class B 1,630,437
Class C 131,560
Service fee:
Class A 146,327
Class B 543,479
Class C 43,854
Transfer agent fee:
Class A 318,758
Class B 1,277,365
Class C 92,706
Class Z 532,617
Pricing and bookkeeping fees 165,072
Trustees' fees 22,969
Custody fee 34,604
Chief compliance officer expenses and fees (See Note 4) 6,001
Non-recurring costs (See Note 8) 11,722
Other expenses 280,305
------------
Total Operating Expenses 9,975,258
------------
Interest expense 27,424
------------
Total Expenses 10,002,682
Fees and expenses waived or
reimbursed by Investment
Advisor/Transfer Agent:
Class A (9,132)
Class B (37,693)
Class C (2,994)
Class Z (148,548)
Fees waived by Distributor - Class A (29,265)
Non-recurring costs assumed by Investment Advisor (See Note 8) (11,722)
Custody earnings credit (164)
------------
Net Expenses 9,763,164
------------
Net Investment Income 682,403
-----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED Net realized gain on:
GAIN (LOSS) ON INVESTMENTS Investments 46,939,381
Net realized loss on disposal of investments
purchased/sold in error (See Note 6) --
------------
Net realized gain 46,939,381
Net change in unrealized appreciation (depreciation)
on investments (7,348,375)
------------
Net Gain 39,591,006
------------
Net Increase in Net Assets from Operations 40,273,409
See Accompanying Notes to Financial Statements.
11
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA GROWTH STOCK FUND
YEAR ENDED SEPTEMBER 30,
--------------------------
INCREASE (DECREASE) IN NET ASSETS: 2005 ($) 2004 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
OPERATIONS Net investment income (loss) 682,403 (5,217,593)
Net realized gain on investments 46,939,381 62,741,007
Net change in unrealized appreciation
(depreciation) on investments (7,348,375) (53,726,795)
------------ ------------
Net Increase from Operations 40,273,409 3,796,619
-----------------------------------------------------------------------------
SHARE TRANSACTIONS Class A:
Subscriptions 9,122,966 14,653,162
Redemptions (27,382,653) (31,034,051)
------------ ------------
Net Decrease (18,259,687) (16,380,889)
Class B:
Subscriptions 7,074,864 15,919,825
Redemptions (82,345,308) (74,892,692)
------------ ------------
Net Decrease (75,270,444) (58,972,867)
Class C:
Subscriptions 1,671,357 2,549,820
Redemptions (8,012,556) (10,634,792)
------------ ------------
Net Decrease (6,341,199) (8,084,972)
Class Z:
Subscriptions 50,526,851 70,908,194
Redemptions (166,978,056) (98,706,026)
------------ ------------
Net Decrease (116,451,205) (27,797,832)
Net Decrease from Share Transactions (216,322,535) (111,236,560)
------------ ------------
Total Decrease in Net Assets (176,049,126) (107,439,941)
-----------------------------------------------------------------------------
NET ASSETS Beginning of period 691,269,946 798,709,887
End of period (including undistributed
net investment income (loss) of $663,738
and $(18,665), respectively) 515,220,820 691,269,946
- ------------------------------------------ -----------------------------------------------------------------------------
CHANGES IN SHARES Class A:
Subscriptions 840,077 1,324,748
Redemptions (2,525,290) (2,828,087)
------------ ------------
Net Decrease (1,685,213) (1,503,339)
Class B:
Subscriptions 689,214 1,497,689
Redemptions (8,005,460) (7,140,520)
------------ ------------
Net Decrease (7,316,246) (5,642,831)
Class C:
Subscriptions 163,100 240,936
Redemptions (781,384) (1,008,828)
------------ ------------
Net Decrease (618,284) (767,892)
Class Z:
Subscriptions 5,795,759 7,969,960
Redemptions (18,830,170) (11,099,886)
------------ ------------
Net Decrease (13,034,411) (3,129,926)
See Accompanying Notes to Financial Statements.
12
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
NOTE 1. ORGANIZATION
Columbia Growth Stock Fund (the "Fund"), a series of Columbia Funds Trust XI
(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 GOALS
The Fund seeks long-term growth of capital.
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 twelve months on an original purchase of $1 million to $50
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 that 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 "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.
13
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Corporate actions and dividend
income are recorded on the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Fund becomes aware of such, net of
non-reclaimable tax withholdings. Awards from class action litigation are
recorded as a reduction of cost if the Fund still owns the applicable securities
on the payment date. If the Fund no longer owns the applicable securities, the
proceeds are recorded as realized gains.
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.
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets would not be affected by these
reclassifications.
For the year ended September 30, 2005, the Fund had no permanent book and tax
basis differences.
As of September 30, 2005, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED NET UNREALIZED
ORDINARY LONG-TERM APPRECIATION*
INCOME CAPITAL GAINS
- --------------------------------------------------------------------------------
$ 693,748 $ -- $ 77,925,304
* The differences between book-basis and tax-basis net unrealized
appreciation are primarily due to deferral of losses from wash sales,
non-deductible deferred trustees fees and capital loss carryovers.
Unrealized appreciation and depreciation at September 30, 2005, based on cost of
investments for federal income tax purposes was:
UNREALIZED APPRECIATION $ 108,361,848
UNREALIZED DEPRECIATION (30,436,544)
- --------------------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 77,925,304
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
- --------------------------------------------------------------------------------
2009 $178,734,023
2011 253,937,044
2012 5,529,590
- --------------------------------------------------------------------------------
$438,200,657
Of these capital loss carryforwards, $178,734,023 ($178,117,533 expiring
09/30/09 and $616,490 expiring 09/30/09) were obtained upon the Fund's mergers
with Liberty Growth Stock Fund and Stein Roe Focus Fund, respectively.
Utilization of Liberty Growth Stock Fund's and Stein Roe Focus Fund's losses
could be subject to limitations imposed by the Internal Revenue Code.
Capital loss carryforwards of $45,841,436 were utilized during the year ended
September 30, 2005. Any capital loss carryforwards acquired as part of a merger
that are permanently lost due to provisions of the Internal Revenue Code are
included as being expired. Expired capital loss carryforwards are recorded as a
reduction of paid-in capital.
14
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, LLC ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund. On September 30, 2005, Columbia Management Advisors, Inc. changed its
name 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 0.60%
- --------------------------------------------------------------------------------
$500 MILLION TO $1 BILLION 0.55%
- --------------------------------------------------------------------------------
$1 BILLION TO $2 BILLION 0.50%
- --------------------------------------------------------------------------------
OVER $2 BILLION 0.45%
For the year ended September 30, 2005, the Fund's effective investment advisory
fee rate was 0.59%.
ADMINISTRATION FEE
Columbia provides administrative and other services to the Fund for a monthly
administration 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 0.150%
- --------------------------------------------------------------------------------
$500 MILLION TO $1 BILLION 0.125%
- --------------------------------------------------------------------------------
$1 BILLION TO $1.5 BILLION 0.100%
- --------------------------------------------------------------------------------
$1.5 BILLION TO $2 BILLION 0.075%
- --------------------------------------------------------------------------------
OVER $2 BILLION 0.050%
For the year ended September 30, 2005, the Fund's effective administration fee
rate was 0.14%.
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
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual 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 September 30, 2005, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.026%.
TRANSFER AGENT FEE
Columbia Management Services, Inc. (the "Transfer Agent"), an affiliate of
Columbia and a wholly-owned subsidiary of BOA, provides shareholder services to
the Fund. The Transfer Agent has contracted with Boston Financial Data Services
("BFDS") to serve as sub-transfer agent. On August 22, 2005, Columbia Funds
Services, Inc. was renamed Columbia Management Services, Inc. For its services,
the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00
per open account per class. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
The Transfer Agent has voluntarily agreed to waive a portion of the Class Z
transfer agent fee so that such fee (exclusive of out-of-pocket expenses) will
not exceed 0.05% annually of the Class Z average daily net assets. The Transfer
Agent, at its discretion, may revise or discontinue this arrangement any time.
For the period from September 1, 2005 through October 31, 2005, the Transfer
Agent has voluntarily agreed to waive a portion of its fees to reflect reduced
contractual fees that will be charged to the Fund effective November 1, 2005.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of
Columbia, is the principal underwriter of the Fund. On August 22, 2005, Columbia
Funds Distributor, Inc. changed its name to Columbia Management Distributors,
Inc. For the year ended September 30, 2005, the Distributor has retained net
underwriting discounts of $11,792 on sales of the Fund's Class A shares and net
CDSC fees of $901, $739,591 and $2,736 on Class A, Class B and Class C share
redemptions, respectively.
15
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
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 attributable to Class A, Class B and Class C shares of
the Fund. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rates of 0.10%, 0.75% and 0.75% of the average
daily net assets attributable to Class A, Class B and Class C shares of the
Fund, respectively. The Distributor has voluntarily agreed to waive a portion of
the Class A share distribution fee so that it will not exceed 0.05% annually of
Class A average daily net assets.
The CDSC and the distribution fees received from the Plan are used principally
as repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. 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 September 30, 2005, the Fund paid $2,195 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 September 30, 2005, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $15,377,668 and
$227,853,227, respectively.
NOTE 6. OTHER
During the year ended September 30, 2005, the Fund sold shares of various
securities due to trading errors. The positions were subsequently repurchased at
a loss of $19,656 and the fund has been reimbursed by Columbia.
NOTE 7. 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 September 30, 2005, the average daily loan
balance outstanding on days where borrowings existed was $28,888,889 at a
weighted average interest rate of 3.89%.
NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to collectively
as the "Settlements". The Settlements contain substantially
16
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK FUND
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 Funds' 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 Funds 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 alleged 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 Funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs alleged 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. Plaintiffs
filed a notice of voluntary dismissal of the lawsuit as to all defendants and
all claims, without prejudice, which was so-ordered by the judge on or about
November 9, 2005.
17
SEPTEMBER 30, 2005
COLUMBIA GROWTH STOCK 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 Funds and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings (with
the exception of the January 11, 2005 "failure to participate" litigation, which
has been dismissed) are ongoing, however, based on currently available
information, Columbia believes that these lawsuits are without merit, that the
likelihood they will have a material adverse impact on any fund is remote, and
that the lawsuits are not likely to materially affect its ability to provide
investment management services to its clients, including the Funds.
For the year ended September 30, 2005, Columbia has assumed $11,722 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
18
FINANCIAL HIGHLIGHTS
COLUMBIA GROWTH STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD ENDED
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
-----------------------------------------
CLASS A SHARES 2005 2004 2003 2002 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.32 $ 10.36 $ 8.83 $ 9.98
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) --(c)(d) (0.08) (0.05) (0.01)
Net realized and unrealized gain (loss) on investments 0.59 0.04 1.58 (1.14)
--------- -------- -------- --------
Total from Investment Operations 0.59 (0.04) 1.53 (1.15)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.91 $ 10.32 $ 10.36 $ 8.83
Total return (e)(f) 5.72% (0.39)% 17.33% (11.52)%(g)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (h) 1.64% 1.55% 1.54% 1.63%(i)
Interest expense --%(j) -- --%(j) --
Net expenses (h) 1.64% 1.55% 1.54% 1.63%(i)
Net investment loss (h) (0.01)% (0.68)% (0.53)% (0.41)%(i)
Waiver/reimbursement 0.07% 0.05% 0.05% 0.05%(i)
Portfolio turnover rate 2% 51% 108% 71%
Net assets, end of period (000's) $ 51,510 $ 66,142 $ 81,967 $ 81,442
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.06 per share.
(d) Rounds to less than $0.01 per share.
(e) Total return at net asset value assuming no initial sales charge or
contingent deferred sales charge.
(f) Had the Distributor/Investment Advisor/Transfer Agent not waived 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.
(j) Rounds to less than 0.01%.
19
COLUMBIA GROWTH STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD ENDED
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
------------------------------------
CLASS B SHARES 2005 2004 2003 2002 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.82 $ 9.93 $ 8.52 $ 9.65
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.08)(c) (0.15) (0.11) (0.02)
Net realized and unrealized gain (loss) on investments 0.56 0.04 1.52 (1.11)
-------- -------- -------- --------
Total from Investment Operations 0.48 (0.11) 1.41 (1.13)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.30 $ 9.82 $ 9.93 $ 8.52
Total return (d) 4.89%(e) (1.11)% 16.55% (11.71)%(f)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (g) 2.39% 2.30% 2.24% 2.33%(h)
Interest expense --%(i) -- --%(i) --
Net expenses (g) 2.39% 2.30% 2.24% 2.33%(h)
Net investment loss (g) (0.75)% (1.43)% (1.23)% (1.11)%(h)
Waiver/reimbursement 0.02% -- -- --
Portfolio turnover rate 2% 51% 108% 71%
Net assets, end of period (000's) $181,760 $245,137 $303,943 $306,561
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.06 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Had the Investment Advisor/Transfer Agent not waived a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
20
COLUMBIA GROWTH STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD ENDED
YEAR ENDED SEPTEMBER 30, SEPTEMBER 30,
------------------------------------
CLASS C SHARES 2005 2004 2003 2002 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.82 $ 9.92 $ 8.52 $ 9.64
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.07)(c) (0.15) (0.11) (0.02)
Net realized and unrealized gain (loss) on investments 0.55 0.05 1.51 (1.10)
-------- -------- -------- --------
Total from Investment Operations 0.48 (0.10) 1.40 (1.12)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.30 $ 9.82 $ 9.92 $ 8.52
Total return (d) 4.89%(e) (1.01)% 16.43% (11.62)%(f)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (g) 2.33% 2.25% 2.24% 2.33%(h)
Interest expense --%(i) -- --%(i) --
Net expenses (g) 2.33% 2.25% 2.24% 2.33%(h)
Net investment loss (g) (0.69)% (1.39)% (1.23)% (1.11)%(h)
Waiver/reimbursement 0.02% -- -- --
Portfolio turnover rate 2% 51% 108% 71%
Net assets, end of period (000's) $ 14,726 $20,100 $27,938 $28,093
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on July 15, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.06 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Had the Investment Advisor/Transfer Agent not waived a portion of expenses,
total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
(i) Rounds to less than 0.01%.
21
COLUMBIA GROWTH STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
CLASS Z SHARES 2005 2004 2003 (a) 2002 (a)(b) 2001 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.35 $ 8.32 $ 7.05 $ 9.45 $ 19.89
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(c) 0.06(d) --(e) --(e) 0.01(f) (0.01)(f)
Net realized and unrealized gain (loss) on investments 0.47 0.03 1.27 (2.41) (7.77)
-------- -------- -------- -------- --------
Total from Investment Operations 0.53 0.03 1.27 (2.40) (7.78)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (2.66)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.88 $ 8.35 $ 8.32 $ 7.05 $ 9.45
Total return (g) 6.35%(h) 0.36%(h) 17.96%(h) (25.34)%(h) (43.48)%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (i) 0.93% 0.89% 1.00% 0.88%(f) 0.95%(f)
Interest expense --%(j) -- --%(j) -- --
Net expenses (i) 0.93% 0.89% 1.00% 0.88%(f) 0.95%(f)
Net investment income (loss) (i) 0.71% (0.02)% 0.01% 0.08%(f) (0.05)%(f)
Waiver/reimbursement 0.04% 0.05% 0.06% 0.01% --
Portfolio turnover rate 2% 51% 108% 71% 73%(k)
Net assets, end of period (000's) $267,224 $359,891 $384,861 $360,240 $551,474
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Per share data has been restated to reflect a 3-for-1 share split effective
July 25, 2003.
(b) On July 15, 2002, the Stein Roe Growth Stock Fund was redesignated Liberty
Growth Stock Fund, Class Z shares.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.06 per share.
(e) Rounds to less than $0.01 per share.
(f) Per share amounts and ratios reflect income and expenses inclusive of the
Fund's proportionate share of the income and expenses of the SR&F Growth
Stock Portfolio prior to the termination of their master/feeder fund
structure on July 12, 2002.
(g) Total return at net asset value assuming all distributions reinvested.
(h) Had the Investment Advisor/Transfer Agent not waived a portion of expenses,
total return would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Round to less than 0.01%.
(k) Portfolio turnover rate disclosed is for the SR&F Growth Stock Portfolio.
22
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
COLUMBIA GROWTH STOCK FUND
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI AND THE SHAREHOLDERS OF COLUMBIA
GROWTH STOCK 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 the Columbia Growth Stock Fund (the
"Fund") (a series of Columbia Funds Trust XI) at September 30, 2005, the results
of its operations, the changes in its net assets, and its 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). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 21, 2005
23
TRUSTEES
COLUMBIA GROWTH STOCK 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,
YEAR FIRST ELECTED OR PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA FUNDS
APPOINTED TO OFFICE(1) 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, 2002 (formerly President
P.O. Box 66100 of UAL Loyalty Services (airline) from September, 2001 to December, 2002; Executive Vice President
Chicago, IL 60666 and Chief Financial Officer of United Airlines from July, 1999 to September, 2001; Senior Vice
Trustee (since 1996) President-Finance from March, 1993 to July, 1999). Oversees 86, Nash Finch Company (food distributor)
-------------------------------------------------------------------------------------------------------
JANET LANGFORD KELLY Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) since March, 2005; Adjunct Professor
(Age 47) of Law, Northwestern University, since September, 2004 (formerly Chief Administrative Officer and
9534 W. Gull Lake Drive Senior Vice President, Kmart Holding Corporation (consumer goods) from September, 2003 to March, 2004;
Richland, MI 49083-8530 Executive Vice President-Corporate Development and Administration, General Counsel and Secretary,
Trustee (since 1996) 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 86, None
-------------------------------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood
10701 Charleston Drive Corporation (building products manufacturer)). Oversees 89(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 Louisa Van Voorhis
Department of Economics Professor of Political Economy, University of Washington, since September, 1993 (formerly Director,
University of Washington Institute for Economic Research, University of Washington from September, 2001 to June, 2003);
Seattle, WA 98195 Adjunct Professor of Statistics, University of Washington, since September, 1980; Associate Editor,
Trustee (since 1981) Journal of Money Credit and Banking, since September, 1993; consultant on
econometric and statistical matters. Oversees 86, None
-------------------------------------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 63) Academic Vice President and Dean of Faculties since August, 1999, Boston College (formerly Dean,
84 College Road Boston College School of Management from September, 1977 to August, 1999). Oversees 89(3),
Chestnut Hill, MA 02467-3838 Saucony, Inc. (athletic footwear)
Trustee (since 1985)
-------------------------------------------------------------------------------------------------------
24
NAME, ADDRESS AND AGE,
POSITION WITH FUNDS,
YEAR FIRST ELECTED OR PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA FUNDS
APPOINTED TO OFFICE(1) COMPLEX OVERSEEN BY TRUSTEE/DIRECTOR, OTHER DIRECTORSHIPS HELD
DISINTERESTED TRUSTEES
PATRICK J. SIMPSON (Age 61) Partner, Perkins Coie L.L.P. (law firm). Oversees 86, 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, College of
2208 Tawny Woods Place Business, Boise State University); Chartered Financial Analyst. Oversees 86, None
Boise, ID 83706
Trustee (since 1998)
-------------------------------------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 68) Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September,
8 Sound Shore Drive, 2004 (formerly Managing Director, William Blair Capital Partners (private equity investing) from
Suite 285 September, 1994 to September, 2004). Oversees 86, Anixter International (network support
Greenwich, CT 06830 equipment distributor); Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate
Trustee and Chairman management services) and Ambac Financial Group (financial guaranty insurance)
of the Board(4) (since 1996)
-------------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 60) Retired since 1997 (formerly General Manager, Global Education Industry, IBM Corporation
359 Stickney Hill Road (computer and technology) from 1994 to 1997). Oversees 86, Chairman of the Board of Directors,
Hopkinton, NH 03229 Enesco Group, Inc. (designer, importer and distributor of giftware and collectibles)
Trustee (since 1998)
-------------------------------------------------------------------------------------------------------
RICHARD L. WOOLWORTH Retired since December, 2003 (formerly Chairman and Chief Executive Officer, The Regence Group
(Age 64) (regional health insurer); Chairman and Chief Executive Officer, BlueCross BlueShield of Oregon;
100 S.W. Market Certified Public Accountant, Arthur Young & Company). Oversees 86, Northwest Natural Gas Co.
Street #1500 (natural gas service provider)
Portland, OR 97207
Trustee (since 1991)
-------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER(2) (Age 65) Partner, Park Avenue Equity Partners (private equity) since February, 1999 (formerly Partner,
399 Park Avenue Development Capital LLC from November 1996, to February, 1999). Oversees 89(3), Lee Enterprises
Suite 3204 (print media), WR Hambrecht + Co. (financial service provider); Reader's Digest (publishing);
New York, NY 10022 OPENFIELD Solutions (retail industry technology provider)
Trustee (since 1994)
-------------------------------------------------------------------------------------------------------
(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 3 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.
25
OFFICERS
COLUMBIA GROWTH STOCK 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 Managing Director of the Advisor since September,
One Financial Center 2005; President of the Columbia Funds, Liberty Funds and Stein Roe Funds since October, 2004;
Boston, MA 02111 President and Chief Executive Officer of the Nations Funds since January, 2005; President of
President (since 2004) 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; Director of FIM Funding, Inc. since January, 2005; Senior Vice President of Columbia
Management Distributors, Inc. since January, 2005; Director of Columbia Management Services,
Inc. since January, 2005 (formerly Senior Vice President of Columbia Management from January,
2005 to August, 2005; Senior Vice President of BACAP Distributors LLC from January, 2005
to July, 2005; 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, Stein Roe Funds
One Financial Center and All-Star Funds since December, 2000; Managing Director of the Advisor since September,
Boston, MA 02111 (formerly Vice President of Columbia Management from April, 2003 to August, 2005; President
Treasurer (since 2000) of 2005 the Columbia Funds, Liberty Funds 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 56) Senior Vice President and Chief Compliance Officer of the Columbia Funds, Liberty Funds, Stein
100 Federal Street Roe Funds and All-Star Funds since August, 2004; Chief Compliance Officer of the Columbia
Boston, MA 02110 Management Multi-Strategy Hedge Fund, LLC since August 2004; Chief Compliance Officer of the
Senior Vice President and Chief BACAP Alternative Multi-Strategy Hedge Fund LLC since October 2004 (formerly Partner, Carter,
Compliance Ledyard & Milburn LLP from January, 2001 to August, 2004; Counsel, Carter, Ledyard & Milburn
Officer (since 2004) LLP from November, 1999 to December, 2000; Vice President and 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 All-Star Funds
One Financial Center since October, 2004; Managing Director of the Advisor since September, 2005 (formerly Controller
Boston, MA 02111 of the Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star Funds from May, 2004 to
Chief Accounting Officer October, 2004; Assistant Treasurer from June, 2002 to May, 2004; Vice President, Product Strategy
(since 2004) & 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 Funds since
One Financial Center October, 2004 (formerly Vice President of CDC IXIS Asset Management Services, Inc. and Deputy
Boston, MA 02111 Treasurer of the CDC Nvest Funds and Loomis Sayles Funds from February, 2003 to September, 2004;
Controller (since 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, 2004 (formerly
One Financial Center Of Counsel, Bingham McCutchen from April, 2001 to September, 2004; Executive Director and
Boston, MA 02111 General Counsel, Massachusetts Pension Reserves Investment Management Board from September,
Secretary (since 2004) 1997 to March, 2001).
-------------------------------------------------------------------------------------------------
26
COLUMBIA FUNDS
COLUMBIA GROWTH STOCK FUND
----------------------------------------------------------------------------------------
GROWTH FUNDS Columbia Acorn Fund
Columbia Acorn Select
Columbia Acorn USA
Columbia Growth Stock Fund
Columbia Large Cap Growth Fund
Columbia Marsico 21st Century Fund
Columbia Marsico Focused Equities Fund
Columbia Marsico Growth Fund
Columbia Marsico Mid Cap Growth Fund
Columbia Mid Cap Growth Fund
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund II
Columbia Small Company Equity Fund
Columbia Tax-Managed Growth Fund
----------------------------------------------------------------------------------------
CORE FUNDS Columbia Common Stock Fund
Columbia Large Cap Core Fund
Columbia Small Cap Core Fund
Columbia Young Investor Fund
----------------------------------------------------------------------------------------
VALUE FUNDS Columbia Disciplined Value
Fund Columbia Dividend Income Fund
Columbia Large Cap Value Fund
Columbia Mid Cap Value Fund Columbia
Small Cap Value Fund I Columbia
Small Cap Value Fund II Columbia
Strategic Investor
----------------------------------------------------------------------------------------
ASSET ALLOCATION/HYBRID FUNDS Columbia Asset Allocation Fund
Columbia Asset Allocation Fund II
Columbia Balanced Fund
Columbia Liberty Fund
Columbia LifeGoalTM Balanced Growth Portfolio
Columbia LifeGoalTM Growth Portfolio
Columbia LifeGoalTM Income Portfolio
Columbia LifeGoalTM Income and Growth Portfolio
Columbia Thermostat Fund
----------------------------------------------------------------------------------------
INDEX FUNDS Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Index Fund
Columbia Mid Cap Index Fund
Columbia Small Cap Index Fund
----------------------------------------------------------------------------------------
SPECIALTY FUNDS Columbia Convertible Securities Fund
Columbia Real Estate Equity Fund
Columbia Technology Fund
Columbia Utilities Fund
----------------------------------------------------------------------------------------
GLOBAL/INTERNATIONAL FUNDS Columbia Acorn International
Columbia Acorn International Select
Columbia Global Value Fund
Columbia Greater China Fund
Columbia International Stock Fund
Columbia International Value Fund
Columbia Marsico International Opportunities Fund
Columbia Multi-Advisor International Equity Fund
Columbia World Equity Fund
----------------------------------------------------------------------------------------
TAXABLE BOND FUNDS Columbia Conservative High Yield Fund
Columbia Core Bond Fund
Columbia Federal Securities Fund
Columbia High Income Fund
Columbia High Yield Opportunity Fund
Columbia Income Fund
Columbia Intermediate Bond Fund
Columbia Intermediate Core Bond Fund
Columbia Short Term Bond Fund
Columbia Strategic Income Fund
Columbia Total Return Bond
Columbia U.S. Treasury Index Fund
27
COLUMBIA GROWTH STOCK FUND
----------------------------------------------------------------------------------------
TAX-EXEMPT BOND FUNDS Columbia California Tax-Exempt Fund
Columbia CA Intermediate Municipal Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia CT Intermediate Municipal Bond Fund
Columbia FL Intermediate Municipal Bond Fund
Columbia GA Intermediate Municipal Bond Fund
Columbia High Yield Municipal Fund
Columbia Intermediate Municipal Bond Fund
Columbia MA Intermediate Municipal Bond Fund
Columbia Massachusetts Tax-Exempt Fund
Columbia MD Intermediate Municipal Bond Fund
Columbia Municipal Income Fund
Columbia NC Intermediate Municipal Bond Fund
Columbia New York Tax-Exempt Fund
Columbia NJ Intermediate Municipal Bond Fund
Columbia NY Intermediate Municipal Bond Fund
Columbia OR Intermediate Municipal Bond Fund
Columbia RI Intermediate Municipal Bond Fund
Columbia SC Intermediate Municipal Bond Fund
Columbia Short Term Municipal Bond Fund
Columbia Tax-Exempt Fund
Columbia Tax-Exempt Insured Fund
Columbia TX Intermediate Municipal Bond Fund
Columbia VA Intermediate Municipal Bond Fund
----------------------------------------------------------------------------------------
MONEY MARKET FUNDS Columbia Cash Reserves
Columbia CA Tax-Exempt Reserves
Columbia Government Reserves
Columbia Government Plus Reserves
Columbia MA Municipal Reserves
Columbia Money Market Reserves
Columbia Municipal Reserves
Columbia NY Tax-Exempt Reserves
Columbia Prime Reserves
Columbia Tax-Exempt Reserves
Columbia Treasury Reserves
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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A., merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
28
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA GROWTH STOCK 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 Stock 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 relating to its portfolio securities 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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A., merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
29
graphic: eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Growth Stock Fund Annual Report, September 30, 2005
-------------
PRSRT STD
U.S. Postage
PAID
Holliston, MA
Permit NO. 20
-------------
Columbia Management(R)
(c) 2005 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/91121-0905 (11/05) 05/8399
COLUMBIA
YOUNG INVESTOR
FUND
ANNUAL REPORT
SEPTEMBER 30, 2005
sidebar
TABLE OF CONTENTS
PERFORMANCE INFORMATION ....................... 1
FUND PROFILE .................................. 2
UNDERSTANDING YOUR EXPENSES ................... 3
ECONOMIC UPDATE ............................... 4
PORTFOLIO MANAGER'S REPORT .................... 5
FINANCIAL STATEMENTS .......................... 7
INVESTMENT PORTFOLIO ....................... 8
STATEMENT OF ASSETS AND LIABILITIES ........ 15
STATEMENT OF OPERATIONS .................... 16
STATEMENT OF CHANGES IN NET ASSETS ......... 17
NOTES TO FINANCIAL STATEMENTS ................. 19
FINANCIAL HIGHLIGHTS .......................... 26
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM ..................... 30
TRUSTEES ...................................... 31
OFFICERS ...................................... 33
COLUMBIA FUNDS ................................ 34
IMPORTANT INFORMATION
ABOUT THIS REPORT ............................. 36
ACTIVITY PAGES ................................ I
The views expressed in the President's Message and Portfolio Manager's 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.
Graphic:
- -----------------
Not FDIC Insured
- -----------------
May Lose Value
- -----------------
No Bank Guarantee
- -----------------
end sidebar
PRESIDENT'S MESSAGE
Photo of: Christopher L. Wilson
DEAR SHAREHOLDER:
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 integrated various components of Nations Funds, Galaxy Funds and
Columbia Funds, resulting in a single fund family under the Columbia name 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. In addition to expanding the level of services
available to the funds, portfolio managers and shareholders, we have been able
to achieve significant cost savings for the funds by aggregating our business.
In September, we made major inroads in the initiative to streamline our product
offerings. This included merging several funds and renaming Nations Funds as
Columbia Funds, as well as consolidating the Nations and Columbia web sites.
Over the summer, we completed the service provider consolidation for shareholder
servicing. As we work to complete the remaining product and service provider
consolidations by the end of 2005, we remain committed to building a mutual fund
business that helps you meet, and hopefully exceed, your personal financial
goals. 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 continually earned and will
remain focused on producing results for you. We will continue to strive for the
highest standards of performance and service excellence.
All of these efforts have been undertaken to enable you, as a shareholder, to
benefit from the execution of a consolidated business plan. We believe a more
streamlined fund family with consistent performance and lower fees will provide
the best opportunity for investment growth. We also believe that providing more
robust services to you through multiple channels (Web, phones, voice response)
will be beneficial to 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 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 financial goals on target in the years to come.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
President, Columbia Funds
Head of Mutual Funds, Columbia Management
Christopher L. Wilson is Head of Mutual Funds for Columbia Management and
responsible for the day-to-day delivery of mutual fund services to the firm's
investors. Working closely with the Legal and Compliance teams, Chris oversees
all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. As President and CEO
of Columbia Funds (formerly Nations, Galaxy and Columbia Funds), Chris serves as
the primary interface to the Fund Boards. Chris joined Bank of America in 2004.
PERFORMANCE INFORMATION
COLUMBIA YOUNG INVESTOR 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.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE: WITHOUT WITH
CLASS A 20,982 19,778
CLASS B 20,522 20,522
CLASS C 20,537 20,537
CLASS Z 21,007 N/A
end sidebar
CLASS A SHARES CLASS A SHARES RUSSELL 3000
WITHOUT SALES CHARGE WITH SALES CHARGE INDEX
OCT-95 10000 9425 10000
9797 9234 9914
10356 9761 10354
10427 9827 10523
10835 10212 10828
10980 10348 10988
11438 10780 11099
12208 11506 11310
12797 12061 11600
13044 12294 11563
12179 11479 10958
12725 11993 11290
13553 12774 11904
13741 12951 12122
14280 13459 12977
14086 13276 12821
14741 13893 13530
14358 13532 13545
13401 12631 12933
14003 13198 13570
15087 14219 14497
15810 14901 15100
16908 15936 16284
16328 15390 15623
17127 16142 16509
16630 15674 15954
17044 16064 16565
17787 16765 16896
17894 16865 16984
19329 18218 18198
20077 18923 19101
20306 19139 19288
19612 18484 18812
20734 19541 19448
20054 18900 19094
16334 15394 16169
17318 16323 17271
18510 17446 18582
19602 18475 19719
20925 19722 20974
21896 20637 21687
21121 19907 20919
22773 21463 21687
23351 22008 22665
22546 21249 22234
23648 22288 23357
22397 21109 22649
21942 20681 22391
21457 20224 21818
23226 21890 23186
24696 23276 23835
27553 25969 25356
26914 25366 24362
29379 27690 24588
30249 28509 26513
27753 26157 25580
25192 23743 24861
27522 25939 25597
27070 25514 25144
29780 28068 27010
28389 26757 25786
27450 25871 25420
24005 22625 23076
24785 23360 23464
26009 24514 24267
23333 21991 22049
21529 20291 20611
23570 22215 22264
23424 22077 22442
22562 21265 22029
21084 19872 21666
19661 18531 20388
17013 16035 18589
17593 16581 19022
19162 18060 20487
19335 18223 20776
18809 17727 20516
18310 17257 20098
19398 18283 20978
18219 17171 19877
17856 16829 19646
16578 15624 18232
15125 14256 16782
15047 14182 16861
13467 12692 15089
14558 13721 16290
15648 14748 17276
14589 13750 16300
14288 13467 15900
14067 13258 15638
14193 13377 15802
15283 14404 17093
16089 15164 18126
16135 15208 18370
16482 15535 18791
16988 16011 19208
16547 15595 18999
17574 16564 20148
17827 16802 20426
18571 17503 21360
18777 17697 21806
18902 17816 22100
18681 17607 21837
18285 17234 21385
18633 17561 21695
18964 17874 22127
18285 17234 21291
18190 17144 21378
18460 17398 21707
18618 17548 22063
19439 18322 23089
20133 18976 23911
19656 18526 23275
20212 19050 23787
19927 18782 23385
19499 18378 22878
20024 18872 23745
20024 18872 23911
20738 19546 24891
20722 19530 24655
SEP-05 20982 19778 24869
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Young Investor 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 3000 Index is an
unmanaged index that tracks the performance of 3,000 of the largest US
companies, based on market capitalization. Unlike the fund, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. Securities in the fund may
not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
- ------------------------------------------------------------------------------------------------------------------
SHARE CLASS A B C Z
- ------------------------------------------------------------------------------------------------------------------
INCEPTION 07/29/02 07/29/02 07/29/02 04/29/94
- ------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- ------------------------------------------------------------------------------------------------------------------
1-YEAR 13.62 7.11 12.87 7.87 12.86 11.86 13.95
- ------------------------------------------------------------------------------------------------------------------
5-YEAR -5.88 -6.98 -6.29 -6.62 -6.28 -6.28 -5.85
- ------------------------------------------------------------------------------------------------------------------
10-YEAR 7.69 7.06 7.45 7.45 7.46 7.46 7.70
- ------------------------------------------------------------------------------------------------------------------
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD BE LOWER.
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. PERFORMANCE FOR DIFFERENT SHARE CLASSES
WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH
CLASS.
Class A, B and C shares (newer class shares) performance information includes
returns for the fund's class Z shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. The newer class shares
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between class Z shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of the newer class shares would have been lower. Class A, B and C shares were
initially offered July 29, 2002 and class Z shares were initially offered April
29, 1994.
1
FUND PROFILE
COLUMBIA YOUNG INVESTOR FUND
sidebar
SUMMARY
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2005, THE FUND'S CLASS A SHARES
RETURNED 13.62% WITHOUT SALES CHARGE.
o STRONG STOCK MARKET RETURNS EARLY IN THE PERIOD HELPED THE FUND, ITS
BENCHMARK AND PEER GROUP TO DOUBLE DIGIT RETURNS FOR THE PERIOD.
o ENERGY AND HEALTH CARE STOCKS WERE THE FUND'S BEST PERFORMERS, WITH
ADDITIONAL CONTRIBUTIONS FROM FINANCIAL STOCKS.
CLASS A SHARES RUSSELL 3000
13.62% INDEX
14.57%
artwork: 2 arrows up
OBJECTIVE
Seeks long-term
growth
TOTAL NET ASSETS
$768.4 million
MANAGEMENT STYLE
artwork: Equity Style: Blend
Size: Large
end sidebar
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.
SECTORS AS OF 09/30/05 (%)
FINANCIALS 18.6
INFORMATION TECHNOLOGY 17.0
HEALTH CARE 16.9
ENERGY 11.7
CONSUMER DISCRETIONARY 10.4
CONSUMER STAPLES 8.5
INDUSTRIALS 7.7
MATERIALS 5.0
UTILITIES 2.3
TELECOMMUNICATION SERVICES 1.9
TOP 10 HOLDINGS AS OF 09/30/05 (%)
EXXON MOBIL 2.9
MICROSOFT 1.9
CITIGROUP 1.7
SCHLUMBERGER 1.7
JOHNSON & JOHNSON 1.5
MEDTRONIC 1.5
NOVARTIS 1.4
GENERAL ELECTRIC 1.4
AMERICAN INTERNATIONAL GROUP 1.3
NEWFIELD EXPLORATION 1.3
Portfolio holdings are calculated as a percentage of net assets. Sector
breakdown is calculated as a percentage of total investments excluding
short-term investments.
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.
2
UNDERSTANDING YOUR EXPENSES
COLUMBIA YOUNG INVESTOR 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.
end sidebar
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
- ---------------------------------------------------------------------------------------------------------------------------
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
CLASS A 1,000.00 1,000.00 1,052.59 1,018.31 6.94 6.82 1.35
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,049.28 1,014.80 10.52 10.35 2.05
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,049.28 1,014.80 10.52 10.35 2.05
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,059.47 1,025.07 5.64 5.54 1.09
- ---------------------------------------------------------------------------------------------------------------------------
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.)
Had the Investment Advisor/Transfer Agent not waived or reimbursed a portion of
class A, B, C and Z shares' expenses, total return would have been reduced.
Had the distributor not waived a portion of class A shares' distribution fee,
total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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 YOUNG INVESTOR FUND
sidebar
SUMMARY
FOR THE 12-MONTH PERIOD ENDED
SEPTEMBER 30, 2005
o DESPITE BOUTS OF VOLATILITY, THE BROAD STOCK MARKET GENERATED A
DOUBLE-DIGIT RETURN FOR THE PERIOD. THE S&P 500 INDEX RETURNED 12.25%. AS
THE ECONOMY EXPANDED, SMALL-CAP STOCKS OUTPERFORMED LARGE-CAP STOCKS, AS
MEASURED BY THE RUSSELL 2000 INDEX.
S&P 500 INDEX RUSSELL 2000 INDEX
12.25% 17.95%
artwork: 2 arrows up
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.
LEHMAN INDEX MERRILL LYNCH INDEX
2.80% 6.69%
artwork: 2 arrows up
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
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, and
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.
emd sidebar
The US economy moved ahead at a healthy pace during the 12-month period that
began October 1, 2004 and ended September 30, 2005. Gross domestic product (GDP)
expanded at an annualized rate of 3.8% as job growth helped sustain consumer
spending and rising profits boosted business spending. Employment data was
solid, even in light of Hurricanes Katrina and Rita, which disrupted the labor
market near the end of the period. During the first 11 months of the period, the
economy added an average of 185,000 new jobs each month. In September, 8,000
jobs were lost as a direct result of the Gulf Coast floods, and the unemployment
rate rose from 4.9% to 5.1%. However, the number of jobs lost was lower than
originally estimated - and considerably lower than expected.
Energy prices weighed on economic growth as the period wore on. The first signs
of relief came in September as the price of crude oil retreated from a record
high of $69.81 a barrel. Signs of slower growth cropped up in retail spending.
And, consumer confidence readings dipped in July and fell sharply in September.
The decline was the largest in 25 years, according to the University of
Michigan's monthly survey.
Despite these setbacks, the latest data on the economy suggest that it has
retained momentum. Manufacturing activity remained strong, and business activity
in non-manufacturing industries continued to expand, although the pace slowed in
September.
DESPITE VOLATILITY, STOCKS MOVED AHEAD
The S&P 500 Index--a broad measure of large company stock market
performance--returned 12.25% for this reporting period. The double-digit gain
masked considerable volatility. Early in the period, stocks rallied after the
presidential election then again in response to positive economic news midway
through the period and in the aftermath of two hurricanes. These rallies,
however, alternated with declines linked to higher energy prices, rising
interest rates and weakening consumer confidence. Small- and mid-cap stocks
outperformed large-cap stocks. Value stocks led growth stocks except among small
caps, where growth gained a small advantage over value.
BONDS DELIVERED MODEST GAINS
The US bond market delivered positive but modest returns despite steadily rising
short-term interest rates and higher long-term rates in the final months of the
period. Interest rates and bond prices move in opposite directions. The Lehman
Brothers Aggregate Bond Index, a broad measure of the performance of
investment-grade bonds returned 2.80% for the 12-month period. The yield on the
10-year US Treasury note, a bellwether for the bond market, ended the period at
just over 4.3%--slightly higher than where it started the period. High-yield
bonds led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 6.69%.
SHORT-TERM INTEREST RATES MOVED HIGHER
The Federal Reserve Board (the Fed) raised the federal funds rate, a key
short-term rate, from 1.75% to 3.75% during the period. In the wake of
Hurricanes Katrina and Rita, some market observers speculated that the Fed might
curtail its rate hikes. However, Fed Chairman Greenspan indicated that inflation
was a greater concern than the sustainability of economic growth and we believe
that the Fed is likely to continue to raise short-term interest rates into the
first half of 2006.
4
PORTFOLIO MANAGER'S REPORT
COLUMBIA YOUNG INVESTOR 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 09/30/05 ($)
CLASS A 13.21
CLASS B 12.98
CLASS C 12.99
CLASS Z 11.52
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 0.06
CLASS B 0.00
CLASS C 0.00
CLASS Z 0.05
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
EXXON MOBIL 2.9
AMERADA HESS 1.2
HUMANA 1.2
COVENTRY HEALTH CARE 1.0
PFIZER 1.2
GAP 0.5
MITSUBISHI TOKYO FINANCIAL
GROUP 1.4
MIZUHO FINANCIAL GROUP 1.2
AVON PRODUCTS 0.6
ESTEE LAUDER COS. 0.4
COLGATE-PALMOLIVE 1.0
MARVELL TECHNOLOGY GROUP 0.6
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
end sidebar
HOW DID THE FUND PERFORM?
During the 12-month period ended September 30, 2005, the fund's class A shares
returned 13.62% (without sales charges) slightly underperforming its benchmark
the Russell 3000 Index which returned 14.57%. The fund's performance was better
than the 13.17% average return of funds in its peer group, the Morningstar(R)
Large Blend Category.1
Which sectors had the greatest positive impact on the fund's performance during
the period?
Several sectors, including energy, healthcare, consumer discretionary,
financials and materials, made a positive contribution to the fund's relative
performance. Throughout the reporting period a recurring theme in the news was
the rising price of crude oil. We believe that emerging markets - like India and
China - have propelled the demand for energy and raw materials, and companies in
these sectors benefited as prices were driven upward by increased demand and
limited supply. While the jump in oil prices hurt consumers, it helped oil
producers. In the energy sector, the fund benefited from its investments in
Exxon Mobil and Amerada Hess and the sector overall was a solid contributor to
performance.
The fund's health care investments also contributed to performance. Among the
fund's strong performers in the health care sector were Humana and Coventry
Health Care. Not all of the fund's health care stocks did well. Pfizer's share
price declined as investors worried about the impact of upcoming patent
expirations, as well as the risks associated with a popular pain management
drug. In addition, the fund's investment in Pharmion was a disappointment and
detracted from the fund's return. We sold the stock.
In the consumer discretionary sector, Abercrombie & Fitch was a standout
performer. However, within the context of a broader effort to reduce the
portfolio's exposure to a potential slowdown in consumer demand, we took
advantage of the stock's strong performance and sold our position. By contrast,
Gap and PETsMART detracted from the fund's return. We held onto Gap but sold
PETsMART.
While financial stocks trailed the broader market due to concerns over rising
interest rates, some of our investments in the sector were strong. The fund
benefited from its investments in Japanese banks, Mitsubishi Tokyo Financial
Group and Mizuho Financial Group.
WHICH SECTORS HURT PERFORMANCE?
Consumer staples, industrials, technology, telecom services and utilities, all
detracted from fund returns. Avon Products, a global cosmetics company,
struggled with sales in important overseas markets and the stock detracted from
returns. The fund's investment in Estee Lauder Cos. was also a disappointment
and the stock detracted from returns. However, both Chiquita Brands
International and Colgate-Palmolive were strong
1 (C)2005, 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 YOUNG INVESTOR FUND
sidebar
DID YOU KNOW?
Consumer stocks fall into two broad categories. Consumer discretionary stocks
include all types of retail stores, media companies, hotels and restaurants.
They reflect the consumer's optional spending--those purchases that are not
essential. These companies can or typically thrive when economic growth is
strong, but they can pull back when the economy weakens and consumers become
more careful with their spending. By contrast, the consumer staples sector
includes companies that make and market products that consumers consider
essentials, such as food, beverages, drugs and personal care products. These
companies may not look very exciting when economic growth is strong, but
investors tend to favor them in lean economic times on the theory that consumers
still need to eat and do the laundry.
end sidebar
performers for the fund. We sold Chiquita Brands International but held onto
Colgate-Palmolive. In addition, the fund's investments in the industrial sector
overall were a disappointment and several stocks were sold, including Honeywell
International and Emerson Electric.
Within technology, the fund benefited from its investments in Marvell Technology
Group, a company that makes integrated circuits, and Autodesk, which makes
design and drafting software for businesses. We held onto Marvell Technology
Group but sold Autodesk, taking profits. On the downside, Diebold and InfoSpace
detracted from portfolio returns and were sold.
WHAT IS YOUR STRATEGY GOING FORWARD?
We believe that the economy could be entering the mature phase of its current
cycle. With that in mind, we plan to seek out companies that have demonstrated
the ability to maintain steady growth independent of the economy. We plan to
focus on large companies and de-emphasize small and mid-sized companies. In
addition, we have increased the fund's investments in markets outside the United
States. We plan to continue to evaluate overseas markets for investment
opportunities, seeking the reasonably priced stocks of companies with the
opportunity to benefit from compelling growth trends.
Photo of: Emil A. Gjester
Emil A. Gjester has managed Columbia Young Investor Fund since May 2005.
/s/ Emil A. Gjester
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investments in small- and mid-cap stocks may present special risks. They tend to
be more volatile and may be less liquid than the stocks of larger companies.
Small-cap stocks often have narrower markets, limited financial resources and
tend to be more thinly traded than stocks of larger companies.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
6
FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value as
of the last day of the reporting period. Portfolio holdings are organized by
type of asset, industry, country or geographic region (if applicable) to
demonstrate areas of concentration and diversification.
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price
for each share class as of the last day of the reporting period. Net assets are
calculated by subtracting all the fund's liabilities (including any unpaid expenses)
from the total of the fund's investment and non-investment assets. The share price
for each class is calculated by dividing net assets for that class by the number of
shares outstanding in that class as of the last day of the reporting period.
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund
during the reporting period. The Statement of Operations also shows any net gain or
loss the fund realized on the sales of its holdings during the period, as well as any
unrealized gains or losses recognized over the period. The total of these results
represents the fund's net increase or decrease in net assets from operations.
- ------------------------------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating
results, distributions to shareholders and shareholder transactions (e.g.,
subscriptions, redemptions and dividend reinvestments) during the reporting period.
The Statement of Changes in Net Assets also details changes in the number of shares
outstanding.
- ------------------------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees and
compensation paid to affiliates and significant risks and contingencies.
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was
affected by the fund's operating results. The financial highlights table also
discloses the classes' performance and certain key ratios (e.g., class expenses and
net investment income as a percentage of average net assets).
7
INVESTMENT PORTFOLIO
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - 95.4%
CONSUMER DISCRETIONARY - 10.0% SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
AUTO COMPONENTS - 0.4% Nokian Renkaat Oyj 120,000 2,846,624
Auto Components Total 2,846,624
-----------------------------------------------------------------------------
DIVERSIFIED CONSUMER SERVICES - 0.7% Career Education Corp. (a) 150,000 5,334,000
Diversified Consumer Services Total 5,334,000
-----------------------------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE - 1.5% McDonald's Corp. 50,000 1,674,500
Starbucks Corp. (a) 90,000 4,509,000
Yum! Brands, Inc. 110,000 5,325,100
Hotels, Restaurants & Leisure Total 11,508,600
-----------------------------------------------------------------------------
INTERNET & CATALOG RETAIL - 0.4% eBay, Inc. (a) 80,000 3,296,000
Internet & Catalog Retail Total 3,296,000
-----------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS - 0.5% Amer Sports Oyj 24,238 463,312
Marvel Enterprise, Inc. (a) 200,000 3,574,000
Leisure Equipment & Products Total 4,037,312
-----------------------------------------------------------------------------
MEDIA - 3.8% Grupo Televisa SA, ADR 14,200 1,018,282
Liberty Global, Inc., Class A (a) 40,000 1,083,200
Liberty Global, Inc., Class C (a) 40,000 1,030,000
McClatchy Co., Class A 67,800 4,422,594
McGraw-Hill Companies, Inc. 67,458 3,240,682
News Corp., Class B 170,000 2,805,000
Pixar (a) 75,000 3,338,250
R.H. Donnelley Corp. (a) 97,700 6,180,502
Time Warner, Inc. 230,000 4,165,300
Viacom, Inc., Class B 50,000 1,650,500
Media Total 28,934,310
-----------------------------------------------------------------------------
MULTILINE RETAIL - 0.2% Federated Department Stores, Inc. 25,000 1,671,750
Multiline Retail Total 1,671,750
-----------------------------------------------------------------------------
SPECIALTY RETAIL - 1.9% Barnes & Noble, Inc. 110,000 4,147,000
Gap, Inc. 200,000 3,486,000
Home Depot, Inc. 175,000 6,674,500
Specialty Retail Total 14,307,500
-----------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 0.6% NIKE, Inc., Class B 55,000 4,492,400
Textiles, Apparel & Luxury Goods Total 4,492,400
------------
CONSUMER DISCRETIONARY TOTAL 76,428,496
CONSUMER STAPLES - 8.2%
- ------------------------------------------ -----------------------------------------------------------------------------
BEVERAGES - 1.6% Coca-Cola Co. 200,000 8,638,000
PepsiCo, Inc. 71,032 4,028,225
Beverages Total 12,666,225
-----------------------------------------------------------------------------
FOOD & STAPLES RETAILING - 0.6% Walgreen Co. 100,000 4,345,000
Food & Staples Retailing Total 4,345,000
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
8
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - (CONTINUED)
CONSUMER STAPLES - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
FOOD PRODUCTS - 2.6% Nestle SA, Registered Shares 27,000 7,912,558
Smithfield Foods, Inc. (a) 65,000 1,929,200
Unilever NV, NY Registered Shares 60,000 4,287,000
Wrigley (Wm.) Jr. Co. 80,000 5,750,400
Food Products Total 19,879,158
-----------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 2.4%
Colgate-Palmolive Co. 141,800 7,485,622
Kimberly-Clark Corp. 30,000 1,785,900
Procter & Gamble Co. 150,000 8,919,000
Household Products Total 18,190,522
-----------------------------------------------------------------------------
PERSONAL PRODUCTS - 1.0%
Avon Products, Inc. 175,000 4,725,000
Estee Lauder Cos., Inc., Class A 80,000 2,786,400
Personal Products Total 7,511,400
------------
CONSUMER STAPLES TOTAL 62,592,305
ENERGY - 11.2%
- ------------------------------------------ -----------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES - 3.1% Cooper Cameron Corp. (a) 35,000 2,587,550
National-Oilwell Varco, Inc. (a) 40,000 2,632,000
Schlumberger Ltd. 151,900 12,817,322
TGS Nopec Geophysical Co., ASA (a) 60,000 2,561,236
Veritas DGC, Inc. (a) 90,000 3,295,800
Energy Equipment & Services Total 23,893,908
-----------------------------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS - 8.1% Amerada Hess Corp. 67,500 9,281,250
BP PLC, ADR 75,000 5,313,750
Chevron Corp. 85,000 5,502,050
ConocoPhillips 118,600 8,291,326
Exxon Mobil Corp. 350,000 22,239,000
Newfield Exploration Co. (a) 200,000 9,820,000
Plains Exploration & Production Co. (a) 40,000 1,712,800
Oil, Gas & Consumable Fuels Total 62,160,176
------------
ENERGY TOTAL 86,054,084
FINANCIALS - 17.7%
- ------------------------------------------ -----------------------------------------------------------------------------
CAPITAL MARKETS - 2.5% Bank of New York Co., Inc. 83,517 2,456,235
Federated Investors, Inc., Class B 50,000 1,661,500
Lazard Ltd., Class A 40,000 1,012,000
Merrill Lynch & Co., Inc. 75,383 4,624,747
Morgan Stanley 110,000 5,933,400
Nomura Holdings, Inc., ADR 220,000 3,418,800
Capital Markets Total 19,106,682
-----------------------------------------------------------------------------
COMMERCIAL BANKS - 6.1% City National Corp. 55,400 3,882,986
HSBC Holdings PLC, ADR 80,000 6,498,400
ICICI Bank Ltd., ADR 100,000 2,825,000
Mitsubishi Tokyo Financial Group, Inc. 600 7,951,083
Mitsubishi Tokyo Financial Group, Inc., ADR 200,000 2,606,000
Mizuho Financial Group, Inc. 1,400 8,974,774
U.S. Bancorp 160,000 4,492,800
See Accompanying Notes to Financial Statements.
9
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
COMMERCIAL BANKS - (CONTINUED) Wachovia Corp. 80,000 3,807,200
Wells Fargo & Co. 99,831 5,847,102
Commercial Banks Total 46,885,345
-----------------------------------------------------------------------------
CONSUMER FINANCE - 1.9% American Express Co. 140,000 8,041,600
SLM Corp. 121,000 6,490,440
Consumer Finance Total 14,532,040
-----------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 3.1% Citigroup, Inc. 290,000 13,200,800
JPMorgan Chase & Co. 170,000 5,768,100
Principal Financial Group, Inc. 100,000 4,737,000
Diversified Financial Services Total 23,705,900
-----------------------------------------------------------------------------
INSURANCE - 4.1% American International Group, Inc. 167,291 10,365,350
Berkshire Hathaway, Inc., Class B (a) 3,200 8,739,200
Chubb Corp. 25,865 2,316,211
First American Corp. 50,000 2,283,500
Fuji Fire & Marine Insurance Co., Ltd. 250,000 957,789
Lincoln National Corp. 100,000 5,202,000
SAFECO Corp. 40,000 2,135,200
Insurance Total 31,999,250
------------
FINANCIALS TOTAL 136,229,217
HEALTH CARE - 16.1%
- ------------------------------------------ -----------------------------------------------------------------------------
BIOTECHNOLOGY - 2.1% Abgenix, Inc. (a) 100,000 1,268,000
Amgen, Inc. (a) 100,000 7,967,000
Applera Corp. - Applied Biosystems Group 75,000 1,743,000
Biogen Idec, Inc. (a) 57,500 2,270,100
Millennium Pharmaceuticals, Inc. (a) 125,000 1,166,250
Qiagen NV (a) 130,000 1,695,200
Biotechnology Total 16,109,550
-----------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES - 3.8% Adeza Biomedical Corp. (a) 150,000 2,611,500
DENTSPLY International, Inc. 50,000 2,701,000
Hospira, Inc. (a) 100,000 4,097,000
Medtronic, Inc. 214,300 11,490,766
Thermo Electron Corp. (a) 145,000 4,480,500
Zimmer Holdings, Inc. (a) 50,000 3,444,500
Health Care Equipment & Supplies Total 28,825,266
-----------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES - 4.9%
Cardinal Health, Inc. 110,000 6,978,400
Coventry Health Care, Inc. (a) 85,000 7,311,700
Humana, Inc. (a) 200,000 9,576,000
IMS Health, Inc. 143,100 3,601,827
LifePoint Hospitals, Inc. (a) 50,000 2,186,500
Medco Health Solutions, Inc. (a) 60,000 3,289,800
Patterson Companies, Inc. (a) 80,000 3,202,400
Tenet Healthcare Corp. (a) 150,000 1,684,500
Health Care Providers & Services Total 37,831,127
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
10
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
PHARMACEUTICALS - 5.3% Bristol-Myers Squibb Co. 109,539 2,635,508
Gedeon Richter Ltd. 11,000 1,981,129
Johnson & Johnson 181,670 11,496,078
Novartis AG, ADR 217,993 11,117,643
Pfizer, Inc. 375,000 9,363,750
Schering-Plough Corp. 150,000 3,157,500
Valeant Pharmaceuticals International 60,000 1,204,800
Pharmaceuticals Total 40,956,408
------------
HEALTH CARE TOTAL 123,722,351
INDUSTRIALS - 7.3%
- ------------------------------------------ -----------------------------------------------------------------------------
AEROSPACE & DEFENSE - 0.7% United Technologies Corp. 99,640 5,165,338
Aerospace & Defense Total 5,165,338
-----------------------------------------------------------------------------
AIR FREIGHT & LOGISTICS - 1.4% United Parcel Service, Inc., Class B 130,000 8,986,900
Yamato Transport Co., Ltd. 100,000 1,651,380
Air Freight & Logistics Total 10,638,280
-----------------------------------------------------------------------------
AIRLINES - 0.5% Alaska Air Group, Inc. (a) 50,200 1,458,812
Southwest Airlines Co. 175,000 2,598,750
Airlines Total 4,057,562
-----------------------------------------------------------------------------
BUILDING PRODUCTS - 0.3% Assa Abloy AB 175,000 2,472,083
Building Products Total 2,472,083
-----------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES - 0.3% Waste Management, Inc. 75,237 2,152,531
Commercial Services & Supplies Total 2,152,531
-----------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES - 2.4% 3M Co. 30,000 2,200,800
General Electric Co. 310,000 10,437,700
Siemens AG, ADR 75,000 5,799,750
Industrial Conglomerates Total 18,438,250
-----------------------------------------------------------------------------
MACHINERY - 0.8% Deere & Co. 75,000 4,590,000
Eaton Corp. 20,000 1,271,000
Illinois Tool Works, Inc. 10,000 823,300
Machinery Total 6,684,300
-----------------------------------------------------------------------------
MARINE - 0.9% A.P. Moller - Maersk A/S 500 5,108,057
Finnlines Oyj 90,000 1,581,444
Marine Total 6,689,501
------------
INDUSTRIALS TOTAL 56,297,845
INFORMATION TECHNOLOGY - 16.2%
- ------------------------------------------ -----------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 2.9% Avaya, Inc. (a) 260,000 2,678,000
Cisco Systems, Inc. (a) 409,700 7,345,921
Corning, Inc. (a) 200,000 3,866,000
Nokia Oyj, ADR 190,000 3,212,900
Plantronics, Inc. 60,000 1,848,600
Tandberg ASA 250,000 3,350,033
Communications Equipment Total 22,301,454
See Accompanying Notes to Financial Statements.
11
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY- (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 2.4% Apple Computer, Inc. (a) 30,000 1,608,300
Dell, Inc. (a) 180,000 6,156,000
Hewlett-Packard Co. 100,000 2,920,000
International Business Machines Corp. 44,062 3,534,654
NCR Corp. (a) 60,000 1,914,600
Synaptics, Inc. (a) 135,000 2,538,000
Computers & Peripherals Total 18,671,554
-----------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.6% Murata Manufacturing Co., Ltd. 60,000 3,364,022
Symbol Technologies, Inc. 80,000 774,400
Electronic Equipment & Instruments Total 4,138,422
-----------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES - 0.7% Google, Inc., Class A (a) 5,000 1,582,300
Yahoo!, Inc. (a) 120,000 4,060,800
Internet Software & Services Total 5,643,100
-----------------------------------------------------------------------------
IT SERVICES - 1.8% Accenture Ltd., Class A 80,000 2,036,800
First Data Corp. 100,000 4,000,000
Infosys Technologies Ltd., ADR 45,000 3,342,600
Paychex, Inc. 128,000 4,746,240
IT Services Total 14,125,640
-----------------------------------------------------------------------------
OFFICE ELECTRONICS - 0.3% Zebra Technologies Corp., Class A (a) 65,000 2,540,850
Office Electronics Total 2,540,850
-----------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.3% Altera Corp. (a) 145,000 2,770,950
Analog Devices, Inc. 117,500 4,363,950
Applied Materials, Inc. 100,000 1,696,000
Intel Corp. 290,000 7,148,500
Marvell Technology Group Ltd. (a) 108,300 4,993,713
Samsung Electronics Co., Ltd., GDR (b) 34,000 9,673,000
Xilinx, Inc. 75,000 2,088,750
Semiconductors & Semiconductor Equipment Total 32,734,863
-----------------------------------------------------------------------------
SOFTWARE - 3.2% Adobe Systems, Inc. (a) 75,000 2,238,750
Electronic Arts, Inc. (a) 70,000 3,982,300
Microsoft Corp. 566,239 14,569,329
Oracle Corp. (a) 100,000 1,239,000
SAP AG, ADR 35,000 1,516,550
Wind River Systems, Inc. (a) 50,000 646,500
Software Total 24,192,429
------------
INFORMATION TECHNOLOGY TOTAL 124,348,312
MATERIALS - 4.7%
- ------------------------------------------ -----------------------------------------------------------------------------
CHEMICALS - 1.1% E.I. du Pont de Nemours & Co. 60,000 2,350,200
Monsanto Co. 40,000 2,510,000
Potash Corp. of Saskatchewan, Inc. 37,000 3,452,840
Chemicals Total 8,313,040
-----------------------------------------------------------------------------
CONSTRUCTION MATERIALS - 0.4% Vulcan Materials Co. 40,000 2,968,400
Construction Materials Total 2,968,400
See Accompanying Notes to Financial Statements.
12
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
COMMON STOCKS - (CONTINUED)
MATERIALS - (CONTINUED)
SHARES VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
METALS & MINING - 1.9% Alcoa, Inc. 125,000 3,052,500
Mittal Steel Co. NV, Class A (a) 100,000 2,880,000
Newmont Mining Corp. 92,500 4,363,225
Phelps Dodge Corp. 32,000 4,157,760
Placer Dome, Inc. 35,000 600,250
Metals & Mining Total 15,053,735
-----------------------------------------------------------------------------
PAPER & FOREST PRODUCTS - 1.3% Potlatch Corp. 106,800 5,566,416
Votorantim Celulose e Papel SA, ADR 210,000 2,814,000
Weyerhaeuser Co. 25,000 1,718,750
Paper & Forest Products Total 10,099,166
------------
MATERIALS TOTAL 36,434,341
TELECOMMUNICATION SERVICES - 1.8%
- ------------------------------------------ -----------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.4% BellSouth Corp. 107,676 2,831,879
CenturyTel, Inc. 100,000 3,498,000
SBC Communications, Inc. 100,000 2,397,000
PT Telekomunikasi Indonesia, ADR 110,000 2,289,100
Diversified Telecommunication Services Total 11,015,979
-----------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES - 0.4% Vodafone Group PLC, ADR 105,000 2,726,850
Wireless Telecommunication Services Total 2,726,850
------------
TELECOMMUNICATION SERVICES TOTAL 13,742,829
UTILITIES - 2.2%
- ------------------------------------------ -----------------------------------------------------------------------------
ELECTRIC UTILITIES - 0.7% Entergy Corp. 44,000 3,270,080
Exelon Corp. 35,000 1,870,400
Electric Utilities Total 5,140,480
-----------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS
& ENERGY TRADERS - 0.6% Constellation Energy Group, Inc. 75,000 4,620,000
Independent Power Producers & Energy Traders Total 4,620,000
-----------------------------------------------------------------------------
MULTI-UTILITIES - 0.9% Dominion Resources, Inc. 65,000 5,599,100
PG&E Corp. 41,078 1,612,311
Multi-Utilities Total 7,211,411
------------
UTILITIES TOTAL 16,971,891
TOTAL COMMON STOCKS
(COST OF $605,167,747) 732,821,671
See Accompanying Notes to Financial Statements.
13
COLUMBIA YOUNG INVESTOR FUND
SHORT-TERM OBLIGATION - 4.2%
PAR ($) VALUE ($)
- ------------------------------------------ -----------------------------------------------------------------------------
Repurchase agreement with State Street Bank & Trust Co.,
dated 09/30/05, due 10/03/05 at 3.150%, collateralized
by U.S. Treasury Notes with various maturities to
06/15/09, market value of $33,073,606 (repurchase
proceeds $32,430,511) 32,422,000 32,422,000
TOTAL SHORT-TERM OBLIGATION
(COST OF $32,422,000) 32,422,000
TOTAL INVESTMENTS - 99.6%
(COST OF $637,589,747) (C) 765,243,671
OTHER ASSETS & LIABILITIES, NET - 0.4% 3,206,059
NET ASSETS - 100.0% 768,449,730
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. This security may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At September
30, 2005, the value of this security, which is not illiquid, represents
1.3% of net assets.
(c) Cost for federal income tax purposes is $638,300,120.
The Fund invested in the following countries at September 30, 2005:
SUMMARY OF SECURITIES BY COUNTRY (UNAUDITED) VALUE % OF TOTAL INVESTMENTS
-------------------------------------------- ----- ----------------------
United States* $624,162,930 81.6%
Japan (28,923,828) (3.8)
Netherlands (21,679,522) (2.8)
Switzerland (19,030,201) (2.5)
United Kingdom (14,539,000) (1.9)
South Korea (9,673,000) (1.3)
Finland (8,104,279) (1.0)
Germany (7,316,300) (0.9)
India (6,167,600) (0.8)
Norway (5,911,270) (0.8)
Denmark (5,108,057) (0.7)
Canada (4,053,090) (0.5)
Brazil (2,814,000) (0.4)
Sweden (2,472,083) (0.3)
Indonesia (2,289,100) (0.3)
Hungary (1,981,129) (0.3)
Mexico (1,018,282) (0.1)
------------ ------
$765,243,671 100.0%
============ ======
*Includes short-term obligation.
Certain securities are listed by country of underlying exposure but may
trade predominantly on other exchanges.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
GDR Global Depositary Receipt
See Accompanying Notes to Financial Statements.
14
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
ASSETS Investments, at cost 637,589,747
------------
Investments, at value 765,243,671
Cash 719
Receivable for:
Investments sold 12,272,650
Fund shares sold 37,696
Interest 2,837
Dividends 528,132
Foreign tax reclaims 3,037
Expense reimbursement due from Investment Advisor 106,118
Deferred Trustees' compensation plan 26,209
------------
Total Assets 778,221,069
-----------------------------------------------------------------------------
LIABILITIES Payable for:
Investments purchased 8,183,501
Fund shares repurchased 407,963
Investment advisory fee 366,942
Administration fee 114,913
Transfer agent fee 413,275
Pricing and bookkeeping fees 16,136
Trustees' fees 2,494
Custody fee 632
Reports to shareholders 169,997
Distribution and service fees 30,391
Chief compliance officer expenses and fees 1,789
Deferred Trustees' fees 26,209
Other liabilities 37,097
------------
Total Liabilities 9,771,339
NET ASSETS 768,449,730
-----------------------------------------------------------------------------
COMPOSITION OF NET ASSETS Paid-in capital 760,242,041
Undistributed net investment income 2,066,681
Accumulated net realized loss (121,506,604)
Net unrealized appreciation (depreciation) on:
Investments 127,653,924
Foreign currency translations (6,312)
NET ASSETS 768,449,730
-----------------------------------------------------------------------------
CLASS A Net assets 90,537,894
Shares outstanding 6,853,093
Net asset value per share 13.21(a)
Maximum offering price per share ($13.21/0.9425) 14.02(b)
-----------------------------------------------------------------------------
CLASS B Net assets 5,693,168
Shares outstanding 438,576
Net asset value and offering price per share 12.98(a)
-----------------------------------------------------------------------------
CLASS C Net assets 832,787
Shares outstanding 64,129
Net asset value and offering price per share 12.99(a)
-----------------------------------------------------------------------------
CLASS Z Net assets 671,385,881
Shares outstanding 58,268,302
Net asset value, offering and redemption price per share 11.52
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See Accompanying Notes to Financial Statements.
15
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
($)
- ------------------------------------------ -----------------------------------------------------------------------------
INVESTMENT INCOME Dividends 12,896,598
Interest 634,197
-----------
Total Investment Income (net of foreign taxes withheld
of $66,768) 13,530,795
-----------------------------------------------------------------------------
EXPENSES Investment advisory fee 4,572,029
Administration fee 1,429,281
Distribution fee:
Class A 93,573
Class B 44,651
Class C 5,956
Service fee:
Class A 233,933
Class B 14,884
Class C 1,984
Transfer agent fee:
Class A 659,789
Class B 41,977
Class C 5,601
Class Z 4,836,520
Pricing and bookkeeping fees 209,814
Trustees' fees 26,136
Custody fee 57,315
Chief compliance officer expenses and fees (See Note 4) 7,563
Non-recurring costs (See Note 9) 12,548
Other expenses 535,049
-----------
Total Expenses 12,788,603
Fees and expenses waived or
reimbursed by Investment
Advisor/Transfer Agent:
Class A (538,014)
Class B (31,229)
Class C (4,218)
Class Z (3,266,059)
Fees waived by Distributor-Class A (46,787)
Non-recurring costs assumed by Investment Advisor (See Note 9) (12,548)
Custody earnings credit (3,725)
-----------
Net Expenses 8,886,023
-----------
Net Investment Income 4,644,772
-----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
ON INVESTMENTS AND FOREIGN CURRENCY Investments 62,838,956
Foreign currency transactions (27,606)
-----------
Net realized gain 62,811,350
Net change in unrealized appreciation (depreciation) on:
Investments 35,066,802
Foreign currency translations (6,312)
-----------
Net change in unrealized appreciation (depreciation) 35,060,490
-----------
Net Gain 97,871,840
-----------
Net Increase in Net Assets from Operations 102,516,612
See Accompanying Notes to Financial Statements.
16
STATEMENT OF CHANGES IN NET ASSETS
COLUMBIA YOUNG INVESTOR FUND
YEAR ENDED SEPTEMBER 30,
--------------------------
INCREASE (DECREASE) IN NET ASSETS 2005 ($) 2004 ($)
- ------------------------------------------ -----------------------------------------------------------------------------
OPERATIONS Net investment income 4,644,772 1,142,785
Net realized gain on investments and
foreign currency transactions 62,811,350 79,300,117
Net change in unrealized appreciation (depreciation)
on investments and foreign currency translations 35,060,490 7,949,049
--------------------------
Net Increase from Operations 102,516,612 88,391,951
-----------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income:
Class A (453,783) --
Class Z (3,568,318) --
--------------------------
Total Distributions Declared to Shareholders (4,022,101) --
-----------------------------------------------------------------------------
SHARE TRANSACTIONS Class A:
Subscriptions 4,038,449 5,875,316
Distributions reinvested 441,584 --
Redemptions (19,906,944) (16,955,769)
--------------------------
Net Decrease (15,426,911) (11,080,453)
Class B:
Subscriptions 438,856 628,365
Redemptions (1,552,256) (2,147,700)
--------------------------
Net Decrease (1,113,400) (1,519,335)
Class C:
Subscriptions 133,149 182,250
Redemptions (197,407) (113,350)
--------------------------
Net Increase (Decrease) (64,258) 68,900
Class Z:
Subscriptions 31,843,303 42,087,456
Distributions reinvested 3,530,424 --
Redemptions (128,226,734) (115,275,588)
--------------------------
Net Decrease (92,853,007) (73,188,132)
Net Decrease from Share Transactions (109,457,576) (85,719,020)
--------------------------
Total Increase (Decrease) in Net Assets (10,963,065) 2,672,931
-----------------------------------------------------------------------------
NET ASSETS Beginning of period 779,412,795 776,739,864
End of period 768,449,730 779,412,795
--------------------------
Undistributed net investment income at end of period 2,066,681 1,488,435
-----------------------------------------------------------------------------
See Accompanying Notes to Financial Statements.
17
COLUMBIA YOUNG INVESTOR FUND
YEAR ENDED SEPTEMBER 30,
--------------------------
2005 2004
- ------------------------------------------ -----------------------------------------------------------------------------
CHANGES IN SHARES Class A:
Subscriptions 322,640 506,593
Issued for distributions reinvested 35,019 --
Redemptions (1,586,522) (1,458,671)
--------------------------
Net Decrease (1,228,863) (952,078)
Class B:
Subscriptions 35,535 54,732
Redemptions (125,656) (187,544)
--------------------------
Net Decrease (90,121) (132,812)
Class C:
Subscriptions 10,871 15,881
Redemptions (16,117) (10,012)
--------------------------
Net Increase (Decrease) (5,246) 5,869
Class Z:
Subscriptions 2,921,164 4,164,659
Issued for distributions reinvested 321,849 --
Redemptions (11,690,078) (11,357,922)
--------------------------
Net Decrease (8,447,065) (7,193,263)
See Accompanying Notes to Financial Statements.
18
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
NOTE 1. ORGANIZATION
Columbia Young Investor Fund (the "Fund"), a series of Columbia Fund Trust XI
(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 GOALS
The Fund seeks long-term growth. The Fund also has an educational objective to
teach children and teenagers about mutual funds, basic economic principles and
personal finance through a variety of educational materials and the materials
are paid for by the Fund.
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 twelve months on an original purchase of $1 million to $50
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.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sales price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 2:00 p.m. Eastern (U.S.) time. Events affecting the
values of such foreign securities and such exchange rates may occur between the
times at which they are determined and the close of the customary trading
session of the NYSE, which would not be reflected in the computation of the
Fund's net asset value. If events materially affecting the values of such
foreign securities occur and it is determined that the market quotations are not
reliable, then these foreign securities will be valued at their fair value using
procedures approved by the Board of Trustees. The Fund may use a systematic fair
valuation model provided by an independent third party to value securities
principally traded in foreign markets in order to adjust for possible stale
pricing that may occur between the close of the foreign exchanges and the time
for valuation. 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.
19
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
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 the ex-date, except for certain foreign securities which
are recorded as soon after ex-date as the Fund becomes aware of such, net of
non-reclaimable tax withholdings. Awards from class action litigation are
recorded as a reduction of cost if the Fund still owns the applicable securities
on payment date. If the Fund no longer owns the applicable securities, the
proceeds are recorded as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses) on
investments.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, such that the Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
20
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
For the year ended September 30, 2005, permanent book and tax basis differences
resulting primarily from differing treatments for REIT dividends and
non-deductible excise taxes paid 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
- --------------------------------------------------------------------------------
$ (44,425) $ 58,134 $ (13,709)
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 year ended September 30, 2005
was as follows:
SEPTEMBER 30, 2005
- --------------------------------------------------------------------------------
DISTRIBUTIONS PAID FROM:
- --------------------------------------------------------------------------------
ORDINARY INCOME* $ 4,022,101
- --------------------------------------------------------------------------------
LONG-TERM CAPITAL GAINS --
- --------------------------------------------------------------------------------
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of September 30, 2005, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED
UNDISTRIBUTED LONG-TERM NET UNREALIZED
ORDINARY INCOME CAPITAL GAINS APPRECIATION*
- --------------------------------------------------------------------------------
$ 2,088,388 $ -- $ 126,943,551
* The differences between book-basis and tax-basis net unrealized
appreciation/depreciation are primarily due to deferral of losses from wash
sales, capital loss carryovers and non-deductible deferred trustees fees.
Unrealized appreciation and depreciation at September 30, 2005, based on cost of
investments for federal income tax purposes was:
UNREALIZED APPRECIATION $ 139,145,781
UNREALIZED DEPRECIATION (12,202,230)
- --------------------------------------------------------------------------------
NET UNREALIZED APPRECIATION $ 126,943,551
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
- --------------------------------------------------------------------------------
2007 $ 219,451
- --------------------------------------------------------------------------------
2008 273,885
- --------------------------------------------------------------------------------
2009 20,667,592
- --------------------------------------------------------------------------------
2011 99,635,305
- --------------------------------------------------------------------------------
TOTAL $120,796,233
- --------------------------------------------------------------------------------
Of these carryforwards, $17,368,600 (expiring 09/30/09) and $3,792,328 ($219,451
expiring 09/30/07, $273,885 expiring 09/30/08 and $3,298,992 expiring 09/30/09)
remain from the Fund's merger with Liberty Young Investor Fund and Liberty
Growth Investor Fund, respectively.
Utilization of Liberty Young Investor Fund's and Liberty Growth Investor Fund's
losses could be subject to limitations imposed by the Internal Revenue Code.
Capital loss carryforwards of $63,616,647 were utilized during the year ended
September 30, 2005. Any capital loss carryforwards acquired as part of a merger
that are permanently lost due to provisions of the Internal Revenue Code are
included as being expired. Expired capital loss carryforwards are recorded as a
reduction of paid-in capital.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, LLC ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund. On September 30, 2005, Columbia Management Advisors, Inc. changed its
name 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 0.60%
- --------------------------------------------------------------------------------
$500 MILLION TO $1 BILLION 0.55%
- --------------------------------------------------------------------------------
OVER $1 BILLION 0.50%
For the year ended September 30, 2005, the Fund's effective investment advisory
fee rate was 0.58%.
21
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
ADMINISTRATION FEE
Columbia provides administrative and other services to the Fund for a monthly
administration 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 0.200%
- --------------------------------------------------------------------------------
$500 MILLION TO $1 BILLION 0.150%
- --------------------------------------------------------------------------------
OVER $1 BILLION 0.125%
- --------------------------------------------------------------------------------
For the year ended September 30, 2005, the Fund's effective administration fee
rate was 0.18%.
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
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual 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 September 30, 2005, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.027%.
TRANSFER AGENT FEE
Columbia Management Services, Inc. (the "Transfer Agent"), an affiliate of
Columbia and a wholly-owned subsidiary of BOA, provides shareholder services to
the Fund. The Transfer Agent has contracted with Boston Financial Data Services
("BFDS") to serve as sub-transfer agent. On August 22, 2005, Columbia Funds
Services, Inc. was renamed Columbia Management Services, Inc. For its services,
the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00
per open account per class. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
Effective November 1, 2004, Columbia has voluntarily agreed to reimburse the
Fund for a portion of transfer agency fees so that transfer agent fees
(exclusive of out-of-pocket expenses) will not exceed 0.10% annually for the
Fund. Columbia, at its discretion, may revise or discontinue this arrangement
any time. Prior to November 1, 2004, Columbia voluntarily agreed to reimburse a
portion of transfer agency fees so that transfer agent fees (exclusive of
out-of-pocket expenses) would not exceed 0.10% annually for Class A, Class B and
Class C shares only.
In addition, for the period from September 1, 2005 through October 31, 2005, the
Transfer Agent has voluntarily agreed to waive a portion of its fees to reflect
reduced contractual fees that will be charged to the Fund effective November 1,
2005.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of
Columbia, is the principal underwriter of the Fund. On August 22, 2005, Columbia
Funds Distributor, Inc. changed its name to Columbia Management Distributors,
Inc. For the year ended September 30, 2005, the Distributor has retained net
underwriting discounts of $5,546 on sales of the Fund's Class A shares and net
CDSC fees of $7,170, $10,046 and $1,307 on Class A, Class B and Class C share
redemptions, respectively.
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 attributable to Class A, Class B and Class C shares.
The Plan also requires the payment of a monthly distribution fee to the
Distributor equal to 0.10% annually of the average daily net assets attributable
to Class A shares and 0.75% annually of the average daily net assets
attributable to Class B and Class C shares. The Distributor has voluntarily
agreed to waive a portion of the Class A share distribution fee so that it will
not exceed 0.05% annually.
The CDSC and the distribution 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.
22
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. 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 September 30, 2005, the Fund paid $2,316 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 September 30, 2005, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $599,702,188 and
$734,625,306, respectively.
NOTE 6. OTHER
During the year ended September 30, 2005, the Fund purchased shares of the
iShares Russell 1000 Value Index Fund in violation of investment restrictions.
This position was subsequently sold at a gain of $31,070.
NOTE 7. SHARES OF BENEFICIAL INTEREST
As of September 30, 2005, the Fund had a shareholder that held 5.81% of the
shares outstanding. Subscription and redemption activity of this shareholder may
have a material effect on the Fund.
NOTE 8. 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 September 30, 2005, the Fund did not borrow under this
arrangement.
NOTE 9. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to collectively
as the "Settlements". The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle which Columbia Group
entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control
23
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
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 Funds' 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 Funds 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 alleged 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 Funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs alleged 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. Plaintiffs
filed a notice of voluntary dismissal of the lawsuit as to all defendants and
all claims, without prejudice, which was so-ordered by the judge on or about
November 9, 2005.
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.
24
SEPTEMBER 30, 2005
COLUMBIA YOUNG INVESTOR FUND
The Funds and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings (with
the exception of the January 11, 2005 "failure to participate" litigation, which
has been dismissed) are ongoing, however, based on currently available
information, Columbia believes that these lawsuits are without merit, that the
likelihood they will have a material adverse impact on any fund is remote, and
that the lawsuits are not likely to materially affect its ability to provide
investment management services to its clients, including the Funds.
For the year ended September 30, 2005, Columbia has assumed $12,548 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
25
FINANCIAL HIGHLIGHTS
COLUMBIA YOUNG INVESTOR FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD
YEAR ENDED SEPTEMBER 30, ENDED
-------------------------------------- SEPTEMBER 30,
CLASS A SHARES 2005 2004 2003 2002 (a)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.68 $ 10.47 $ 8.52 $ 8.94
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (b) 0.05(c) 0.03 (0.03) (0.01)
Net realized and unrealized gain (loss) on investments and
foreign currency 1.54 1.18 1.98 (0.41)
--------- --------- --------- ---------
Total from Investment Operations 1.59 1.21 1.95 (0.42)
- -----------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.06) -- -- --
--------- -------- --------- --------
Total Distributions Declared to Shareholders (0.06) -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.21 $ 11.68 $ 10.47 $ 8.52
Total return (d)(e) 13.62% 11.56% 22.89% (4.70)%(f)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 1.35% 1.33% 1.54% 1.67%(h)
Net investment income (loss) (g) 0.38% 0.26% (0.35)% (0.49)%(h)
Waiver/reimbursement 0.63% 1.10% 0.56% 0.80%(h)
Portfolio turnover rate 79% 58% 128% 32%
Net assets, end of period (000's) $ 90,538 $ 94,386 $ 94,617 $ 82,564
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Class A shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(d) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(e) Had the Investment Advisor/Transfer Agent and/or Distributor not waived or
reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
26
COLUMBIA YOUNG INVESTOR FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD
YEAR ENDED SEPTEMBER 30, ENDED
-------------------------------------- SEPTEMBER 30,
CLASS B SHARES 2005 2004 2003 2002 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.50 $ 10.39 $ 8.51 $ 8.94
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.03)(c) (0.05) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments and
foreign currency 1.51 1.16 1.98 (0.41)
--------- -------- --------- --------
Total from Investment Operations 1.48 1.11 1.88 (0.43)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.98 $ 11.50 $ 10.39 $ 8.51
Total return (d)(e) 12.87% 10.68% 22.09% (4.81)%(f)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 2.05% 2.03% 2.24% 2.37%(h)
Net investment loss (g) (0.32)% (0.44)% (1.05)% (1.19)%(h)
Waiver/reimbursement 0.53% 0.46% 0.51% 0.75%(h)
Portfolio turnover rate 79% 58% 128% 32%
Net assets, end of period (000's) $ 5,693 $ 6,082 $ 6,872 $ 6,505
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Class B shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Had the Investment Advisor/Transfer Agent not waived or reimbursed a
portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
27
COLUMBIA YOUNG INVESTOR FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
PERIOD
YEAR ENDED SEPTEMBER 30, ENDED
------------------------------------- SEPTEMBER 30,
CLASS C SHARES 2005 2004 2003 2002 (a)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.51 $ 10.39 $ 8.51 $ 8.94
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (b) (0.03)(c) (0.05) (0.10) (0.02)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.51 1.17 1.98 (0.41)
--------- -------- -------- --------
Total from Investment Operations 1.48 1.12 1.88 (0.43)
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.99 $ 11.51 $ 10.39 $ 8.51
Total return (d)(e) 12.86% 10.78% 22.09% (4.81)%(f)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (g) 2.05% 2.03% 2.24% 2.37%(h)
Net investment loss (g) (0.32)% (0.43)% (1.05)% (1.19)%(h)
Waiver/reimbursement 0.53% 0.71% 0.50% 0.75%(h)
Portfolio turnover rate 79% 58% 128% 32%
Net assets, end of period (000's) $ 833 $ 798 $ 660 $ 488
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Class C shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(d) Total return at net asset value assuming no contingent deferred sales
charge.
(e) Had the Investment Advisor/Transfer Agent not waived or reimbursed a
portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h) Annualized.
28
COLUMBIA YOUNG INVESTOR FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED SEPTEMBER 30,
----------------------------------------------------------------------
CLASS Z SHARES 2005 2004 2003 (a) 2002 (a)(b) 2001 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.16 $ 9.13 $ 7.42 $ 9.38 $ 17.97
- ------------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (c) 0.07(d) 0.01 (0.03) (0.07)(e) (0.06)(e)
Net realized and unrealized gain (loss) on investments
and foreign currency 1.34 1.02 1.74 (1.89) (6.52)
-------- -------- -------- -------- ---------
Total from Investment Operations 1.41 1.03 1.71 (1.96) (6.58)
- ------------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.05) -- -- -- --
From net realized gains -- -- -- -- (1.56)
In excess of net realized gains -- -- -- -- (0.45)
-------- -------- -------- -------- ---------
Total Distributions Declared to Shareholders (0.05) -- -- -- (2.01)
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.52 $ 10.16 $ 9.13 $ 7.42 $ 9.38
Total return (f) 13.95%(g) 11.28% 23.05% (20.90)% (40.08)%
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.09% 1.46% 1.49% 1.58%(e) 1.26%(e)
Net investment income (loss) (h) 0.63% 0.13% (0.30)% (0.71)%(e) (0.41)%(e)
Waiver/reimbursement 0.48% -- -- -- --
Portfolio turnover rate 79% 58% 128% 32% 23% (i)
Net assets, end of period (000's) $671,386 $678,146 $674,590 $573,111 $746,698
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Per share data has been restated to reflect a 2-for-1 share split effective
July 25, 2003.
(b) Class S shares were redesignated Class Z shares on July 29, 2002.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(e) Per share data and ratios reflect income and expenses inclusive of the
Fund's proportionate share of the income and expenses of the SR&F Growth
Investor Portfolio prior to the termination of the master feeder/fund
structure on July 26, 2002.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor/Transfer Agent not waived or reimbursed a
portion of expenses, total return would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Portfolio turnover disclosed is for the SR&F Growth Investor Portfolio.
29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
COLUMBIA YOUNG INVESTOR FUND
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI
AND THE SHAREHOLDERS OF COLUMBIA YOUNG INVESTOR 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 Young Investor Fund (the
"Fund") (a series of Columbia Funds Trust XI) at September 30, 2005, the results
of its operations, the changes in its net assets, and its financial highlights
for the periods indicated, in conformity with accounting principles generally
accepted 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). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at September 30, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 21, 2005
30
TRUSTEES
COLUMBIA YOUNG INVESTOR 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,
YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
OR APPOINTED TO OFFICE(1) 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, 2002 (formerly
P.O. Box 66100 President of UAL Loyalty Services (airline) from September, 2001 to December, 2002; Executive
Chicago, IL 60666 Vice President and Chief Financial Officer of United Airlines from July, 1999 to September, 2001;
Trustee (since 1996) Senior Vice President-Finance from March, 1993 to July, 1999). Oversees 86, Nash Finch Company
(food distributor)
---------------------------------------------------------------------------------------------------
JANET LANGFORD KELLY (Age 47) Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) since March, 2005; Adjunct Professor
9534 W. Gull Lake Drive Senior of Law, Northwestern University, since September, 2004 (formerly Chief Administrative
Richland, MI 49083-8530 Officer and Vice President, Kmart Holding Corporation (consumer goods) from September, 2003 to
Trustee (since 1996) 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 86, None
---------------------------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood
10701 Charleston Drive Corporation (building products manufacturer)). Oversees 89(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 Louisa Van Voorhis
Department of Economics Professor of Political Economy, University of Washington, since September, 1993 (formerly Director,
University of Washington Institute for Economic Research, University of Washington from September, 2001 to June, 2003);
Seattle, WA 98195 Adjunct Professor of Statistics, University of Washington, since September, 1980; Associate Editor,
Trustee (since 1981) Journal of Money Credit and Banking, since September, 1993; consultant on
econometric and statistical matters. Oversees 86, None
---------------------------------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 63) Academic Vice President and Dean of Faculties since August, 1999, Boston College (formerly Dean,
84 College Road Boston College School of Management from September, 1977 to August, 1999). Oversees 89(3),
Chestnut Hill, MA 02467-3838 Saucony, Inc. (athletic footwear)
Trustee (since 1985)
---------------------------------------------------------------------------------------------------
31
COLUMBIA YOUNG INVESTOR FUND
NAME, ADDRESS AND AGE,
POSITION WITH FUNDS,
YEAR FIRST ELECTED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN COLUMBIA
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 86, 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, College of
2208 Tawny Woods Place Business, Boise State University); Chartered Financial Analyst. Oversees 86, None
Boise, ID 83706
Trustee (since 1998)
---------------------------------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 68) Partner and Senior Advisor, Chicago Growth Partners (private equity investing) since September,
8 Sound Shore Drive, 2004 (formerly Managing Director, William Blair Capital Partners (private equity investing) from
Suite 285 September, 1994 to September, 2004). Oversees 86, Anixter International (network support
Greenwich, CT 06830 equipment distributor); Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real
Trustee and Chairman estate management services) and Ambac Financial Group (financial guaranty insurance)
of the Board(4) (since 1996)
---------------------------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 60) Retired since 1997 (formerly General Manager, Global Education Industry, IBM Corporation
359 Stickney Hill Road (computer and technology) from 1994 to 1997). Oversees 86, Chairman of the Board of Directors,
Hopkinton, NH 03229 Enesco Group, Inc. (designer, importer and distributor of giftware and collectibles)
Trustee (since 1998)
---------------------------------------------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 64) Retired since December, 2003 (formerly Chairman and Chief Executive Officer, The Regence Group
100 S.W. Market Street #1500 (regional health insurer); Chairman and Chief Executive Officer, BlueCross BlueShield of Oregon;
Portland, OR 97207 Certified Public Accountant, Arthur Young & Company). Oversees 86, Northwest Natural Gas Co.
Trustee (since 1991) (natural gas service provider)
---------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE
WILLIAM E. MAYER(2) (Age 65) Partner, Park Avenue Equity Partners (private equity) since February, 1999 (formerly Partner,
399 Park Avenue Development Capital LLC from November 1996, to February, 1999). Oversees 89(3), Lee Enterprises
Suite 3204 (print media), WR Hambrecht + Co. (financial service provider); Reader's Digest (publishing);
New York, NY 10022 OPENFIELD Solutions (retail industry technology provider)
Trustee (since 1994)
---------------------------------------------------------------------------------------------------
(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 3 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.
32
OFFICERS
COLUMBIA YOUNG INVESTOR 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 Managing Director of the Advisor since September, 2005;
One Financial Center President of the Columbia Funds, Liberty Funds and Stein Roe Funds since October, 2004; President
Boston, MA 02111 and Chief Executive Officer of the Nations Funds since January, 2005; President of the Galaxy Funds
President (since 2004) 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; Director of FIM
Funding, Inc. since January, 2005; Senior Vice President of Columbia Management Distributors, Inc.
since January, 2005; Director of Columbia Management Services, Inc. since January, 2005 (formerly
Senior Vice President of Columbia Management from January, 2005 to August, 2005; Senior Vice
President of BACAP Distributors LLC from January, 2005 to July, 2005; 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, Stein Roe Funds
One Financial Center and All-Star Funds since December, 2000; Managing Director of the Advisor since September, 2005
Boston, MA 02111 (formerly Vice President of Columbia Management from April, 2003 to August, 2005; President of
Treasurer (since 2000) the Columbia Funds, Liberty Funds 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 56) Senior Vice President and Chief Compliance Officer of the Columbia Funds, Liberty Funds, Stein Roe
100 Federal Street Funds and All-Star Funds since August, 2004; Chief Compliance Officer of the Columbia Management
Boston, MA 02110 Multi-Strategy Hedge Fund, LLC since August 2004; Chief Compliance Officer of the BACAP Alternative
Senior Vice President Multi-Strategy Hedge Fund LLC since October 2004 (formerly Partner, Carter, Ledyard & Milburn LLP
and Chief Compliance from January, 2001 to August, 2004; Counsel, Carter, Ledyard & Milburn LLP from November, 1999 to
Officer (since 2004) December, 2000; Vice President and 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 All-Star Funds
One Financial Center since October, 2004; Managing Director of the Advisor since September, 2005 (formerly Controller of
Boston, MA 02111 the Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star Funds from May, 2004 to October,
Chief Accounting Officer 2004; Assistant Treasurer from June, 2002 to May, 2004; Vice President, Product Strategy &
(since 2004) 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 Funds since October,
One Financial Center 2004 (formerly Vice President of CDC IXIS Asset Management Services, Inc. and Deputy Treasurer of
Boston, MA 02111 the CDC Nvest Funds and Loomis Sayles Funds from February, 2003 to September, 2004; Assistant Vice
Controller (since 2004) 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, 2004 (formerly
One Financial Center Of Counsel, Bingham McCutchen from April, 2001 to September, 2004; Executive Director and
Boston, MA 02111 General Counsel, Massachusetts Pension Reserves Investment Management Board from September,
Secretary (since 2004) 1997 to March, 2001
---------------------------------------------------------------------------------------------------
33
COLUMBIA FUNDS
COLUMBIA YOUNG INVESTOR FUND
----------------------------------------------------------------------------------------
GROWTH FUNDS Columbia Acorn Fund
Columbia Acorn Select
Columbia Acorn USA
Columbia Growth Stock Fund
Columbia Large Cap Growth Fund
Columbia Marsico 21st Century Fund
Columbia Marsico Focused Equities Fund
Columbia Marsico Growth Fund
Columbia Marsico Mid Cap Growth Fund
Columbia Mid Cap Growth Fund
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund II
Columbia Small Company Equity Fund
Columbia Tax-Managed Growth Fund
----------------------------------------------------------------------------------------
CORE FUNDS Columbia Common Stock Fund
Columbia Large Cap Core Fund
Columbia Small Cap Core Fund
Columbia Young Investor Fund
----------------------------------------------------------------------------------------
VALUE FUNDS Columbia Disciplined Value
Fund Columbia Dividend Income Fund
Columbia Large Cap Value Fund
Columbia Mid Cap Value Fund Columbia
Small Cap Value Fund I Columbia
Small Cap Value Fund II Columbia
Strategic Investor
----------------------------------------------------------------------------------------
ASSET ALLOCATION/HYBRID FUNDS Columbia Asset Allocation Fund
Columbia Asset Allocation Fund II
Columbia Balanced Fund
Columbia Liberty Fund
Columbia LifeGoalTM Balanced Growth Portfolio
Columbia LifeGoalTM Growth Portfolio
Columbia LifeGoalTM Income Portfolio
Columbia LifeGoalTM Income and Growth Portfolio
Columbia Thermostat Fund
----------------------------------------------------------------------------------------
INDEX FUNDS Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Index Fund
Columbia Mid Cap Index Fund
Columbia Small Cap Index Fund
----------------------------------------------------------------------------------------
SPECIALTY FUNDS Columbia Convertible Securities Fund
Columbia Real Estate Equity Fund
Columbia Technology Fund
Columbia Utilities Fund
----------------------------------------------------------------------------------------
GLOBAL/INTERNATIONAL FUNDS Columbia Acorn International
Columbia Acorn International Select
Columbia Global Value Fund
Columbia Greater China Fund
Columbia International Stock Fund
Columbia International Value Fund
Columbia Marsico International Opportunities Fund
Columbia Multi-Advisor International Equity Fund
Columbia World Equity Fund
----------------------------------------------------------------------------------------
TAXABLE BOND FUNDS Columbia Conservative High Yield Fund
Columbia Core Bond Fund
Columbia Federal Securities Fund
Columbia High Income Fund
Columbia High Yield Opportunity Fund
Columbia Income Fund
Columbia Intermediate Bond Fund
Columbia Intermediate Core Bond Fund
Columbia Short Term Bond Fund
Columbia Strategic Income Fund
Columbia Total Return Bond
Columbia U.S. Treasury Index Fund
34
COLUMBIA YOUNG INVESTOR FUND
----------------------------------------------------------------------------------------
TAX-EXEMPT BOND FUNDS Columbia California Tax-Exempt Fund
Columbia CA Intermediate Municipal Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia CT Intermediate Municipal Bond Fund
Columbia FL Intermediate Municipal Bond Fund
Columbia GA Intermediate Municipal Bond Fund
Columbia High Yield Municipal Fund
Columbia Intermediate Municipal Bond Fund
Columbia MA Intermediate Municipal Bond Fund
Columbia Massachusetts Tax-Exempt Fund
Columbia MD Intermediate Municipal Bond Fund
Columbia Municipal Income Fund
Columbia NC Intermediate Municipal Bond Fund
Columbia New York Tax-Exempt Fund
Columbia NJ Intermediate Municipal Bond Fund
Columbia NY Intermediate Municipal Bond Fund
Columbia OR Intermediate Municipal Bond Fund
Columbia RI Intermediate Municipal Bond Fund
Columbia SC Intermediate Municipal Bond Fund
Columbia Short Term Municipal Bond Fund
Columbia Tax-Exempt Fund
Columbia Tax-Exempt Insured Fund
Columbia TX Intermediate Municipal Bond Fund
Columbia VA Intermediate Municipal Bond Fund
----------------------------------------------------------------------------------------
MONEY MARKET FUNDS Columbia Cash Reserves
Columbia CA Tax-Exempt Reserves
Columbia Government Reserves
Columbia Government Plus Reserves
Columbia MA Municipal Reserves
Columbia Money Market Reserves
Columbia Municipal Reserves
Columbia NY Tax-Exempt Reserves
Columbia Prime Reserves
Columbia Tax-Exempt Reserves
Columbia Treasury Reserves
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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A., merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
35
IMPORTANT INFORMATION ABOUT THIS REPORT
COLUMBIA YOUNG INVESTOR 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 Young Investor 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 relating to its portfolio securities 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 SECwebsite. 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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A., merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
36
graphic: eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Young Investor Fund ANNUAL REPORT, SEPTEMBER 30, 2005
-------------
PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
-------------
Columbia Management(R)
(c) 2005 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/91122-0905 (11/05) 05/8541
COLUMBIA
EQUITY FUNDS
ANNUAL REPORT
SEPTEMBER 30, 2005
[PHOTO OF WOMAN HOLDING A PEN]
TABLE OF CONTENTS
ECONOMIC UPDATE .......................................................... 1
COLUMBIA ASSET ALLOCATION FUND ........................................... 2
COLUMBIA LARGE CAP GROWTH FUND ........................................... 6
COLUMBIA DISCIPLINED VALUE FUND .......................................... 10
COLUMBIA COMMON STOCK FUND ............................................... 14
COLUMBIA SMALL CAP CORE FUND ............................................. 18
COLUMBIA SMALL COMPANY EQUITY FUND ....................................... 22
FINANCIAL STATEMENTS ..................................................... 26
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM ........................................ 126
UNAUDITED INFORMATION .................................................... 127
TRUSTEES ................................................................. 128
OFFICERS ................................................................. 130
COLUMBIA FUNDS ........................................................... 131
IMPORTANT INFORMATION
ABOUT THIS REPORT ........................................................ 133
The views expressed in the President's message and Portfolio Managers' Report
reflects 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.
Not FDIC | May Lose Value
Insured | No Bank Guarantee
PRESIDENT'S MESSAGE ____________________________________________________________
COLUMBIA EQUITY FUNDS
DEAR SHAREHOLDER:
[Photo of 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 integrated various components of Nations Funds, Galaxy Funds and
Columbia Funds, resulting in a single fund family under the Columbia name 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. In addition to expanding the level of services
available to the funds, portfolio managers and shareholders, we have been able
to achieve significant cost savings for the funds by aggregating our business.
In September, we made major inroads in the initiative to streamline our product
offerings. This included merging several funds and renaming Nations Funds as
Columbia Funds, as well as consolidating the Nations and Columbia web sites.
Over the summer, we completed the service provider consolidation for shareholder
servicing. As we work to complete the remaining product and service provider
consolidations by the end of 2005, we remain committed to building a mutual fund
business that helps you meet, and hopefully exceed, your personal financial
goals. 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 continually earned and will
remain focused on producing results for you. We will continue to strive for the
highest standards of performance and service excellence.
All of these efforts have been undertaken to enable you, as a shareholder, to
benefit from the execution of a consolidated business plan. We believe a more
streamlined fund family with consistent performance and lower fees will provide
the best opportunity for investment growth. We also believe that providing more
robust services to you through multiple channels (Web, phones, voice response)
will be beneficial to 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 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 financial goals on target in the years to come.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
President, Columbia Funds
Head of Mutual Funds, Columbia Management
Christopher L. Wilson is Head of Mutual Funds for Columbia Management and
responsible for the day-to-day delivery of mutual fund services to the firm's
investors. Working closely with the Legal and Compliance teams, Chris oversees
all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. As President and CEO
of Columbia Funds (formerly Nations, Galaxy and Columbia Funds), Chris serves as
the primary interface to the Fund Boards. Chris joined Bank of America in 2004.
SUMMARY
FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2005
o DESPITE BOUTS OF VOLATILITY, THE BROAD STOCK MARKET GENERATED A
DOUBLE-DIGIT RETURN FOR THE PERIOD. THE S&P 500 INDEX RETURNED 12.25%. AS
THE ECONOMY EXPANDED, SMALL-CAP STOCKS OUTPERFORMED LARGE-CAP STOCKS, AS
MEASURED BY THE RUSSELL 2000(R) INDEX.
[UP ARROW] [UP ARROW]
S&P INDEX RUSSELL INDEX
12.25% 17.95%
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.
[UP ARROW] [UP ARROW]
LEHMAN INDEX MERRILL LYNCH INDEX
2.80% 6.69%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
2,000 smallest of the 3,000 largest US companies based on market capitalization.
The Lehman Brothers Aggregate Bond Index is an unmanaged market value-weighted
index that tracks the performance of fixed-rate, publicly placed,
dollar-denominated, and non-convertible investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
ECONOMIC UPDATE ________________________________________________________________
COLUMBIA EQUITY FUNDS
The US economy moved ahead at a healthy pace during the 12-month period that
began October 1, 2004, and ended September 30, 2005. Gross domestic product
(GDP) expanded at an annualized rate of 3.6% as job growth helped sustain
consumer spending and rising profits boosted business spending. Employment data
was solid, even in light of Hurricanes Katrina and Rita, which disrupted the
labor market near the end of the period. During the first 11 months of the
period, the economy added an average of 185,000 new jobs each month. In
September, 35,000 jobs were lost as a direct result of the Gulf Coast storms--a
figure that was actually considerably lower than expected. The job losses raised
the unemployment rate to 5.1%, up from a four-year low of 4.9%.
Energy prices weighed on economic growth as the period wore on. The first signs
of relief came in September as the price of crude oil retreated from a record
high of more than $69.81 a barrel. Signs of slower growth cropped up in retail
spending. And, consumer confidence readings dipped in July and fell sharply in
September. The decline was the largest in 25 years, according to the University
of Michigan's monthly survey.
Despite these setbacks, the latest data on the economy suggest that it has
retained momentum. Manufacturing activity remained strong, and business activity
in non-manufacturing industries continued to expand, although the pace slowed in
September.
DESPITE VOLATILITY, STOCKS MOVED AHEAD
The S&P 500 Index--a broad measure of large company stock market
performance--returned 12.25% for this reporting period. The double-digit gain
masked considerable volatility. Early in the period, stocks rallied after the
presidential election then again in response to positive economic news midway
through the period and in the aftermath of two hurricanes. These rallies,
however, alternated with declines linked to higher energy prices, rising
interest rates and weakening consumer confidence. Small- and mid-cap stocks
outperformed large-cap stocks. Value stocks led growth stocks except among small
caps, where growth gained a small advantage over value.
BONDS DELIVERED MODEST GAINS
The US bond market delivered positive but modest returns despite steadily rising
short-term interest rates and higher long-term rates in the final months of the
period. Interest rates and bond prices move in opposite directions. The Lehman
Brothers Aggregate Bond Index, a broad measure of the performance of
investment-grade bonds returned 2.80% for the 12-month period. The yield on the
10-year US Treasury note, a bellwether for the bond market, ended the period at
just over 4.3%--slightly higher than where it started the period. High-yield
bonds led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 6.69%.
SHORT-TERM INTEREST RATES MOVED HIGHER
The Federal Reserve Board (the Fed) raised the federal funds rate, a key
short-term rate, from 1.75% to 3.75% during the period. In the wake of Hurricane
Katrina, some market observers speculated that the Fed might curtail its rate
hikes. However, Fed Chairman Greenspan indicated that inflation was a greater
concern than the sustainability of economic growth, and we believe that the Fed
is likely to continue to raise short-term interest rates into the first half of
2006.
1
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE: WITHOUT WITH
----------------------------------------
CLASS A 19,453 18,333
----------------------------------------
CLASS B 18,523 18,523
----------------------------------------
CLASS C 18,516 18,516
----------------------------------------
CLASS G 18,097 18,097
----------------------------------------
CLASS T 19,370 18,255
----------------------------------------
CLASS Z 19,818 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
[MOUNTAIN CHART]
CLASS A SHARES CLASS A SHARES LEHMAN BROTHERS
WITHOUT SALES CHARGE WITH SALES CHARGE S&P 500 INDEX AGGREGATE BOND INDEX
-------------------- ----------------- ------------- --------------------
10/95 10000.00 9425.00 10000.00 10000.00
10039.00 9462.00 9964.00 10130.00
10383.00 9786.00 10401.00 10282.00
10513.00 9909.00 10602.00 10426.00
10736.00 10119.00 10963.00 10495.00
10728.00 10112.00 11065.00 10312.00
10807.00 10185.00 11171.00 10240.00
10887.00 10261.00 11335.00 10183.00
11063.00 10427.00 11627.00 10162.00
11186.00 10543.00 11672.00 10298.00
10888.00 10262.00 11156.00 10326.00
11041.00 10406.00 11391.00 10309.00
11488.00 10827.00 12032.00 10488.00
11738.00 11063.00 12365.00 10721.00
12207.00 11505.00 13299.00 10904.00
12102.00 11406.00 13036.00 10803.00
12498.00 11779.00 13851.00 10836.00
12455.00 11739.00 13959.00 10863.00
12174.00 11474.00 13385.00 10743.00
12639.00 11912.00 14184.00 10904.00
13053.00 12303.00 15048.00 11007.00
13409.00 12638.00 15722.00 11138.00
14142.00 13329.00 16974.00 11439.00
13682.00 12895.00 16023.00 11342.00
14068.00 13259.00 16901.00 11509.00
14110.00 13299.00 16337.00 11676.00
14282.00 13461.00 17093.00 11729.00
14491.00 13658.00 17387.00 11848.00
14695.00 13850.00 17580.00 11999.00
15170.00 14297.00 18848.00 11990.00
15599.00 14702.00 19813.00 12031.00
15767.00 14861.00 20013.00 12093.00
15580.00 14684.00 19668.00 12208.00
15870.00 14957.00 20467.00 12312.00
15728.00 14824.00 20250.00 12338.00
14692.00 13847.00 17322.00 12539.00
15266.00 14389.00 18432.00 12832.00
16062.00 15138.00 19931.00 12764.00
16507.00 15558.00 21139.00 12837.00
17066.00 16085.00 22356.00 12875.00
17399.00 16399.00 23291.00 12967.00
17008.00 16030.00 22566.00 12740.00
17542.00 16533.00 23469.00 12810.00
17678.00 16662.00 24377.00 12851.00
17245.00 16254.00 23802.00 12738.00
17640.00 16626.00 25123.00 12697.00
17443.00 16440.00 24339.00 12643.00
17246.00 16254.00 24220.00 12636.00
17085.00 16103.00 23556.00 12783.00
17622.00 16608.00 25047.00 12830.00
17830.00 16804.00 25556.00 12829.00
18332.00 17278.00 27061.00 12767.00
17823.00 16798.00 25703.00 12725.00
17883.00 16855.00 25217.00 12879.00
19056.00 17961.00 27683.00 13049.00
18984.00 17892.00 26850.00 13011.00
18555.00 17488.00 26299.00 13005.00
19290.00 18181.00 26949.00 13275.00
19373.00 18259.00 26528.00 13396.00
20206.00 19044.00 28176.00 13590.00
19598.00 18471.00 26688.00 13676.00
19411.00 18295.00 26576.00 13766.00
18553.00 17487.00 24482.00 13992.00
18691.00 17616.00 24602.00 14252.00
19201.00 18097.00 25475.00 14486.00
18082.00 17042.00 23152.00 14612.00
17308.00 16312.00 21684.00 14685.00
17974.00 16940.00 23369.00 14623.00
17996.00 16961.00 23525.00 14711.00
17558.00 16549.00 22954.00 14767.00
17514.00 16507.00 22729.00 15098.00
16956.00 15981.00 21306.00 15271.00
16120.00 15193.00 19585.00 15450.00
16484.00 15536.00 19959.00 15773.00
17124.00 16139.00 21489.00 15555.00
17151.00 16165.00 21679.00 15456.00
16686.00 15727.00 21362.00 15581.00
16277.00 15341.00 20950.00 15732.00
16626.00 15670.00 21737.00 15471.00
15971.00 15052.00 20420.00 15771.00
15892.00 14979.00 20269.00 15905.00
15087.00 14219.00 18826.00 16042.00
14563.00 13726.00 17359.00 16236.00
14675.00 13831.00 17472.00 16510.00
13645.00 12861.00 15573.00 16778.00
14419.00 13590.00 16943.00 16701.00
14919.00 14061.00 17941.00 16696.00
14478.00 13645.00 16888.00 17041.00
14185.00 13369.00 16446.00 17057.00
14016.00 13210.00 16199.00 17292.00
14077.00 13267.00 16356.00 17278.00
14779.00 13929.00 17704.00 17421.00
15503.00 14612.00 18637.00 17746.00
15703.00 14800.00 18875.00 17710.00
15738.00 14833.00 19208.00 17115.00
16010.00 15089.00 19582.00 17228.00
15978.00 15059.00 19375.00 17684.00
16491.00 15543.00 20471.00 17520.00
16662.00 15704.00 20651.00 17562.00
17235.00 16244.00 21734.00 17741.00
17499.00 16493.00 22133.00 17883.00
17718.00 16699.00 22441.00 18076.00
17741.00 16721.00 22102.00 18212.00
17267.00 16274.00 21755.00 17738.00
17324.00 16328.00 22053.00 17667.00
17621.00 16607.00 22481.00 17768.00
17147.00 16161.00 21737.00 17944.00
17227.00 16237.00 21824.00 18287.00
17489.00 16483.00 22060.00 18336.00
17767.00 16745.00 22397.00 18490.00
18348.00 17293.00 23304.00 18342.00
18832.00 17750.00 24097.00 18511.00
18552.00 17485.00 23509.00 18628.00
18832.00 17749.00 24002.00 18518.00
18531.00 17465.00 23577.00 18423.00
18297.00 17245.00 23129.00 18672.00
18696.00 17621.00 23865.00 18874.00
18804.00 17723.00 23898.00 18977.00
19194.00 18090.00 24787.00 18805.00
19253.00 18146.00 24562.00 19045.00
09/05 19453.00 18333.00 24755.00 18852.00
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Asset Allocation 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 Standard & Poor's
(S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely
held, large-capitalization U.S. stocks. The Lehman Brothers Aggregate Bond Index
is a market value-weighted index that tracks the daily price, coupon, pay-downs,
and total return performance of fixed-rate, publicly placed, dollar-denominated,
and non-convertible investment grade debt issues with at least $250 million par
amount outstanding and with at least one year to final maturity. Unlike the
fund, indices are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 11/18/02 03/04/96 12/30/91 12/30/91
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1-YEAR 11.20 4.80 10.37 5.37 10.37 9.37 10.36 5.36 11.14 4.74 11.54
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR -0.15 -1.33 -0.85 -1.21 -0.86 -0.86 -0.86 -1.41 -0.18 -1.35 0.11
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 6.88 6.25 6.36 6.36 6.35 6.35 6.11 6.11 6.83 6.20 7.08
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy Asset
Allocation Fund for periods prior to November 18, 2002. The returns shown for
class A shares and class B shares also include the returns of Retail A shares of
the Galaxy Asset Allocation Fund (adjusted, as necessary, to reflect the sales
charges applicable to class A shares and class B shares, respectively), for
periods prior to the inception of Prime A shares (November 1, 1998) and Prime B
shares (November 1, 1998). Class A and class B shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although returns would have been
lower to the extent that expenses for class A and class B shares exceed expenses
paid by Retail A shares. The returns shown for class C shares include the
returns of Prime B shares of the Galaxy Asset Allocation Fund (adjusted to
reflect the sales charge applicable to class C shares) for periods prior to
November 18, 2002, the date on which class C shares were initially offered by
the fund. The returns shown for class C shares also include the returns of
Retail A shares of the Galaxy Asset Allocation Fund (adjusted to reflect the
sales charges applicable to class C shares) for periods prior to the date of
inception of Prime B shares (November 1, 1998). Class C shares generally would
have had substantially similar returns because they would have been invested in
the same portfolio of securities, although the returns would have been lower to
the extent that expenses for class C shares exceed expenses paid by Retail A and
Prime B shares. Retail A shares of the Galaxy Asset Allocation Fund were
initially offered on December 30, 1991. Class A, B and C shares were initially
offered on November 18, 2002. The returns for class G and class T shares include
the returns of Retail A shares (for class T shares) and Retail B shares (for
class G shares) of the Galaxy Asset Allocation Fund for periods prior to
November 18, 2002, the date on which class T and class G shares were initially
offered by the fund. The returns shown for class G shares also include the
returns of Retail A shares (adjusted to reflect sales charges applicable to
class G shares) for periods prior to the inception of Retail B shares of the
Galaxy Asset Allocation Fund (March 4, 1996). Retail A shares of the Galaxy
Asset Allocation Fund were initially offered on December 30, 1991. Class G
shares generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would have been lower to the extent that expenses for class
G shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Asset Allocation Fund for periods
prior to November 18, 2002, the date on which class Z shares were initially
offered by the fund. Trust shares of the Galaxy Asset Allocation Fund were
initially offered on December 30, 1991.
2
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA
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
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA ASSET ALLOCATION FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ----------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,049.49 1,018.35 6.88 6.78 1.34
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,046.18 1,014.59 10.72 10.56 2.09
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,045.52 1,014.59 10.72 10.56 2.09
- ----------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,045.83 1,014.84 10.46 10.30 2.04
- ----------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,049.18 1,018.10 7.14 7.03 1.39
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,052.09 1,019.60 5.61 5.52 1.09
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.
Had the Fund's Transfer Agent not waived a portion of expenses, total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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
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.
o FOR THE 12-MONTH PERIOD ENDED SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 11.20% WITHOUT SALES CHARGE.
o IN KEEPING WITH OUR GENERAL EXPECTATIONS, THE FUND'S RETURN FELL BETWEEN
THE RETURNS OF ITS BENCHMARKS, THE S&P 500 INDEX AND THE LEHMAN BROTHERS
AGGREGATE BOND INDEX. THE FUND'S RETURN WAS HIGHER THAN THE MORNINGSTAR,
MODERATE ASSET ALLOCATION CATEGORY AVERAGE OF 10.81%.
o AN EMPHASIS ON STOCKS HELPED THE FUND'S PERFORMANCE AS STOCKS OUTPERFORMED
BONDS FOR THE PERIOD.
[UP ARROW] [UP ARROW] [UP ARROW]
LEHMAN
BROTHERS
CLASS A S&P 500 AGGREGATE
SHARES INDEX BOND INDEX
11.20% 12.25% 2.80%
OBJECTIVE
Seeks a high total return by providing both a
current level of income greater than that
provided by popular stock market averages,
as well as long-term growth in the value
of the fund's assets.
TOTAL NET ASSETS
$386.1 million
The Morgan Stanley Capital International (MSCI) Europe, Australasia, Far East
(EAFE) Index is a free float-adjusted market capitalization index that is
designed to measure developed market equity performance, excluding the US and
Canada.
PORTFOLIO MANAGER'S REPORT _____________________________________________________
COLUMBIA ASSET ALLOCATION FUND
For the 12-month period ended September 30, 2005, Columbia Asset Allocation Fund
class A shares returned 11.20% without sales charge. The fund invests in a mix
of stocks and bonds, and we expect its return to fall between the returns of its
two benchmarks. In fact, the return compares favorably with a 12.25% return for
the S&P 500 Index and a 2.80% return for the Lehman Brothers Aggregate Bond
Index. The fund's return was somewhat higher than the average return of its peer
group, the Morningstar(R) Moderate Asset Allocation Category, which was 10.81%.
1
FINANCIAL MARKETS BUOYED BY FAVORABLE ENVIRONMENT
Steady economic growth, rising corporate profits and relatively low interest
rates buoyed the financial markets in the United States and around the world
during the reporting period. Most of the gains for stocks came in the fourth
quarter of 2004. Most of the gains for bonds came in the first half of 2005.
Since then, the broad market averages have reflected a less rewarding
environment. Rising energy prices and the economic fallout of two major Gulf
Coast hurricanes dampened investor enthusiasm for sectors of the stock and bond
markets that are linked to economic growth. Intermediate and long-term interest
rates edged higher and dampened investment-grade bond returns late in the
period. However, as short-term interest rates moved higher, yields on money
market mutual funds rose from their historical lows.
FUND'S STOCK ALLOCATIONS DROVE PERFORMANCE
Both the US and foreign stock markets delivered strong returns for the 12-month
reporting periods. However, the overall performance figures of the fund's equity
positions mask great diversity among sectors that make up the markets. For
example, mid-cap stocks outperformed both small- and large-cap stocks by a
comfortable margin. Value stocks continued to hold a performance advantage over
growth stocks, except among small-cap stocks, where growth and value returns
were nearly identical for the period. Stock performance was generally stronger
outside the United States. The fund's international stocks returned 25.34% for
the period, generally in line with its benchmark, the MSCI EAFE Index, which
returned 25.79%.
The fixed-income markets trailed the equity markets for the reporting period as
rising interest rates put a damper on returns late in the period. High-yield
bonds outperformed investment grade bonds, although their performance advantage
narrowed late in the period.
TACTICAL ASSET ALLOCATION CHANGES MADE TO POSITION FUND FOR OPPORTUNITY
During the period, we made several small tactical changes to the fund's asset
allocation. We reduced exposure to large-cap value stocks and added to the
fund's large-cap growth allocation. Value stock valuations have risen as the
group has outperformed. We believe that growth stocks may be positioned for a
market rotation and we have positioned the portfolio to take advantage of that
possibility. We also cut back on the fund's mid-cap and small-cap value
exposure. In fact, we cut the fund's small-cap value holdings down to 1% of the
portfolio, taking profits after the sector's long stretch of strong performance.
We maintained a position of approximately 11% in international stocks.
1 (C)2005 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.
4
NET ASSET VALUE PER SHARE AS OF 09/30/05 ($)
CLASS A 16.47
- -----------------------------------------------
CLASS B 16.47
- -----------------------------------------------
CLASS C 16.47
- -----------------------------------------------
CLASS G 16.46
- -----------------------------------------------
CLASS T 16.48
- -----------------------------------------------
CLASS Z 16.48
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 0.27
- -----------------------------------------------
CLASS B 0.15
- -----------------------------------------------
CLASS C 0.15
- -----------------------------------------------
CLASS G 0.16
- -----------------------------------------------
CLASS T 0.26
- -----------------------------------------------
CLASS Z 0.31
TOP 5 EQUITY SECTORS AS OF 09/30/05 (%)
FINANCIALS 12.7
- -----------------------------------------------
INFORMATION TECHNOLOGY 10.4
- -----------------------------------------------
HEALTH CARE 8.2
- -----------------------------------------------
ENERGY 7.2
- -----------------------------------------------
CONSUMER DISCRETIONARY 6.8
TOP 10 EQUITY HOLDINGS AS OF 09/30/05 (%)
GENERAL ELECTRIC 1.2
- -----------------------------------------------
EXXON MOBIL 1.0
- -----------------------------------------------
MICROSOFT 0.9
- -----------------------------------------------
CONOCOPHILLIPS 0.8
- -----------------------------------------------
HALLIBURTON 0.8
- -----------------------------------------------
AMERICAN INTERNATIONAL GROUP 0.7
- -----------------------------------------------
CITIGROUP 0.7
- -----------------------------------------------
MERRILL LYNCH 0.7
- -----------------------------------------------
JOHNSON & JOHNSON 0.7
- -----------------------------------------------
BP 0.7
PORTFOLIO STRUCTURE AS OF 09/30/05 (%)
COMMON STOCKS 62.8
- -----------------------------------------------
CORPORATE FIXED-INCOME
BONDS & NOTES 11.9
- -----------------------------------------------
MORTGAGE-BACKED SECURITIES 8.3
- -----------------------------------------------
GOVERNMENT AGENCIES & OBLIGATIONS 5.1
- -----------------------------------------------
ASSET-BACKED SECURITIES 3.7
- -----------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS 2.7
- -----------------------------------------------
INVESTMENT COMPANIES 0.2
- -----------------------------------------------
PREFERRED STOCK 0.0
- -----------------------------------------------
CONVERTIBLE BOND 0.0
- -----------------------------------------------
CONVERTIBLE PREFERRED STOCK 0.0
- -----------------------------------------------
CASH EQUIVALENTS, NET OTHER ASSETS
AND LIABILITIES 5.3
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
Within the fixed income portion of the portfolio, we cut back the fund's
high-yield allocation back to its neutral position after a period of strong
performance for the sector. The fund's position in investment grade bonds
remained relatively steady at approximately 27.8% of assets throughout the
period.
The biggest allocation shift for the period was reflected in the fund's higher
cash position. We raised cash from approximately 0.5% to 3.4% in an effort to
create a cushion against a potentially weakening economy and rising interest
rates.
LOOKING AHEAD
Rising energy prices have begun to cool economic growth. The full economic
impact of two devastating hurricanes late in the period has yet to be assessed.
However, data support our view that economic growth still has momentum in the
United States and around the world. If gasoline and energy prices retreat within
a relatively short period of time, and if the labor markets remain resilient, we
believe that economic growth can be sustained. We have positioned the fund to
take advantage of growth, if it continues, but also added a defensive tilt that
should help it weather a weaker environment.
Dr. Kuriyan and Ms. Wurdack are responsible for allocating the fund's assets
among the various asset classes. The investment decisions for each asset class
are made by professionals with expertise in that class.
Vikram Kuriyan, PhD, is the lead manager for
Columbia Asset Allocation Fund and has managed
the fund since August 2005. He has been with the
advisor or its predecessors or affiliate
organizations since 2000.
/s/ Vikram Kuriyan
Karen Wurdack has co-managed the fund since
August 2005 and has been with the advisor or its
predecessors or affiliate organizations since
1993.
/s/ Karen Wurdack
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investing in high-yield securities (commonly known as "junk bonds") offers the
potential for high current income and attractive total return, but involves
certain risks. Changes in economic conditions or other circumstances may
adversely affect a junk bond issuer's ability to make principal and interest
payments. Rising interest rates tend to lower the value of all bonds. High-yield
bonds issued by foreign entities have greater potential risks, including less
regulation, currency fluctuations, economic instability and political
developments.
The fund may be subject to the same types of risks associated with direct
ownership of real estate including the decline of property value due to general,
local and regional economic conditions.
International investing may involve certain risks, including foreign taxation,
currency fluctuations, risks associated with possible differences in financial
standards and other monetary and political risks.
5
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE WITHOUT WITH
----------------------------------------
CLASS A 20,578 19,394
----------------------------------------
CLASS B 19,546 19,546
----------------------------------------
CLASS C 19,576 19,576
----------------------------------------
CLASS G 18,939 18,939
----------------------------------------
CLASS T 20,408 19,234
----------------------------------------
CLASS Z 21,222 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
[MOUNTAIN CHART]
CLASS A SHARES CLASS A SHARES RUSSELL 1000
WITHOUT SALES CHARGE WITH SALES CHARGE GROWTH INDEX
-------------------- ----------------- -------------
10/95 10000.00 9425.00 10000.00
10052.00 9474.00 10007.00
10464.00 9862.00 10396.00
10529.00 9924.00 10456.00
10879.00 10253.00 10805.00
11021.00 10387.00 11002.00
11097.00 10459.00 11017.00
11311.00 10661.00 11307.00
11567.00 10902.00 11701.00
11575.00 10909.00 11717.00
10951.00 10321.00 11031.00
11201.00 10557.00 11315.00
11830.00 11150.00 12139.00
12115.00 11419.00 12212.00
12931.00 12187.00 13129.00
12686.00 11957.00 12872.00
13313.00 12548.00 13774.00
13035.00 12285.00 13680.00
12661.00 11933.00 12940.00
13351.00 12583.00 13800.00
14269.00 13449.00 14796.00
14705.00 13859.00 15388.00
15985.00 15066.00 16748.00
15459.00 14570.00 15768.00
16265.00 15330.00 16544.00
15948.00 15031.00 15932.00
16316.00 15378.00 16609.00
16548.00 15596.00 16795.00
16697.00 15737.00 17297.00
17795.00 16772.00 18598.00
18712.00 17636.00 19340.00
19064.00 17967.00 19607.00
18391.00 17333.00 19050.00
18985.00 17893.00 20216.00
18700.00 17625.00 20083.00
15605.00 14708.00 17068.00
16764.00 15801.00 18379.00
18297.00 17245.00 19857.00
19283.00 18174.00 21368.00
20773.00 19579.00 23295.00
21683.00 20437.00 24663.00
20805.00 19609.00 23536.00
21989.00 20725.00 24776.00
22407.00 21118.00 24808.00
21786.00 20533.00 24046.00
23492.00 22141.00 25730.00
22752.00 21444.00 24911.00
22438.00 21148.00 25318.00
22220.00 20943.00 24786.00
23307.00 21967.00 26657.00
24193.00 22802.00 28097.00
26176.00 24671.00 31019.00
25203.00 23753.00 29564.00
25903.00 24414.00 31010.00
28507.00 26867.00 33230.00
28053.00 26440.00 31648.00
27013.00 25459.00 30053.00
27842.00 26241.00 32331.00
27544.00 25960.00 30983.00
29577.00 27876.00 33787.00
28074.00 26460.00 30591.00
27588.00 26002.00 29144.00
24943.00 23509.00 24848.00
25806.00 24322.00 24063.00
26428.00 24908.00 25725.00
23735.00 22370.00 21357.00
21769.00 20518.00 19034.00
23346.00 22003.00 21441.00
23453.00 22104.00 21126.00
22442.00 21152.00 20636.00
22072.00 20803.00 20120.00
20584.00 19401.00 18474.00
18592.00 17523.00 16631.00
19194.00 18090.00 17504.00
20634.00 19447.00 19186.00
20955.00 19751.00 19149.00
20207.00 19045.00 18810.00
19547.00 18423.00 18030.00
20841.00 19642.00 18654.00
19557.00 18432.00 17131.00
19099.00 18001.00 16717.00
17407.00 16406.00 15171.00
16124.00 15197.00 14336.00
16240.00 15306.00 14379.00
14441.00 13610.00 12888.00
15618.00 14720.00 14070.00
16453.00 15507.00 14834.00
15323.00 14442.00 13809.00
14923.00 14065.00 13473.00
14768.00 13919.00 13411.00
14924.00 14066.00 13661.00
16054.00 15131.00 14670.00
16921.00 15948.00 15402.00
16989.00 16012.00 15615.00
17145.00 16159.00 16004.00
17584.00 16573.00 16402.00
17135.00 16150.00 16227.00
18071.00 17032.00 17139.00
18295.00 17243.00 17319.00
18723.00 17647.00 17918.00
19045.00 17950.00 18283.00
19161.00 18060.00 18400.00
18937.00 17848.00 18058.00
18411.00 17352.00 17849.00
18908.00 17821.00 18181.00
19210.00 18106.00 18408.00
17964.00 16931.00 17368.00
17730.00 16711.00 17283.00
18090.00 17050.00 17447.00
18441.00 17381.00 17719.00
19308.00 18198.00 18329.00
20090.00 18935.00 19047.00
19583.00 18457.00 18413.00
19760.00 18624.00 18608.00
19428.00 18311.00 18269.00
18901.00 17814.00 17922.00
19799.00 18661.00 18790.00
19712.00 18579.00 18720.00
20433.00 19258.00 19636.00
20278.00 19112.00 19382.00
09/05 20578.00 19394.00 19473.00
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Large Cap Growth 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 Growth
Index is an unmanaged index that measures the performance of those Russell 1000
Index companies with higher price-to-book ratios and higher forecasted growth
values. Unlike the fund, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in an index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/1/98 11/1/98 11/18/02 03/04/96 12/14/90 12/14/90
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1-YEAR 13.80 7.27 13.01 8.01 12.98 11.98 13.02 8.02 13.76 7.20 14.12
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR -6.02 -7.13 -6.78 -7.11 -6.75 -6.75 -6.89 -7.38 -6.17 -7.28 -5.81
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 7.48 6.85 6.93 6.93 6.95 6.95 6.59 6.59 7.39 6.76 7.81
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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.
The returns for class A and class B shares include the returns of Prime A shares
(for class A shares) and Prime B shares (for class B shares) of the Galaxy
Equity Growth Fund for periods prior to November 18, 2002, the date on which
class A and class B shares were initially offered by the fund. The returns shown
for class A shares and class B shares also include the returns of Retail A
shares of the Galaxy Equity Growth Fund (adjusted, as necessary, to reflect the
sales charges applicable to class A shares and class B shares, respectively) for
periods prior to the date of inception of Prime A shares and Prime B shares
(November 1, 1998). Class A and class B shares generally would have had
substantially similar returns to Retail A shares because they would have been
invested in the same portfolio of securities, although returns would have been
lower to the extent that expenses for class A and class B shares exceed expenses
paid by Retail A shares. The returns shown for class C shares include the
returns of Prime B shares of the Galaxy Equity Growth Fund (adjusted to reflect
the sales charge applicable to class C shares) for periods prior to November 18,
2002, the date on which class C shares were initially offered by the fund. The
returns shown for class C shares also include the returns of Retail A shares of
the Galaxy Equity Growth Fund (adjusted to reflect the sales charges applicable
to class C shares) for periods prior to the date of inception of Prime B shares
(November 1, 1998). Class C shares generally would have had substantially
similar returns because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class C shares exceed expenses paid by Retail A and Prime B shares.
The returns for class G and class T shares include the returns of Retail A
shares (for class T shares) and Retail B shares (for class G shares) of the
Galaxy Equity Growth Fund for periods prior to November 18, 2002, the date on
which class T and class G shares were initially offered by the fund. The returns
shown for class G shares also include the returns of Retail A shares (adjusted
to reflect sales charges applicable to class G shares) for periods prior to the
inception of Retail B shares of the Galaxy Equity Growth Fund (March 4, 1996).
Retail A shares were initially offered on December 14, 1990. Class G shares
generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would be lower to the extent that expenses for class G
shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Equity Growth Fund for periods
prior to November 18, 2002, the date on which class Z shares were initially
offered by the fund. Trust shares of the Galaxy Equity Growth Fund were
initially offered on December 14, 1990.
6
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS,
INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR
BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE
PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER
IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM
STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR
ACCOUNT DURING THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ----------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,059.71 1,020.00 5.22 5.11 1.01
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,056.30 1,016.24 9.07 8.90 1.76
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,056.20 1,016.24 9.07 8.90 1.76
- ----------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,056.50 1,016.50 8.82 8.64 1.71
- ----------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,059.61 1,019.75 5.47 5.37 1.06
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,061.22 1,021.26 3.93 3.85 0.76
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.
Had the fund's transfer agent not waived a portion of expenses, total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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 shares of different funds. If these transactional
costs were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
7
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 SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 13.80% WITHOUT SALES CHARGE.
o THE FUND CAME OUT AHEAD OF ITS BENCHMARK, THE RUSSELL 1000 GROWTH INDEX,
AS WELL AS ITS PEER GROUP, THE MORNINGSTAR LARGE GROWTH CATEGORY AVERAGE.
o STRONG STOCK SELECTION, PARTICULARLY IN THE CONSUMER DISCRETIONARY AND
HEALTH CARE SECTORS, DROVE PERFORMANCE.
[UP ARROW] [UP ARROW]
RUSSELL 1000
CLASS A SHARES GROWTH INDEX
13.80% 11.60%
OBJECTIVE
Seeks long-term capital
appreciation.
TOTAL NET ASSETS
$1,526.7 million
NET ASSET VALUE PER SHARE
AS OF 09/30/05 ($)
CLASS A 21.11
----------------------------------------
CLASS B 20.07
----------------------------------------
CLASS C 20.10
----------------------------------------
CLASS G 19.45
----------------------------------------
CLASS T 20.98
----------------------------------------
CLASS Z 21.50
PORTFOLIO MANAGERS' REPORT _____________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
For the 12-month period ended September 30, 2005, class A shares of Columbia
Large Cap Growth Fund returned 13.80% without sales charge. The fund did better
than the Russell 1000 Growth Index, which returned 11.60%. It also outpaced the
average return of its peer group, the Morningstar(R) Large Growth Category,
which was 13.39%. 1 Our focus on companies with solid competitive standings,
strong financial positions and superior sales growth resulted in strong stock
selection across most sectors, especially consumer discretionary and health
care.
RETAILING AND HEALTH CARE WERE THE BIGGEST DRIVERS OF PERFORMANCE
Healthy consumer spending helped fuel sizable gains in the consumer
discretionary sector, especially among retailers such as Chico's, Nordstrom,
Coach and Lowe's Companies. New store growth further aided sales at Chico's, a
women's apparel chain, while solid operating improvements helped boost revenues
at high-end retailer Nordstrom. We took profits and sold both stocks, reducing
the fund's retailing stake. However, we maintained positions in Coach, which
sells leather goods and accessories, and Lowe's Companies, the home improvement
store. We believe that both companies have the potential for continued strong
execution in their target markets.
In health care, our decision to underweight the stocks of major pharmaceutical
companies, many of which faced patent expirations and lackluster new product
potential, proved beneficial to the portfolio. In addition, the fund benefited
from standout performances from Amylin Pharmaceuticals, a biotech company that
develops drugs for diabetics, and Alcon, which specializes in treatments for eye
diseases. Caremark Rx, a leading pharmacy benefits manager, also posted strong
gains, fueled in part by a recent acquisition. These gains more than offset a
steep decline in Biogen Idec, which tumbled after pulling its new multiple
sclerosis drug from the market. We sold the stock.
CONSUMER STAPLES, ENERGY AND FINANCIALS FURTHER ADDED TO RETURNS
In the consumer staples sector, Altria (the parent of Philip Morris) rallied
nicely as investors became more optimistic that tobacco litigation concerns
would subside. We sold Altria to lock in profits. The fund also benefited from a
decision to reduce, then liquidate, its position in Wal-Mart. The stock suffered
as rising gas prices hurt Wal-Mart customers, putting pressure on sales.
Elsewhere, the fund had a slightly higher stake than the index in the
top-performing energy sector, as well as strong returns from a mix of energy
service companies and independent exploration and production companies.
In the financials sector, the fund's returns were also positive versus the
index. We made well-timed decisions to raise the fund's exposure to financials
relative to the index when the group was outperforming and to lower its exposure
when the group was underperforming. A focus on capital markets companies,
including Goldman Sachs Group and Merrill Lynch, also benefited results.
TECHNOLOGY STOCK RETURNS MODESTLY COST THE FUND
Technology returns were positive, but they lagged the sector average. The fund's
stake in Apple Computer was less than the index weight, and it failed to get the
full benefit of gains when the stock rallied amid stronger-than-expected i-Pod
sales. In addition, the fund had less exposure than the index to smaller
technology companies, which were strong performers. Yet, some of the fund's
technology holdings posted sharp gains. Among them were
1 (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.
8
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 0.02
- -----------------------------------------------
CLASS B 0.00
- -----------------------------------------------
CLASS C 0.00
- -----------------------------------------------
CLASS G 0.00
- -----------------------------------------------
CLASS T 0.02
- -----------------------------------------------
CLASS Z 0.03
SECTORS AS OF 09/30/05 (%)
INFORMATION TECHNOLOGY 30.3
- -----------------------------------------------
HEATH CARE 20.2
- -----------------------------------------------
CONSUMER DISCRETIONARY 11.1
- -----------------------------------------------
CONSUMER STAPLES 10.8
- -----------------------------------------------
INDUSTRIALS 10.2
- -----------------------------------------------
FINANCIALS 7.9
- -----------------------------------------------
ENERGY 7.6
- -----------------------------------------------
MATERIALS 2.0
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/05 (%)
GENERAL ELECTRIC 4.3
- -----------------------------------------------
MICROSOFT 4.0
- -----------------------------------------------
JOHNSON & JOHNSON 3.0
- -----------------------------------------------
AMERICAN INTERNATIONAL GROUP 2.4
- -----------------------------------------------
HALLIBURTON 2.2
- -----------------------------------------------
INTERNATIONAL BUSINESS MACHINES 2.2
- -----------------------------------------------
GILLETTE 2.0
- -----------------------------------------------
INTEL 2.0
- -----------------------------------------------
PRAXAIR 2.0
- -----------------------------------------------
PEPSI CO 2.0
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
COACH 0.9
- -----------------------------------------------
LOWE'S COS 1.2
- -----------------------------------------------
AMYLIN PHARMACEUTICALS 0.5
- -----------------------------------------------
ALCON 0.6
- -----------------------------------------------
CAREMARK RX 1.2
- -----------------------------------------------
APPLE COMPUTER 0.6
- -----------------------------------------------
GOLDMAN SACHS GROUP 0.6
- -----------------------------------------------
MERRILL LYNCH 1.1
- -----------------------------------------------
MEMC ELECTRONIC MATERIALS 1.2
Your fund is actively managed and the composition of its portfolio will change
over time. Holdings are calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
Cognizant Technology Solutions and MEMC Electronic Materials. Cognizant
is a high-end outsourcer of programming services, while MEMC Electronic
Materials supplies silicon used in semiconductors and solar cells. We sold
Cognizant when it reached our price target, but kept MEMC Electronic Materials.
LARGE-CAP GROWTH STOCKS REMAINED ATTRACTIVELY VALUED
We are optimistic about the outlook for large-cap growth stocks, which have
trailed small-and mid-cap stocks and value stocks in recent years. We think
large-cap growth stocks are attractively priced by historical standards. Put
another way, we believe some of America's best, strongest and most well-known
household names represent good potential long-term value for relatively low
risk. As we enter the latter stages of the economic cycle, we also think
investors may favor bigger, more mature companies that have historically
delivered predictable earnings growth in all types of market environments.
Paul J. Berlinguet has managed or co-managed
Columbia Large Cap Growth Fund since October
2003 and has been with the advisor or its
predecessors or affiliate organizations since
October 2003.
/s/ Paul J. Berlinguet
Edward P. Hickey has managed or co-managed the
fund since June 2005 and has been with the
advisor or its predecessors or affiliate
organizations since November 1998.
/s/ Edward P. Hickey
Roger R. Sullivan has managed or co-managed the
fund since June 2005 and has been with the
advisor since January 2005.
/s/ Roger R. Sullivan
Mary-Ann Ward has managed or co-managed the fund
since June 2005 and has been with the advisor or
its predecessors or affiliate organizations
since July 1997.
/s/ Mary-Ann Ward
John T. Wilson has managed or co-managed the
fund since August 2005 and has been with the
advisor since July 2005.
/s/ John T. Wilson
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
International investing may involve certain risks, including foreign taxation,
currency fluctuations, risks associated with possible differences in financial
standards and other monetary and political risks.
Investing in growth stocks incurs the possibility of losses because their prices
are sensitive to changes in current or expected earnings.
9
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE: WITHOUT WITH
-----------------------------------------
CLASS A 23,584 22,225
-----------------------------------------
CLASS B 22,004 22,004
-----------------------------------------
CLASS C 21,972 21,972
-----------------------------------------
CLASS G 22,040 22,040
-----------------------------------------
CLASS T 23,513 22,159
-----------------------------------------
CLASS Z 24,391 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
[MOUNTAIN CHART]
CLASS A SHARES CLASS A SHARES RUSSELL 1000
WITHOUT SALES CHARGE WITH SALES CHARGE VALUE INDEX
-------------------- ----------------- -------------
10/95 10000 9425 10000
9951 9379 9901
10471 9869 10402
10414 9815 10663
10752 10134 10996
10948 10318 11079
10973 10342 11268
11170 10527 11311
11457 10798 11452
11421 10764 11461
10976 10345 11028
11353 10700 11343
11907 11223 11795
12089 11394 12251
13022 12273 13139
12611 11886 12971
13202 12443 13600
13150 12394 13800
12557 11835 13303
13259 12497 13862
14269 13449 14637
14516 13682 15265
15872 14959 16413
15401 14515 15829
16154 15225 16785
15655 14754 16316
16007 15086 17037
16100 15174 17535
16319 15380 17286
17631 16617 18449
18523 17458 19578
18689 17615 19710
17970 16937 19418
18495 17431 19666
17879 16851 19320
14950 14091 16445
15669 14768 17389
17202 16213 18737
18452 17391 19610
19923 18777 20277
20742 19549 20439
19792 18654 20151
20407 19234 20568
21001 19794 22489
20699 19509 22242
21908 20648 22887
21033 19824 22216
20041 18888 21392
19211 18106 20645
19718 18584 21835
19827 18687 21664
21254 20032 21768
19932 18786 21059
19508 18386 19494
21911 20651 21872
21549 20310 21619
21388 20158 21846
20252 19088 20847
19904 18759 21108
21749 20498 22281
20914 19711 22486
21263 20040 23040
19343 18231 22185
20575 19392 23296
22682 21378 23385
21033 19824 22735
20377 19205 21932
22088 20818 23007
22532 21237 23524
21784 20532 23002
22104 20833 22954
20959 19754 22033
18224 17176 20482
19079 17982 20306
20790 19595 21486
21564 20324 21993
21171 19954 21824
20214 19052 21859
21672 20426 22893
20560 19378 22107
20560 19378 22218
18414 17355 20943
16611 15656 18995
16486 15538 19139
14480 13647 17011
15013 14150 18271
15906 14991 19423
15154 14282 18580
14951 14091 18130
14387 13560 17646
14450 13619 17676
15657 14757 19231
16676 15717 20474
16943 15969 20730
17146 16160 21039
17491 16485 21367
17272 16279 21157
18245 17196 22452
18449 17388 22758
19436 18319 24159
19815 18676 24585
20130 18973 25111
19971 18823 24890
19544 18420 24282
19702 18569 24530
20264 19098 25109
19881 18737 24755
20135 18977 25107
20300 19133 25496
20396 19223 25919
21370 20142 27230
22044 20776 28143
21819 20564 27642
22574 21276 28557
22143 20869 28165
21804 20550 27661
22238 20959 28328
22478 21185 28637
23204 21870 29464
22995 21673 29338
09/05 23584 22225 29748
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Disciplined Value 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, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in an index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/25/02 11/25/02 11/25/02 03/04/96 09/01/88 09/01/88
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1-YEAR 16.21 9.49 15.30 10.30 15.33 14.33 15.35 10.35 16.06 9.36 16.43
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR 2.43 1.23 1.59 1.27 1.56 1.56 1.63 1.14 2.37 1.17 2.75
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 8.96 8.31 8.21 8.21 8.19 8.19 8.22 8.22 8.93 8.28 9.33
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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 A, class B and class C are newer classes of shares. Their performance
information includes returns of the Retail A shares (for class A shares) and
Retail B shares (for class B and class C shares) of the Galaxy Equity Value Fund
for periods prior to November 25, 2002, the date on which class A, B and C
shares were initially offered by the fund. The returns shown for class B and
class C shares also include the performance of Retail A shares of the Galaxy
Equity Value Fund for periods prior to the inception of Retail B shares (March
4, 1996). Class B and class C shares generally would have had substantially
similar returns to Retail A shares because they would have been invested in the
same portfolio of securities, although the returns would have been lower to the
extent that expenses for class B and class C shares exceed expenses paid by
Retail A shares. The returns have not been restated to reflect any differences
in expenses (such as 12b-1 fees) between any of the predecessor shares and the
newer classes of shares. The returns for class G and class T shares include the
returns of Retail A shares (for class T shares) and Retail B shares (for class G
shares) of the Galaxy Equity Value Fund for periods prior to November 25, 2002,
the date on which class T and class G shares were initially offered by the fund.
The returns shown for class G shares also include the returns of Retail A shares
(adjusted to reflect the sales charge applicable to class G shares), for periods
prior to the inception of Retail B shares of the Galaxy Equity Value Fund (March
4, 1996). Retail A shares were initially offered on September 1, 1988. Class G
shares generally would have had substantially similar returns to Retail A shares
because they would have been invested in the same portfolio of securities,
although the returns would have been lower to the extent that expenses for class
G shares exceed expenses paid by Retail A shares. The returns for class Z shares
include returns of Trust shares of the Galaxy Equity Value Fund for periods
prior to November 25, 2002, the date on which class Z shares were initially
offered by the fund.
10
ESTIMATING YOUR ACTUAL EXPENSES
To estimate the expenses that you paid over the period, first you will need your
account balance at the end of the period:
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM COLUMBIA FUNDS,
INC., YOUR ACCOUNT BALANCE IS AVAILABLE ONLINE AT WWW.COLUMBIAFUNDS.COM OR
BY CALLING SHAREHOLDER SERVICES AT 800.345.6611
o FOR SHAREHOLDERS WHO RECEIVE THEIR ACCOUNT STATEMENTS FROM THEIR BROKERAGE
FIRM, CONTACT YOUR BROKERAGE FIRM TO OBTAIN YOUR ACCOUNT BALANCE
1. DIVIDE YOUR ENDING ACCOUNT BALANCE BY $1,000. FOR EXAMPLE, IF AN ACCOUNT
BALANCE WAS $8,600 AT THE END OF THE PERIOD, THE RESULT WOULD BE 8.6
2. IN THE SECTION OF THE TABLE BELOW TITLED "EXPENSES PAID DURING THE
PERIOD," LOCATE THE AMOUNT FOR YOUR SHARE CLASS. YOU WILL FIND THIS NUMBER
IS IN THE COLUMN LABELED "ACTUAL." MULTIPLY THIS NUMBER BY THE RESULT FROM
STEP 1. YOUR ANSWER IS AN ESTIMATE OF THE EXPENSES YOU PAID ON YOUR
ACCOUNT DURING THE PERIOD
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ----------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ----------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,065.48 1,019.00 6.27 6.12 1.21
- ----------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,061.32 1,015.24 10.13 9.90 1.96
- ----------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,061.42 1,015.24 10.13 9.90 1.96
- ----------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,062.32 1,015.49 9.87 9.65 1.91
- ----------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,065.28 1,018.75 6.52 6.38 1.26
- ----------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,067.08 1,020.26 4.97 4.86 0.96
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.
Had the fund's transfer agent not waived a portion of expenses, total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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 shares of different funds. If these transactional
costs were included, your costs would have been higher.
COMPARE WITH OTHER FUNDS
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this information
to compare the ongoing cost of investing in the fund with other funds. To do so,
compare the 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of other funds. As you compare hypothetical
examples of other funds, it is important to note that hypothetical examples are
meant to highlight the continuing cost of investing in a fund and do not reflect
any transactional costs, such as sales charges or redemption or exchange fees.
11
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 SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 16.21% WITHOUT SALES CHARGE.
o THE FUND PERFORMED IN LINE WITH ITS BENCHMARK, THE RUSSELL 1000 VALUE
INDEX, WHICH RETURNED 16.69%. IT OUTPERFORMED ITS PEER GROUP AVERAGE, THE
MORNINGSTAR LARGE VALUE CATEGORY, WHICH WAS 13.67%.
o STOCK SELECTION AIDED PERFORMANCE ACROSS SEVERAL SECTORS, INCLUDING HEALTH
CARE AND MATERIALS.
[UP ARROW] [UP ARROW]
RUSSELL 1000
CLASS A SHARES VALUE INDEX
16.21% 16.69%
OBJECTIVE
Seeks long-term capital
appreciation, with income
as a secondary goal.
TOTAL NET ASSETS
$431.0 million
NET ASSET VALUE PER SHARE AS OF 09/30/05 ($)
CLASS A 14.60
-----------------------------------------
CLASS B 13.96
-----------------------------------------
CLASS C 13.94
-----------------------------------------
CLASS G 13.97
-----------------------------------------
CLASS T 14.60
-----------------------------------------
CLASS Z 14.87
PORTFOLIO MANAGER'S REPORT _____________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
For the 12 months ended September 30, 2005, Columbia Disciplined Value Fund
class A shares returned 16.21% without sales charge. Over the same period, the
Russell 1000 Value Index returned 16.69% and the Morningstar(R) Large Value
Category returned an average 13.67%. 1 Management fees and transactions costs
accounted for the slight difference in performance between the fund and its
benchmark. The fund incurs these costs while the index does not. We believe that
stock selection accounted for the fund's outperformance relative to its peer
group.
STOCK SELECTION ACROSS SEVERAL SECTORS AIDED PERFORMANCE
Good stock selection in health care and materials aided the fund's performance
relative to its benchmark. In health care, the fund had more exposure to Medco
Health Solutions than the index, which was rewarded when the stock delivered
strong profit gains. The company experienced growth in clinical program revenue
and formulary management while operating costs declined. In the materials
sector, firming demand and pricing for copper, due in part to reconstruction
efforts in the aftermath of Hurricane Katrina, energized the profit outlook for
Phelps Dodge. The fund's position in the stock was larger than its weight in the
index, which magnified the impact of the stock's gains on the fund's relative
performance.
In some sectors, the fund's benefit from stock selection was a matter of owning
less than the index and thereby avoiding the full weight of a decline. For
example, the fund's exposure to Verizon Communications was less than the index.
The stock suffered a sharp decline as the result of continued price pressures
and modest expense increases, which detracted from profits. An underweight in
the stock helped the fund sidestep much of the decline.
MIXED RESULTS FROM ENERGY AND FINANCIAL STOCKS
Energy stocks were the fund's best performers. Higher oil and gas prices boosted
profit forecasts for Devon Energy, which returned more than 94% for the fund
during the period. Amerada Hess enjoyed higher refining margins. Its stock rose
and returned 55% for the fund. The returns of both stocks were amplified because
the fund had a larger weight in them than the index.
However, the fund's energy returns lagged the sector's return in the index
returns for two reasons: The fund had less exposure to energy than the index,
and stock selection was a modest detractor. The fund's exposure to
ConocoPhillips was lower than the index, and it missed out on some of its
outsized gains.
1 (C)2005 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.
12
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 0.16
- -----------------------------------------------
CLASS B 0.06
- -----------------------------------------------
CLASS C 0.06
- -----------------------------------------------
CLASS G 0.06
- -----------------------------------------------
CLASS T 0.15
- -----------------------------------------------
CLASS Z 0.20
SECTORS AS OF 09/30/05 (%)
FINANCIALS 34.7
- -----------------------------------------------
ENERGY 15.3
- -----------------------------------------------
CONSUMER DISCRETIONARY 9.4
- -----------------------------------------------
HEALTH CARE 7.2
- -----------------------------------------------
UTILITIES 7.2
- -----------------------------------------------
INDUSTRIALS 6.3
- -----------------------------------------------
TELECOMMUNICATION SERVICES 5.7
- -----------------------------------------------
CONSUMER STAPLES 5.7
- -----------------------------------------------
INFORMATION TECHNOLOGY 4.4
- -----------------------------------------------
MATERIALS 4.2
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/05 (%)
EXXON MOBIL 5.9
- -----------------------------------------------
JPMORGAN CHASE 4.2
- -----------------------------------------------
CHEVRONTEXACO 4.1
- -----------------------------------------------
WACHOVIA 3.4
- -----------------------------------------------
FIRSTENERGY 3.1
- -----------------------------------------------
PRUDENTIAL FINANCIAL 3.1
- -----------------------------------------------
AMERADA HESS 3.0
- -----------------------------------------------
HARTFORD FINANCIAL SERVICES GROUP 2.9
- -----------------------------------------------
INTERNATIONAL BUSINESS MACHINES 2.9
- -----------------------------------------------
CITIGROUP 2.8
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
MEDCO HEALTH SOLUTIONS 0.4
- -----------------------------------------------
PHELPS DODGE 1.4
- -----------------------------------------------
VERIZON COMMUNICATIONS 0.7
- -----------------------------------------------
DEVON ENERGY 2.0
- -----------------------------------------------
AMERADA HESS 3.0
- -----------------------------------------------
CONOCOPHILLIPS 0.2
- -----------------------------------------------
ANNALY MORTGAGE MANAGEMENT 1.6
- -----------------------------------------------
AMERICAN INTERNATIONAL GROUP 0.7
- -----------------------------------------------
PRUDENTIAL FINANCIAL 3.1
- -----------------------------------------------
HARTFORD FINANCIAL SERVICES GROUP 2.9
- -----------------------------------------------
CHUBB 2.7
- -----------------------------------------------
FIRST AMERICAN 1.4
Your fund is actively managed and the composition of its portfolio will change
over time. Holdings are calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
Financial stocks also made a positive contribution to the fund's return, but the
fund's financials trailed the index, generally because of stock selection. We
overweighted Annaly Mortgage Management, which lost ground as homeowners prepaid
their mortgages at a higher-than-expected rate and that cut into the company's
profits. The fund also had a significant position in American International
Group (AIG) whose stock price was battered due to concerns over storm-related
losses. However, many of the fund's financial positions, including Prudential
Financial, Hartford Financial Services Group, Chubb and First American delivered
strong double-digit returns for the period.
LOOKING AHEAD
We continue to believe that large companies have the potential to do well in an
environment of rising interest rates and slowing economic growth. We plan to
continue to seek out high quality companies that are included in the fund's
benchmark, that we believe have the potential for improved profit growth and
that are selling at relatively attractive prices. As always, we will target
companies in a variety of sectors and industry groups to maintain a diversified
portfolio.
Vikram Kuriyan has managed or co-managed the
fund since June 2005 and has been with the
advisor or its predecessors or affiliate
organizations since 2000.
/s/ Vikram Kuriyan
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investments in small- and mid-cap stocks may present special risks. They tend to
be more volatile and may be less liquid than the stocks of larger companies.
Small-cap stocks often have narrower markets, limited financial resources and
tend to be more thinly traded than stocks of larger companies.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a company's
prospects is wrong, the price of its stock may not approach the value the
advisor has placed on it.
13
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE WITHOUT WITH
-----------------------------------------
CLASS A 20,678 19,494
-----------------------------------------
CLASS B 19,622 19,622
-----------------------------------------
CLASS C 19,637 19,637
-----------------------------------------
CLASS G 19,118 19,118
-----------------------------------------
CLASS T 20,510 19,335
-----------------------------------------
CLASS Z 21,167 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA COMMON STOCK FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
[MOUNTAIN CHART]
CLASS A SHARES CLASS A SHARES RUSSELL
WITHOUT SALES CHARGE WITH SALES CHARGE 1000 INDEX S&P 500 INDEX
-------------------- ----------------- ------------- ---------------
10/95 10000.00 9425.00 10000.00 10000.00
9872.00 9304.00 9964.00 9954.00
10317.00 9724.00 10401.00 10398.00
10527.00 9921.00 10602.00 10556.00
10757.00 10139.00 10963.00 10897.00
10885.00 10259.00 11065.00 11039.00
11109.00 10471.00 11171.00 11138.00
11314.00 10663.00 11335.00 11307.00
11528.00 10865.00 11627.00 11579.00
11446.00 10788.00 11672.00 11591.00
10991.00 10359.00 11156.00 11033.00
11309.00 10659.00 11391.00 11333.00
11743.00 11068.00 12032.00 11970.00
11873.00 11190.00 12365.00 12234.00
12786.00 12050.00 13299.00 13137.00
12617.00 11891.00 13036.00 12924.00
13230.00 12469.00 13851.00 13691.00
13258.00 12495.00 13959.00 13743.00
12872.00 12132.00 13385.00 13124.00
13373.00 12604.00 14184.00 13834.00
14186.00 13370.00 15048.00 14720.00
14703.00 13858.00 15722.00 15329.00
15718.00 14814.00 16974.00 16583.00
15177.00 14305.00 16023.00 15800.00
15862.00 14950.00 16901.00 16666.00
15443.00 14555.00 16337.00 16126.00
15928.00 15012.00 17093.00 16826.00
16298.00 15360.00 17387.00 17168.00
16240.00 15307.00 17580.00 17295.00
17444.00 16441.00 18848.00 18528.00
18271.00 17220.00 19813.00 19462.00
18419.00 17360.00 20013.00 19662.00
17975.00 16941.00 19668.00 19237.00
18070.00 17031.00 20467.00 19949.00
17626.00 16612.00 20250.00 19710.00
14901.00 14044.00 17322.00 16763.00
15629.00 14731.00 18432.00 17891.00
16977.00 16000.00 19931.00 19305.00
17912.00 16882.00 21139.00 20500.00
18883.00 17797.00 22356.00 21805.00
19113.00 18014.00 23291.00 22584.00
18737.00 17659.00 22566.00 21868.00
19467.00 18348.00 23469.00 22706.00
20232.00 19069.00 24377.00 23655.00
20245.00 19081.00 23802.00 23144.00
21372.00 20143.00 25123.00 24324.00
20690.00 19501.00 24339.00 23582.00
19900.00 18756.00 24220.00 23360.00
19112.00 18013.00 23556.00 22718.00
19490.00 18370.00 25047.00 24245.00
19685.00 18553.00 25556.00 24868.00
20201.00 19040.00 27061.00 26367.00
19488.00 18367.00 25703.00 25289.00
19112.00 18013.00 25217.00 25221.00
21078.00 19866.00 27683.00 27518.00
21104.00 19890.00 26850.00 26602.00
21013.00 19805.00 26299.00 25913.00
20477.00 19300.00 26949.00 26574.00
20567.00 19385.00 26528.00 26132.00
21943.00 20681.00 28176.00 28066.00
20932.00 19728.00 26688.00 26764.00
21296.00 20071.00 26576.00 26443.00
20244.00 19080.00 24482.00 24026.00
20977.00 19771.00 24602.00 24317.00
21824.00 20569.00 25475.00 25117.00
20722.00 19530.00 23152.00 22773.00
19423.00 18306.00 21684.00 21261.00
20724.00 19532.00 23369.00 22968.00
20993.00 19786.00 23525.00 23125.00
20536.00 19355.00 22954.00 22602.00
20565.00 19382.00 22729.00 22292.00
19446.00 18328.00 21306.00 20935.00
17733.00 16713.00 19585.00 19159.00
18031.00 16994.00 19959.00 19558.00
19390.00 18275.00 21489.00 21064.00
19753.00 18617.00 21679.00 21289.00
18860.00 17775.00 21362.00 21019.00
18583.00 17514.00 20950.00 20601.00
19341.00 18229.00 21737.00 21447.00
18316.00 17263.00 20420.00 20218.00
18579.00 17511.00 20269.00 20041.00
17030.00 16051.00 18826.00 18562.00
15800.00 14892.00 17359.00 17188.00
15669.00 14768.00 17472.00 17277.00
13794.00 13001.00 15573.00 15422.00
14761.00 13912.00 16943.00 16703.00
15680.00 14779.00 17941.00 17680.00
14819.00 13967.00 16888.00 16680.00
14570.00 13733.00 16446.00 16276.00
14145.00 13332.00 16199.00 16024.00
14289.00 13468.00 16356.00 16190.00
15362.00 14479.00 17704.00 17497.00
16141.00 15213.00 18637.00 18494.00
16225.00 15292.00 18875.00 18739.00
16490.00 15541.00 19208.00 19111.00
16857.00 15888.00 19582.00 19499.00
16505.00 15556.00 19375.00 19300.00
17329.00 16332.00 20471.00 20431.00
17549.00 16540.00 20651.00 20677.00
18101.00 17061.00 21734.00 21667.00
18263.00 17212.00 22133.00 22079.00
18454.00 17393.00 22441.00 22383.00
18292.00 17240.00 22102.00 22079.00
17822.00 16797.00 21755.00 21679.00
18146.00 17103.00 22053.00 21992.00
18455.00 17393.00 22481.00 22387.00
17600.00 16588.00 21737.00 21602.00
17468.00 16464.00 21824.00 21707.00
17674.00 16658.00 22060.00 21981.00
17807.00 16783.00 22397.00 22335.00
18484.00 17421.00 23304.00 23291.00
19138.00 18037.00 24097.00 24134.00
18772.00 17693.00 23509.00 23526.00
19213.00 18109.00 24002.00 24055.00
18864.00 17779.00 23577.00 23675.00
18377.00 17320.00 23129.00 23239.00
19077.00 17980.00 23865.00 24062.00
19245.00 18139.00 23898.00 24161.00
20417.00 19243.00 24787.00 25101.00
20403.00 19230.00 24562.00 24882.00
09/05 20678.00 19494.00 24755.00 25120.00
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Common Stock 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 fund's primary benchmark was
changed to the Russell 1000 Index. Previously, the fund's returns were compared
to the S&P 500 Index. The Russell 1000 Index is an unmanaged index that tracks
the performance of 1000 of the largest U.S. companies, based on market
capitalization. The Standard & Poor's (S&P) 500 Index is an unmanaged index that
tracks the performance of 500 widely held, large-capitalization U.S. stocks.
Unlike the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in an
index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 12/09/02 03/04/96 02/12/93 12/14/92
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1-YEAR 16.98 10.28 16.02 11.02 16.10 15.10 16.10 11.10 16.97 10.23 17.25
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR -0.25 -1.42 -1.00 -1.35 -0.99 -0.99 -1.07 -1.58 -0.34 -1.51 0.01
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 7.54 6.90 6.97 6.97 6.98 6.98 6.69 6.69 7.45 6.82 7.79
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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.
The returns for class A and class B shares include the returns of Prime A
shares (for class A shares) and Prime B shares (for class B shares) of the
Galaxy Growth & Income Fund for periods prior to December 9, 2002, the date on
which class A and class B shares were initially offered by the fund. The returns
shown for class A shares and class B shares also include the returns of Retail A
shares of the Galaxy Growth & Income Fund (adjusted to reflect the sales charge
applicable to class A shares and class B shares, respectively) for periods prior
to the inception of Prime A and Prime B shares (November 1, 1998). Class A and
class B shares generally would have had substantially similar returns to Retail
A shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class A and class B shares exceed expenses paid by Retail A shares.
The returns shown for class C shares include the returns of Prime B shares of
the Galaxy Growth & Income Fund (adjusted to reflect the sales charge applicable
to class C shares) for periods prior to December 9, 2002, the date on which
class C shares were initially offered. The returns shown for class C shares also
include the returns of Retail A shares of the Galaxy Growth & Income Fund
(adjusted to reflect the sales charges applicable to class C shares) for periods
prior to the inception of Prime B shares (November 1, 1998). Class C shares
generally would have had substantially similar returns to Retail A and Prime B
shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class C shares exceed expenses paid by Retail A and Prime B shares.
The returns for class G and class T shares include the returns of Retail A
shares (for class T shares) and Retail B shares (for class G shares) of the
Galaxy Growth & Income Fund for periods prior to December 9, 2002, the date on
which class T and class G shares were initially offered by the fund. The returns
shown for class G shares also include the returns of Retail A shares for periods
prior to the inception of Retail B shares of the Galaxy Growth & Income Fund
(March 4, 1996). Retail A shares were initially offered on February 12, 1993.
Class G shares generally would have had substantially similar returns to Retail
A shares because they would have been invested in the same portfolio of
securities, although the returns would have been lower to the extent that
expenses for class G shares exceed expenses paid by Retail A shares. The returns
for class Z shares include returns of Trust shares of the Galaxy Growth & Income
Fund for periods prior to December 9, 2002, the date on which class Z shares
were initially offered by the fund, and returns of Trust shares of the Shawmut
Fund (whose shares were initially offered on December 14, 1992), for periods
prior to December 14, 1995.
14
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
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA COMMON STOCK FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ---------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,096.01 1,019.35 5.99 5.77 1.14
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,091.50 1,015.59 9.91 9.55 1.89
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,091.40 1,015.59 9.91 9.55 1.89
- ---------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,091.50 1,015.84 9.65 9.30 1.84
- ---------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,095.61 1,019.10 6.25 6.02 1.19
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,097.22 1,020.61 4.68 4.51 0.89
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.
Had the fund's investment advisor and transfer agent not reimbursed/waived a
portion of expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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.
15
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 SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 16.98% WITHOUT SALES CHARGE.
o THE FUND OUTPERFORMED BOTH ITS BENCHMARK AND ITS PEER GROUP FOR THE
PERIOD.
o SUPERIOR STOCK SELECTION, ESPECIALLY WITHIN THE HEALTH CARE AND FINANCIAL
SECTORS, WAS INSTRUMENTAL IN PRODUCING THE FUND'S ABOVE-AVERAGE RESULTS.
[UP ARROW] [UP ARROW]
RUSSELL 1000
CLASS A SHARES INDEX
16.98% 14.26%
OBJECTIVE
Seeks to provide a relatively
high total return through
long-term capital appreciation
and current income.
TOTAL NET ASSETS
$517.7 million
NET ASSET VALUE PER SHARE AS OF 09/30/05 ($)
CLASS A 13.59
-----------------------------------------
CLASS B 13.12
-----------------------------------------
CLASS C 13.13
-----------------------------------------
CLASS G 13.00
-----------------------------------------
CLASS T 13.52
-----------------------------------------
CLASS Z 13.66
PORTFOLIO MANAGERS' REPORT _____________________________________________________
COLUMBIA COMMON STOCK FUND
For the 12-month period ended September 30, 2005, class A shares of Columbia
Common Stock Fund returned 16.98% without sales charge. The fund outperformed
the 14.26% return of the Russell 1000 Index. It also outperformed the average
return of the Morningstar(R) Large Blend Category, which was 13.17% during the
same period. 1 Although the fund's sector allocations were not ideally suited to
the period, our individual stock selections more than made up the difference.
CONTRARIAN APPROACH LED TO OPPORTUNITY
Our contrarian approach to stock selection enabled us to capitalize on several
opportunities in the health care and financial sectors. Within health care,
generic drug manufacturers were one of the fund's bright spots. They were able
to sidestep the price competition that many investors feared would affect the
traditional pharmaceutical industry. In this regard, portfolio holdings IVAX and
Endo Pharmaceuticals Holdings were strong performers for the period. Drug
distributors such as McKesson and Cardinal Health also generated solid returns.
Both companies were able to improve their business models so that they now
receive fees for specific services, which have made their earnings growth less
dependent on the price appreciation of drugs held in inventory. By the end of
the period, the fund's commitment to the health care sector had risen to 17% of
the portfolio, up from 14% 12 months ago.
Within the financial sector, the fund benefited from a decision to focus on
brokerage companies and to limit exposure to bank stocks. Traditional brokerage
powerhouses such as Merrill Lynch and Goldman Sachs Group performed well during
a period of generally good health for the capital markets. E*TRADE Financial,
which the fund had purchased during several periods of price weakness, moved
higher amid the wave of consolidation that has swept over the discount brokerage
industry. Bank stocks, by contrast, were poor performers during the period.
Profit margins within the banking industry came under pressure from the Federal
Reserve's repeated moves to raise short-term interest rates. Due to the strong
stock selection, the financial sector added the greatest positive attribution to
the Portfolio over the index.
OPPORTUNITY LOST THROUGH SECTOR ALLOCATIONS
Although we were successful in many of our individual stock selections, we lost
some opportunity with respect to sector allocations. In particular, our
contrarian style led us to take profits in our energy holdings prematurely,
thereby missing the later stages of what became an extended rally. The fund was
also underweight in the stocks of public utilities, many of which were pushed
higher by the year-long spike in energy prices.
1 (C)2005 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.
16
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 0.42
- -----------------------------------------------
CLASS B 0.40
- -----------------------------------------------
CLASS C 0.40
- -----------------------------------------------
CLASS G 0.40
- -----------------------------------------------
CLASS T 0.42
- -----------------------------------------------
CLASS Z 0.43
SECTORS AS OF 09/30/05 (%)
INFORMATION TECHNOLOGY 20.2
- -----------------------------------------------
FINANCIALS 17.9
- -----------------------------------------------
HEALTH CARE 17.0
- -----------------------------------------------
CONSUMER DISCRETIONARY 12.4
- -----------------------------------------------
INDUSTRIALS 11.1
- -----------------------------------------------
CONSUMER STAPLES 7.5
- -----------------------------------------------
ENERGY 7.5
- -----------------------------------------------
MATERIALS 4.5
- -----------------------------------------------
TELECOMMUNICATION SERVICES 1.9
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/05 (%)
MICROSOFT 2.7
- -----------------------------------------------
CONOCOPHILLIPS 2.1
- -----------------------------------------------
AMERICAN INTERNATIONAL GROUP 1.9
- -----------------------------------------------
EXXON MOBIL 1.8
- -----------------------------------------------
BERKSHIRE HATHAWAY 1.8
- -----------------------------------------------
JPMORGAN CHASE 1.8
- -----------------------------------------------
UNUMPROVIDENT 1.8
- -----------------------------------------------
HONEYWELL INTERNATIONAL 1.7
- -----------------------------------------------
ATI TECHNOLOGIES 1.6
- -----------------------------------------------
CITIGROUP 1.6
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
IVAX 0.7
- -----------------------------------------------
ENDO PHARMACEUTICALS HOLDINGS 0.9
- -----------------------------------------------
MCKESSON 0.6
- -----------------------------------------------
CARDINAL HEALTH 1.0
- -----------------------------------------------
MERRILL LYNCH 0.5
- -----------------------------------------------
GOLDMAN SACHS GROUP 0.4
- -----------------------------------------------
E*TRADE FINANCIAL 1.0
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA COMMON STOCK FUND
A MORE CAUTIOUS APPROACH
We expect higher energy costs and interest rates to continue to affect corporate
earnings over the next 12 months. Given this outlook, we expect
larger-capitalization growth companies, a group that has been out of favor for a
number of years, to fare better in the months ahead. As a result, we believe
that this group presents a timely contrarian opportunity and we plan to have a
higher weight in these stocks to take advantage of this potential opportunity.
Guy W. Pope has co-managed Columbia Common Stock
Fund since March 2005 and has been with the
advisor or its predecessors or affiliate
organizations since 1993.
/s/ Guy W. Pope
Jeffrey D. Huffman has co-managed the fund since
August 2005 and has been with the advisor or its
predecessors or affiliate organizations since
2000.
/s/ Jeffrey D. Huffman
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
17
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE WITHOUT WITH
-----------------------------------------
CLASS A 38,359 36,143
-----------------------------------------
CLASS B 36,352 36,352
-----------------------------------------
CLASS C 36,368 36,368
-----------------------------------------
CLASS G 36,143 36,143
-----------------------------------------
CLASS T 37,882 35,694
-----------------------------------------
CLASS Z 39,380 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA SMALL CAP CORE FUND
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
[MOUNTIAN CHART]
CLASS A SHARES CLASS A SHARES S&P SMALLCAP RUSSELL
WITHOUT SALES CHARGE WITH SALES CHARGE 600 INDEX 2000 INDEX
-------------------- ----------------- ------------- ---------------
10/95 10000.00 9425.00 10000.00 10000.00
9716.00 9157.00 9506.00 9553.00
10090.00 9510.00 9882.00 9954.00
10378.00 9781.00 10045.00 10217.00
10247.00 9658.00 10068.00 10206.00
10591.00 9982.00 10397.00 10524.00
10898.00 10272.00 10619.00 10739.00
11572.00 10906.00 11229.00 11313.00
12007.00 11317.00 11627.00 11759.00
11703.00 11030.00 11172.00 11276.00
11029.00 10395.00 10403.00 10291.00
11588.00 10922.00 11047.00 10889.00
12082.00 11387.00 11532.00 11315.00
12123.00 11426.00 11452.00 11141.00
12632.00 11906.00 12047.00 11600.00
13151.00 12395.00 12188.00 11904.00
13342.00 12575.00 12390.00 12142.00
13294.00 12530.00 12134.00 11848.00
12857.00 12117.00 11511.00 11289.00
12723.00 11991.00 11652.00 11320.00
14065.00 13256.00 13019.00 12579.00
14988.00 14126.00 13595.00 13119.00
16025.00 15104.00 14450.00 13729.00
16520.00 15570.00 14814.00 14043.00
17786.00 16763.00 15793.00 15071.00
17405.00 16404.00 15111.00 14410.00
17234.00 16243.00 15001.00 14316.00
17259.00 16266.00 15304.00 14567.00
16967.00 15991.00 15005.00 14336.00
17944.00 16912.00 16372.00 15396.00
19076.00 17980.00 16998.00 16030.00
19166.00 18064.00 17098.00 16118.00
18166.00 17121.00 16194.00 15250.00
17672.00 16655.00 16241.00 15282.00
16502.00 15553.00 14998.00 14044.00
14252.00 13433.00 12104.00 11317.00
14857.00 14003.00 12844.00 12203.00
15228.00 14353.00 13440.00 12700.00
15971.00 15053.00 14197.00 13366.00
16331.00 15392.00 15104.00 14193.00
16417.00 15473.00 14914.00 14382.00
15465.00 14576.00 13570.00 13217.00
15072.00 14206.00 13745.00 13423.00
16138.00 15210.00 14654.00 14626.00
16732.00 15770.00 15010.00 14840.00
17555.00 16546.00 15864.00 15510.00
17592.00 16580.00 15724.00 15085.00
16860.00 15891.00 15032.00 14527.00
16826.00 15859.00 15095.00 14530.00
16182.00 15251.00 15058.00 14590.00
16889.00 15918.00 15687.00 15461.00
18080.00 17040.00 16977.00 17211.00
17859.00 16832.00 16450.00 16934.00
18218.00 17170.00 18653.00 19730.00
18852.00 17768.00 17963.00 18429.00
18782.00 17702.00 17656.00 17320.00
18686.00 17612.00 17133.00 16310.00
19038.00 17943.00 18146.00 17732.00
18748.00 17670.00 17701.00 17161.00
19866.00 18724.00 19269.00 18471.00
20200.00 19038.00 18745.00 17928.00
19785.00 18648.00 18863.00 17128.00
19220.00 18114.00 16900.00 15369.00
21153.00 19937.00 18982.00 16689.00
21741.00 20491.00 19796.00 17559.00
21932.00 20671.00 18589.00 16407.00
21645.00 20401.00 17735.00 15605.00
22630.00 21329.00 19087.00 16825.00
23630.00 22272.00 19451.00 17239.00
24301.00 22904.00 20163.00 17834.00
23937.00 22560.00 19826.00 16869.00
23810.00 22441.00 19374.00 16324.00
21679.00 20432.00 16755.00 14127.00
22332.00 21047.00 17648.00 14953.00
23524.00 22171.00 18940.00 16111.00
25053.00 23613.00 20222.00 17105.00
25106.00 23662.00 20398.00 16927.00
25593.00 24121.00 20047.00 16463.00
27571.00 25986.00 21631.00 17785.00
28109.00 26492.00 22243.00 17947.00
27552.00 25968.00 21322.00 17150.00
27015.00 25462.00 20220.00 16299.00
23457.00 22108.00 17365.00 13838.00
23335.00 21993.00 17530.00 13803.00
22206.00 20929.00 16457.00 12812.00
21946.00 20684.00 16984.00 13224.00
23317.00 21977.00 17868.00 14403.00
22888.00 21572.00 17264.00 13601.00
22305.00 21022.00 16671.00 13224.00
21667.00 20421.00 16137.00 12825.00
21684.00 20437.00 16265.00 12990.00
23308.00 21968.00 17585.00 14222.00
25334.00 23877.00 19003.00 15748.00
25937.00 24445.00 19497.00 16033.00
27324.00 25753.00 20511.00 17036.00
28346.00 26716.00 21509.00 17817.00
27927.00 26321.00 20877.00 17487.00
29879.00 28161.00 22687.00 18956.00
30790.00 29020.00 23545.00 19629.00
31769.00 29943.00 23961.00 20027.00
32408.00 30544.00 24652.00 20897.00
32878.00 30987.00 25125.00 21085.00
33121.00 31217.00 25451.00 21281.00
32485.00 30617.00 24606.00 20195.00
32466.00 30599.00 24983.00 20517.00
33797.00 31853.00 26367.00 21380.00
31941.00 30105.00 24922.00 19941.00
31622.00 29804.00 24703.00 19840.00
32877.00 30987.00 26005.00 20770.00
33121.00 31216.00 26491.00 21179.00
35744.00 33688.00 28756.00 23016.00
36952.00 34827.00 29388.00 23697.00
35899.00 33835.00 28724.00 22709.00
36692.00 34582.00 29549.00 23092.00
36017.00 33946.00 28783.00 22432.00
33852.00 31906.00 27174.00 21147.00
35521.00 33479.00 28973.00 22532.00
36754.00 34640.00 29915.00 23402.00
38761.00 36532.00 31716.00 24885.00
38342.00 36137.00 31250.00 24425.00
9/05 38359.00 36143.00 31524.00 24500.00
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Small Cap Core 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 2000 Index is an
unmanaged index that tracks the performance of the 2,000 smallest of the 3,000
largest U.S. companies, based on market capitalization. The Standard & Poor's
(S&P) SmallCap 600 Index is an unmanaged index that tracks the performance of
600 domestic companies traded on the New York Stock Exchange, the American Stock
Exchange and NASDAQ. The S&P SmallCap 600 Index is heavily weighted with the
stocks of companies with small market capitalizations. Unlike the fund, indices
are not investments, do not incur fees or expenses and are not professionally
managed. It is not possible to invest directly in an index. Securities in the
fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/01/98 11/01/98 11/18/02 11/01/98 02/12/93 12/14/92
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1- YEAR 16.69 9.98 15.87 10.87 15.79 14.79 15.91 10.91 16.58 9.89 16.96
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR 13.69 12.35 12.78 12.53 12.79 12.79 12.75 12.38 13.57 12.23 14.03
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 14.39 13.71 13.78 13.78 13.78 13.78 13.71 13.71 14.25 13.57 14.69
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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.
On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia Small
Cap Core Fund. Prior to November 18, 2002, the fund was named Galaxy Small Cap
Value Fund, and offered Retail A, Retail B, Trust, Prime A and Prime B share
classes. On that day, the fund changed its name to Liberty Small Cap Fund and
began offering class A, B, C, G, T and Z shares. The returns for class A and B
shares include returns of Prime A shares and Retail A shares (for class A
shares) and Prime B shares and Retail A shares (for class B shares) of the
former Galaxy Small Cap Value Fund for periods prior to the inception of class A
and class B shares. Class C share performance information includes returns of
Retail B shares and Retail A shares of the former Galaxy Small Cap Value Fund
for periods prior to the inception of class C shares. The returns for class G
and T shares include the returns of Retail A shares (for class T shares) and
Retail B shares (for class G shares) of the Galaxy Small Cap Value Fund for
periods prior to November 18, 2002. The returns shown for class G shares also
include the returns of Retail A shares (adjusted to reflect the sales charges
applicable to class G shares) for periods prior to the inception of Retail B
shares of the Galaxy Small Cap Value Fund (November 1, 1998). Retail A shares
were initially offered on February 12, 1993. Class G shares generally would have
had substantially similar returns because they would have been invested in the
same portfolio of securities, although the returns would be lower to the extent
that expenses for class G shares exceed expenses paid by Retail A shares. The
returns for class Z shares include the returns of Trust shares of the Galaxy
Small Cap Value Fund, for periods prior to November 18, 2002, and returns of
Trust shares of the Small Cap portfolio of The Shawmut Funds (the "Shawmut
Fund"), the predecessor to the Galaxy Small Cap Value Fund, for periods prior to
December 4, 1995. Total returns are not restated to reflect any expense
differential (e.g. Rule 12b-1 fees) between any of the share classes. Had the
expense differential been reflected, the returns for the periods prior to the
inception of class A, B and C shares would have been lower.
18
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
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA SMALL CAP CORE FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- ---------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,064.98 1,019.30 5.95 5.82 1.15
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,061.82 1,015.54 9.82 9.60 1.90
- ---------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,061.12 1,015.54 9.82 9.60 1.90
- ---------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,061.72 1,015.79 9.56 9.35 1.85
- ---------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,065.08 1,019.05 6.21 6.07 1.20
- ---------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,066.58 1,020.56 4.66 4.56 0.90
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.
Had the fund's transfer agent not waived a portion of expenses, total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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.
19
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 SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 16.69% WITHOUT SALES CHARGE.
o SMALL CAP STOCKS MADE A STRONG SHOWING DURING THE PERIOD, AND THE FUND,
ITS BENCHMARKS AND PEER GROUP DELIVERED SOLID RESULTS.
o THE FUND TRAILED ITS BENCHMARKS GENERALLY BECAUSE IT HAD LESS EXPOSURE TO
TECHNOLOGY STOCKS DURING THE LATE 2004 MARKET RALLY. HEALTHCARE STOCKS
MADE THE LARGEST CONTRIBUTION TO PERFORMANCE, FOLLOWED BY INDUSTRIALS AND
MATERIALS STOCKS.
[UP ARROW] [UP ARROW] [UP ARROW]
S&P
CLASS A RUSSELL 2000 SMALLCAP
SHARES INDEX 600 INDEX
16.69% 17.95% 21.23%
OBJECTIVE
Seeks long-term capital
appreciation.
TOTAL NET ASSETS
$1,527.5 million
NET ASSET VALUE PER SHARE AS OF 09/30/05 ($)
CLASS A 19.32
-----------------------------------------
CLASS B 18.56
-----------------------------------------
CLASS C 18.57
-----------------------------------------
CLASS G 18.40
-----------------------------------------
CLASS T 19.15
-----------------------------------------
CLASS Z 19.54
PORTFOLIO MANAGERS' REPORT _____________________________________________________
COLUMBIA SMALL CAP CORE FUND
For the 12-month period ended September 30, 2005, Columbia Small Cap Core Fund
class A shares returned 16.69% without sales charge. The fund's benchmarks, the
S&P SmallCap 600 Index and the Russell 2000 Index, returned 21.23% and 17.95%,
respectively, for the same period. The average return of the fund's peer group,
the Morningstar(R) Small Blend Category, was 19.24%. 1
SOLID PERFORMANCE--AND A CAUTIOUS STANCE
The fund trailed its benchmarks largely because it had less exposure to
technology stocks, which led the market advance in the fourth quarter of 2004.
While the fund's conservative stance toward technology may restrain returns
during a strong market rally, where riskier stocks lead, we believe it is a
prudent long-term approach, with the potential to cushion returns during market
declines, when riskier stocks are out of favor. An underweight in financials, as
well as weak performance from Oriental Financial Group, a Puerto Rico bank, also
detracted from the fund's return.
ENERGY STOCKS LED PERFORMANCE
Energy stocks made the strongest contribution to fund performance, as energy
prices and profits surged throughout the period, but especially as oil refinery
production in the Gulf of Mexico was curtailed in the wake of hurricane Katrina.
Southwestern Energy, Gulfmark Offshore and Whiting Petroleum were some of the
fund's best performers. After the sector's strong run up, we reduced the fund's
energy exposure relative to the index because we believed that prices could
decline, a trend that was already underway at the end of the period.
STOCK SELECTION AIDED PERFORMANCE ACROSS INDUSTRIAL AND MATERIALS SECTORS
In the industrials sector, Chicago Bridge & Iron Company (CBI) was one of the
top stocks in the portfolio. A global engineering and construction company, CBI
benefited from concerns about the oil supply, as it is a leader in the
construction of liquefied natural gas (LNG) facilities. LSI Industries, a
commercial lighting and design company; and EMCOR Group, a global mechanical and
electrical construction company, also helped returns. In the materials sector,
Greif Inc., a global industrial packaging company, was a significant help. This
family-run business brought in a new management team that implemented a
long-term restructuring plan. Greif delivered good earnings, and we believe that
the company has some hidden asset value in the timberland it owns. We reduced
the fund's position in the stock when it reached our target valuation. However,
Greif remains an important part of the portfolio.
VALUATIONS, ECONOMIC ENVIRONMENT DROVE PORTFOLIO CHANGES
While we did not make substantial changes to the portfolio, we sold some small
positions that had reached our target valuations and/or that we believed were in
areas that could underperform over the longer term. For example, we reduced
exposure to the consumer discretionary area because we were concerned that
higher home heating costs and gasoline prices could have a negative impact on
consumer spending. We also cut back on financial stocks with high valuations.
Although banks benefited from low
1 (C)2005 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.
20
DISTRIBUTIONS DECLARED PER SHARE
10/01/04 - 09/30/05 ($)
CLASS A 1.07
- -----------------------------------------------
CLASS B 0.95
- -----------------------------------------------
CLASS C 0.95
- -----------------------------------------------
CLASS G 0.95
- -----------------------------------------------
CLASS T 1.06
- -----------------------------------------------
CLASS Z 1.12
SECTORS AS OF 09/30/05 (%)
CONSUMER DISCRETIONARY 20.3
- -----------------------------------------------
INDUSTRIALS 19.8
- -----------------------------------------------
INFORMATION TECHNOLOGY 17.0
- -----------------------------------------------
HEALTH CARE 15.5
- -----------------------------------------------
FINANCIALS 10.8
- -----------------------------------------------
MATERIALS 6.8
- -----------------------------------------------
ENERGY 4.3
- -----------------------------------------------
UTILITIES 2.8
- -----------------------------------------------
CONSUMER STAPLES 2.1
- -----------------------------------------------
TELECOMMUNICATION SERVICES 0.6
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/05 (%)
BENCHMARK ELECTRONICS 1.8
- -----------------------------------------------
ALBANY INTERNATIONAL 1.5
- -----------------------------------------------
INVACARE 1.3
- -----------------------------------------------
ARMOR HOLDINGS 1.2
- -----------------------------------------------
RES-CARE 1.2
- -----------------------------------------------
WEST PHARMACEUTICAL SERVICES 1.1
- -----------------------------------------------
PEDIATRIX MEDICAL 1.1
- -----------------------------------------------
EMCOR GROUP 1.0
- -----------------------------------------------
SYBASE 1.0
- -----------------------------------------------
LSI INDUSTRIES 1.0
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
ORIENTAL FINANCIAL GROUP 0.4
- -----------------------------------------------
SOUTHWESTERN ENERGY 0.8
- -----------------------------------------------
GULFMARK OFFSHORE 0.6
- -----------------------------------------------
WHITING PETROLEUM 0.5
- -----------------------------------------------
CHICAGO BRIDGE & IRON COMPANY 0.9
- -----------------------------------------------
LSI INDUSTRIES 1.0
- -----------------------------------------------
EMCOR GROUP 1.0
- -----------------------------------------------
GREIF 0.7
- -----------------------------------------------
WEST PHARMACEUTICAL SERVICES 1.1
- -----------------------------------------------
THORATEC 0.6
Your fund is actively managed and the composition of its portfolio will change
over time. Holdings are calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA SMALL CAP CORE FUND
interest rates over the past two years, they became less attractive as
short-term interest rates rose.
Relatively high valuations were also the reason for trimming some health care
holdings. However, some of the fund's health care holdings, such as West
Pharmaceutical Services and Thoratec, made solid contributions to return. West
Pharmaceutical's shares rose from depressed valuations after an explosion
destroyed one of its facilities two years ago. Thoratec, a medical device
company, has developed an important technology that is used in the treatment of
heart disease. The stock has been such a strong performer that we have recently
reduced the fund's holdings to recognize the strong gains.
LOOKING AHEAD WITH CAUTION
If higher energy prices lead to reduced consumer spending and cut into corporate
profits, the impact on economic growth--and on stock prices--is likely to be
negative. However, even with an uncertain backdrop, we believe that there are
investment opportunities to be found among small cap stocks. Going forward, we
plan to focus more on reasonably-valued growth stocks, because they have lagged
value stocks for several years running and their valuations are now more
attractive. As always, we plan to be selective in our investment choices,
emphasizing companies with attractive valuations and strong business prospects.
Peter Larson is the lead manager for Columbia
Small Cap Core Fund. He has managed the fund
since 1992 and has been with the advisor or its
predecessors or affiliate organizations since
1963.
/s/ Peter Larson
Richard D'Auteuil has co-managed the fund since
September 2005 and has been with the advisor or
its predecessors or affiliate organizations
since 1993.
/s/ Richard D'Auteuil
Allyn Seymour has co-managed the fund since
September 2005 and has been with the advisor or
its predecessors or affiliate organizations
since 1993.
/s/ Allyn Seymour
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investments in small-cap stocks may be subject to greater volatility and price
fluctuations because they may be thinly traded and less liquid than investments
in larger companies.
21
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
PERFORMANCE OF A $10,000 INVESTMENT
10/01/95 - 09/30/05 ($)
SALES CHARGE: WITHOUT WITH
-----------------------------------------
CLASS A 17,027 16,049
-----------------------------------------
CLASS B 15,921 15,921
-----------------------------------------
CLASS C 15,874 15,874
-----------------------------------------
CLASS G 15,893 15,893
-----------------------------------------
CLASS T 16,990 16,013
-----------------------------------------
CLASS Z 17,745 N/A
PERFORMANCE INFORMATION ________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
[MOUNTAIN CHART]
GROWTH OF A $10,000 INVESTMENT 10/01/95 - 09/30/05
CLASS A SHARES CLASS A SHARES RUSSELL 2000 RUSSELL 2000
WITHOUT SALES CHARGE WITH SALES CHARGE GROWTH INDEX INDEX
-------------------- ----------------- ------------- --------------
10/95 10000 9425 10000 10000
9731 9171 9508 9553
10083 9503 9927 9954
10088 9508 10148 10217
9870 9303 10063 10206
10529 9923 10522 10524
11036 10402 10731 10739
12304 11597 11555 11313
12788 12053 12148 11759
11930 11244 11358 11276
10969 10339 9971 10291
11640 10970 10709 10889
12395 11682 11261 11315
12063 11369 10775 11141
12099 11403 11075 11600
12190 11489 11291 11904
12657 11929 11573 12142
11415 10759 10874 11848
10702 10086 10106 11289
10366 9770 9989 11320
12170 11470 11490 12579
12836 12098 11880 13119
13529 12751 12488 13729
13934 13132 12863 14043
15058 14192 13889 15071
14365 13539 13055 14410
13775 12983 12744 14316
13918 13118 12751 14567
13584 12803 12582 14336
14718 13872 13693 15396
15348 14466 14267 16030
15154 14282 14354 16118
14088 13278 13310 15250
13909 13110 13446 15282
12666 11938 12323 14044
9535 8987 9479 11317
10568 9961 10440 12203
10592 9983 10985 12700
11299 10649 11838 13366
12395 11682 12909 14193
12528 11807 13490 14382
10740 10123 12255 13217
10515 9910 12692 13423
10771 10152 13812 14626
11129 10489 13835 14840
12038 11346 14564 15510
11851 11170 14114 15085
11642 10972 13586 14527
11952 11265 13848 14530
12170 11470 14202 14590
14167 13352 15704 15461
17221 16231 18472 17211
17066 16085 18300 16934
21139 19923 22559 19730
21077 19865 20188 18429
18350 17295 18149 17320
17278 16285 16559 16310
19269 18161 18699 17732
17357 16359 17096 17161
18997 17905 18895 18471
18266 17216 17956 17928
16905 15933 16498 17128
14885 14029 13502 15369
16280 15344 14328 16689
17247 16255 15487 17559
16008 15088 13364 16407
15032 14168 12149 15605
15970 15052 13636 16825
16420 15476 13952 17239
17021 16043 14333 17834
16495 15547 13111 16869
15791 14883 12291 16324
13118 12363 10307 14127
14028 13221 11299 14953
15107 14238 12242 16111
16261 15326 13005 17105
15557 14662 12542 16927
14393 13565 11731 16463
15537 14644 12750 17785
14938 14079 12475 17947
13859 13062 11745 17150
12779 12045 10749 16299
10649 10037 9097 13838
10668 10055 9092 13803
10162 9577 8436 12812
10537 9931 8863 13224
11512 10850 9741 14403
10771 10151 9069 13601
10245 9656 8822 13224
9954 9382 8587 12825
10236 9647 8716 12990
10939 10310 9541 14222
12177 11477 10616 15748
12469 11752 10821 16033
13097 12344 11639 17036
13716 12928 12264 17817
13228 12467 11954 17487
14608 13768 12987 18956
14945 14086 13410 19629
15320 14439 13470 20027
15968 15050 14178 20897
16119 15192 14156 21085
16381 15439 14223 21281
15687 14785 13509 20195
15743 14838 13778 20517
16099 15173 14236 21380
14542 13706 12958 19941
14148 13335 12679 19840
14955 14095 13381 20770
15321 14440 13706 21179
16429 15484 14864 23016
17010 16032 15397 23697
16081 15157 14705 22709
16287 15351 14906 23092
15659 14758 14347 22432
14758 13910 13435 21147
15762 14855 14382 22532
16324 15386 14846 23402
17150 16164 15884 24885
16831 15864 15660 24425
09/05 17027 16049 15787 24500
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Small Company Equity 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 2000 Growth
Index is an unmanaged index that measures the performance of those Russell 2000
Index companies with higher price-to-book ratios and higher 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 U.S. companies based on market
capitalization. Unlike the fund, indices are not investments, do not incur fees
or expenses and are not professionally managed. It is not possible to invest
directly in an index. Securities in the fund may not match those in an index.
AVERAGE ANNUAL TOTAL RETURN AS OF 09/30/05 (%)
SHARE CLASS A B C G T Z
- -----------------------------------------------------------------------------------------------------------------------------------
INCEPTION 11/18/02 11/18/02 11/18/02 03/04/96 12/30/91 12/30/91
- -----------------------------------------------------------------------------------------------------------------------------------
SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
- -----------------------------------------------------------------------------------------------------------------------------------
1-YEAR 13.86 7.33 13.04 8.04 13.01 12.01 13.06 8.06 13.76 7.22 14.13
- -----------------------------------------------------------------------------------------------------------------------------------
5-YEAR -1.39 -2.55 -2.18 -2.51 -2.24 -2.24 -2.22 -2.71 -1.44 -2.59 -1.06
- -----------------------------------------------------------------------------------------------------------------------------------
10-YEAR 5.47 4.84 4.76 4.76 4.73 4.73 4.74 4.74 5.44 4.82 5.90
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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 A, class B, and class C are newer classes of shares. Their performance
information includes returns of Retail A shares (for class A shares) and Retail
B shares (for class B and class C shares) of the Galaxy Small Company Equity
Fund for periods prior to November 18, 2002, the date on which class A, B, and C
shares were initially offered by the Fund. The returns of class B and class C
shares also include the returns of Retail A shares for periods prior to the
inception of Retail B shares of the Galaxy Small Company Equity Fund (March 4,
1996). Class B and class C shares generally would have had substantially similar
returns to Retail A shares because they would have been invested in the same
portfolio of securities, although the returns would be lower to the extent that
expenses for class B and class C shares exceed expenses paid by Retail A shares.
The returns have not been restated to reflect any differences in expenses
between the predecessor shares and the newer class of shares. If differences in
expenses had been reflected, the returns shown for periods prior to the
inception of the newer classes of shares would have been lower. The returns for
class G and T shares include the returns of Retail A shares (for class T shares)
and Retail B shares (for class G shares) of the Galaxy Small Company Equity Fund
for periods prior to November 18, 2002, the date on which class T and class G
shares were initially offered by the fund. The returns shown for class G shares
also include the returns of Retail A shares (adjusted to reflect the sales
charge applicable to class G shares) for periods prior to the inception of
Retail B shares of the Galaxy Small Company Equity Fund (March 4, 1996). Retail
A shares were initially offered on December 30, 1991. Class G shares generally
would have had substantially similar returns to Retail A shares because they
would have been invested in the same portfolio of securities, although the
returns would have been lower to the extent that expenses for class G shares
exceed expenses paid by Retail A shares. The returns for class Z shares include
the returns of Trust shares of the Galaxy Small Company Equity Fund for periods
prior to November 18, 2002, the date on which class Z shares were initially
offered by the fund.
22
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
UNDERSTANDING YOUR EXPENSES ____________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total return
for the period. The amount listed in the "hypothetical" column for each share
class assumes that the return each year is 5% before expenses and includes the
fund's actual expense ratio. You should not use the hypothetical account values
and expenses to estimate either your actual account balance at the end of the
period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
ACCOUNT VALUE AT THE ACCOUNT VALUE AT THE EXPENSES PAID FUND'S ANNUALIZED
BEGINNING OF THE PERIOD ($) END OF THE PERIOD ($) DURING THE PERIOD ($) EXPENSE RATIO (%)
- -------------------------------------------------------------------------------------------------------------------------
ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL
- -------------------------------------------------------------------------------------------------------------------------
CLASS A 1,000.00 1,000.00 1,087.49 1,017.80 7.59 7.33 1.45
- -------------------------------------------------------------------------------------------------------------------------
CLASS B 1,000.00 1,000.00 1,083.78 1,014.04 11.49 11.11 2.20
- -------------------------------------------------------------------------------------------------------------------------
CLASS C 1,000.00 1,000.00 1,083.98 1,014.04 11.49 11.11 2.20
- -------------------------------------------------------------------------------------------------------------------------
CLASS G 1,000.00 1,000.00 1,083.88 1,014.29 11.23 10.86 2.15
- -------------------------------------------------------------------------------------------------------------------------
CLASS T 1,000.00 1,000.00 1,086.99 1,017.55 7.85 7.59 1.50
- -------------------------------------------------------------------------------------------------------------------------
CLASS Z 1,000.00 1,000.00 1,089.59 1,019.05 6.29 6.07 1.20
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.
Had the fund's transfer agent not waived a portion of expenses, total return
would have been reduced.
It is important to note that the expense amounts shown in the table are meant to
highlight only ongoing costs of investing in the 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.
23
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 SEPTEMBER 30, 2005, THE FUND'S CLASS A
SHARES RETURNED 13.86% WITHOUT SALES CHARGE.
o FAVORABLE ENVIRONMENT FOR SMALL-CAP STOCKS HELPED THE FUND, ITS BENCHMARKS
AND PEER GROUP TO STRONG, DOUBLE-DIGIT RETURNS. HOWEVER, THE FUND'S
PERFORMANCE WAS LOWER THAN THAT OF ITS BENCHMARKS AND PEER GROUP.
o STOCK SELECTION WAS STRONG IN THE TECHNOLOGY SECTOR, BUT DISAPPOINTING IN
THE CONSUMER DISCRETIONARY, ENERGY AND HEALTH CARE SECTORS.
[UP ARROW] [UP ARROW] [UP ARROW]
CLASS A RUSSELL 2000 RUSSELL 2000
SHARES GROWTH INDEX INDEX
13.86% 17.97% 17.95%
OBJECTIVE
Seeks capital appreciation.
TOTAL NET ASSETS
$232.6 million
NET ASSET VALUE PER SHARE
AS OF 09/30/05 ($)
CLASS A 18.15
----------------------------------
CLASS B 16.82
----------------------------------
CLASS C 16.77
----------------------------------
CLASS G 16.79
----------------------------------
CLASS T 18.11
----------------------------------
CLASS Z 19.22
PORTFOLIO MANAGERS' REPORT _____________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
For the 12-month period ended September 30, 2005, class A shares of Columbia
Small Company Equity Fund returned 13.86% without sales charge. The Russell 2000
Growth Index and the Russell 2000 Index returned 17.97% and 17.95%,
respectively. The average return of the fund's peer group, the Morningstar(R)
Small Growth Category average, was 18.53%. 1 Despite strong gains from
technology stocks, returns in the consumer discretionary, energy and health care
sectors were disappointing.
SMALL-CAP STOCKS CONTINUED THEIR STRONG RUN
Small-cap stocks were among the market leaders during the period, driven by
strong earnings growth, brisk merger and acquisition activity, reasonable
valuations and continued low interest rates. The fund focused on small-cap
stocks with healthy balance sheets, attractive business models and strong
management teams. However, after taking over as portfolio managers in July, we
trimmed the fund's more speculative, micro-cap stocks and moved into "larger"
small companies with leadership positions and superior financial returns. This
boosted the fund's average market cap and gave it a higher quality focus.
TECHNOLOGY STOCKS WERE WINNERS
Long-time tech investments such as Itron, Retek and F5 Networks greatly aided
performance. Itron, which provides software and hardware for automated meter
reading, benefited as utilities increased their spending. Retek, a software
company, was bought out at a nice premium, while F5 Networks saw resurgence in
demand for the type of networking equipment it sells. In repositioning the
portfolio, we trimmed more volatile semiconductor and semiconductor equipment
stocks and added names like Microsemi, a semiconductor manufacturer that focuses
on medical as well as defense applications. The company benefited from internal
cost cutting as well as increased defense spending. Within the sector, we
favored companies that are positioned to benefit from increased corporate
spending and less vulnerable to a potential slowdown in consumer spending.
STOCK SELECTION FELL SHORT IN CONSUMER CYCLICALS, ENERGY AND HEALTH CARE
In the consumer discretionary sector, relative performance suffered from
investments in struggling retailers such as CostPlus and Sharper Image. We sold
both stocks in favor of companies with more predictable businesses. Among the
fund's largest investments was Gaylord Entertainment, which operates hotel and
convention centers that are booked years in advance. Its share price advanced
strongly during the period.
1 (C)2005 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.
24
SECTORS AS OF 09/30/05 (%)
INFORMATION TECHNOLOGY 26.3
-------------------------------------------------
HEALTH CARE 18.5
-------------------------------------------------
CONSUMER DISCRETIONARY 15.8
-------------------------------------------------
INDUSTRIALS 12.9
-------------------------------------------------
FINANCIALS 9.5
-------------------------------------------------
ENERGY 6.9
-------------------------------------------------
MATERIALS 3.8
-------------------------------------------------
TELECOMMUNICATION SERVICES 1.8
-------------------------------------------------
CONSUMER STAPLES 1.4
-------------------------------------------------
UTILITIES 1.0
Sector breakdown is calculated as a percentage of total investments excluding
short-term investments.
TOP 10 HOLDINGS AS OF 09/30/05 (%)
VCA ANTECH 2.1
-------------------------------------------------
AFFILIATED MANAGERS GROUP 2.1
-------------------------------------------------
UTI WORLDWIDE 1.6
-------------------------------------------------
GAYLORD ENTERTAINMENT 1.6
-------------------------------------------------
ISHARES NASDAQ BIOTECHNOLOGY INDEX 1.5
-------------------------------------------------
HUB GROUP 1.4
-------------------------------------------------
BOSTON PRIVATE FINANCIAL HOLDINGS 1.2
-------------------------------------------------
PROGRESS SOFTWARE 1.1
-------------------------------------------------
MICROSEMI 1.0
-------------------------------------------------
ENERGEN 1.0
HOLDINGS DISCUSSED IN THIS REPORT
AS OF 09/30/05 (%)
ITRON 0.6
-------------------------------------------------
F5 NETWORKS 0.2
-------------------------------------------------
MICROSEMI 1.0
-------------------------------------------------
GAYLORD ENTERTAINMENT 1.6
-------------------------------------------------
DENBURY RESOURCES 0.8
-------------------------------------------------
VCA ANTECH 2.1
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
________________________________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
The fund's stake in energy was slightly below that of the index, which hurt
performance as the sector soared. In addition, many of the fund's energy
investments were smaller exploration and production companies without proven
reserves. They did not fare nearly as well as companies whose earnings growth
were more closely linked to rising commodity prices. Over the summer, we shifted
toward larger exploration and production names, such as Denbury Resources, which
uses carbon dioxide to pump more oil out of existing wells. We also focused on
deep water drilling opportunities.
In health care, a number of early stage biotechnology companies declined
sharply, including Advancis Pharmaceuticals, which has developed a slow-release
drug delivery technology that lowers dosage requirements. When a partner
withdrew, Advancis was left with a worrisome funding shortfall. We sold the
fund's stake and moved into less volatile companies. Additions included VCA
Antech, which operates animal hospitals and provides animal lab tests. It
benefited as owners paid more for sophisticated treatments for their pets.
STOCK PICKING WILL BE KEY
We believe that the outlook for small-cap stocks remains favorable, fueled by
reasonable valuations, a pickup in merger and acquisition activity and
expectations that the Federal Reserve is near the end of its interest rate
cycle. We plan to focus on small-cap companies with outstanding products or
services that have the potential to increase earnings consistently over time and
deliver superior stock performance, regardless of the market environment.
Christian Pineno has been lead manager of
Columbia Small Company Equity Fund since June
2005 and has been with the advisor or its
predecessors or affiliate organizations since
July 1995.
/s/ Christian Pineno
Daniel H. Cole has co-managed the fund since
June 2005 and has been with the advisor or its
predecessors or affiliate organizations since
September 2001.
/s/ Daniel H. Cole
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investments in small-cap stocks may be subject to greater volatility and price
fluctuations because they may be thinly traded and less liquid than investments
in larger companies.
25
FINANCIAL STATEMENTS ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS
--------------------------------------------------------------------------------------
INVESTMENT Portfolio The investment portfolio details all of the fund's holdings and their
market value as of the last day of the reporting period. Portfolio holdings are
organized by type of asset, industry, country or geographic region (if applicable) to
demonstrate areas of concentration and diversification.
--------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES This statement details the fund's assets, liabilities, net assets and share price for
each share class as of the last day of the reporting period. Net assets are
calculated by subtracting all the fund's liabilities (including any unpaid expenses)
from the total of the fund's investment and non-investment assets. The share price
for each class is calculated by dividing net assets for that class by the number of
shares outstanding in that class as of the last day of the reporting period.
--------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund
during the reporting period. The Statement of Operations also shows any net gain or
loss the fund realized on the sales of its holdings during the period, as well as any
unrealized gains or losses recognized over the period. The total of these results
represents the fund's net increase or decrease in net assets from operations.
--------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS This statement demonstrates how the fund's net assets were affected by its operating
results, distributions to shareholders and shareholder transactions (e.g.,
subscriptions, redemptions and dividend reinvestments) during the reporting period.
The Statement of Changes in Net Assets also details changes in the number of shares
outstanding.
--------------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS These notes disclose the organizational background of the fund, its significant
accounting policies (including those surrounding security valuation, income
recognition and distributions to shareholders), federal tax information, fees and
compensation paid to affiliates and significant risks and contingencies.
--------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was
affected by the fund's operating results. The financial highlights table also
discloses the classes' performance and certain key ratios (e.g., class expenses and
net investment income as a percentage of average net assets).
26
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INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 62.8%
CONSUMER DISCRETIONARY - 6.8%
AUTO COMPONENTS - 0.4%
Autoliv, Inc. 1,780 77,430
BorgWarner, Inc. 1,310 73,962
Compagnie Generale des Etablissements
Michelin, Class B 3,400 200,050
Continental AG 3,100 254,786
Denso Corp. 8,700 253,667
Johnson Controls, Inc. 8,000 496,400
Modine Manufacturing Co. 510 18,707
Visteon Corp. (a) 1 10
-------------
Auto Components Total 1,375,012
AUTOMOBILES - 0.3%
Nissan Motor Co., Ltd. 10,400 119,267
Renault SA 2,432 230,586
Thor Industries, Inc. 388 13,192
Toyota Motor Corp. 14,800 682,462
Winnebago Industries, Inc. 1,480 42,875
-------------
Automobiles Total 1,088,382
DISTRIBUTORS - 0.0%
Building Material Holding Corp. 270 25,161
-------------
Distributors Total 25,161
DIVERSIFIED CONSUMER SERVICES - 0.1%
Career Education Corp. (a) 1,770 62,941
Education Management Corp. (a) 3,600 116,064
-------------
Diversified Consumer Services Total 179,005
HOTELS, RESTAURANTS & LEISURE - 1.2%
Accor SA 4,200 212,308
Applebee's International, Inc. 4,610 95,381
Bob Evans Farms, Inc. 390 8,857
Brinker International, Inc. (a) 2,770 104,041
Carnival Corp. 7,700 384,846
Cheesecake Factory, Inc. (a) 4,035 126,053
Dave & Buster's, Inc. (a) 830 11,080
Gaylord Entertainment Co. (a) 2,590 123,413
Harrah's Entertainment, Inc. 4,525 294,985
Hilton Hotels Corp. 5,220 116,510
Isle of Capris Casinos, Inc. (a) 1,670 35,705
Kerzner International Ltd. (a) 800 44,440
Lakes Entertainment, Inc. (a) 1,090 10,955
Landry's Restaurants, Inc. 680 19,924
Lone Star Steakhouse & Saloon 910 23,660
Marcus Corp. 440 8,818
Marriott International, Inc., Class A 8,540 538,020
McDonald's Corp. 27,920 935,041
Outback Steakhouse, Inc. 1,000 36,600
RARE Hospitality International, Inc. (a) 1,920 49,344
Scientific Games Corp., Class A (a) 2,330 72,230
Starbucks Corp. (a) 7,580 379,758
Starwood Hotels & Resorts
Worldwide, Inc. 15,340 876,988
Vail Resorts, Inc. (a) 420 12,075
SHARES VALUE ($)
- ----------------------------------------------------------------------
Wendy's International, Inc. 1,290 58,243
Yum! Brands, Inc. 3,100 150,071
-------------
Hotels, Restaurants & Leisure Total 4,729,346
HOUSEHOLD DURABLES - 0.3%
American Greetings Corp., Class A 1,490 40,826
Centex Corp. 550 35,519
CSS Industries, Inc. 420 13,658
D.R. Horton, Inc. 1,816 65,776
Daiwa House Industry Co., Ltd. 13,000 170,753
Fortune Brands, Inc. 1,070 87,023
Kimball International, Inc., Class B 910 11,002
Matsushita Electric Industrial Co., Ltd. 15,000 255,967
Sharp Corp. 7,000 101,808
Sony Corp. 4,200 138,737
Tempur-Pedic International, Inc. (a) 13,150 155,696
Yankee Candle Co., Inc. 1,190 29,155
-------------
Household Durables Total 1,105,920
INTERNET & CATALOG RETAIL - 0.3%
Blue Nile, Inc. (a) 1,340 42,398
Coldwater Creek, Inc. (a) 1,930 48,675
eBay, Inc. (a) 27,340 1,126,408
Netflix, Inc. (a) 3,630 94,344
Overstock.com, Inc. (a) 470 18,024
-------------
Internet & Catalog Retail Total 1,329,849
LEISURE EQUIPMENT & PRODUCTS - 0.1%
Fuji Photo Film Co., Ltd. 3,200 105,814
Marvel Enterprise, Inc. (a) 4,420 78,985
SCP Pool Corp. 1,790 62,525
Sega Sammy Holdings, Inc. 4,000 156,953
-------------
Leisure Equipment & Products Total 404,277
MEDIA - 0.5%
4Kids Entertainment, Inc. (a) 810 14,086
aQuantive, Inc. (a) 1,150 23,149
Arbitron, Inc. 320 12,749
British Sky Broadcasting Group PLC 22,500 222,518
Dow Jones & Co., Inc. 1,900 72,561
Getty Images, Inc. (a) 990 85,180
Grupo Televisa SA, ADR 1,500 107,565
Journal Communications, Inc., Class A 750 11,175
Lamar Advertising Co., Class A (a) 1,300 58,968
Lions Gate Entertainment Corp. (a) 6,300 60,102
Media General, Inc., Class A 230 13,342
Pearson PLC 12,820 149,125
R.H. Donnelley Corp. (a) 1,040 65,790
Radio One, Inc., Class D (a) 4,440 58,386
Reader's Digest Association, Inc., Class A 560 8,943
Scholastic Corp. (a) 500 18,480
Valassis Communications, Inc. (a) 1,050 40,929
Viacom, Inc., Class A 9,716 322,766
Vivendi Universal SA 6,200 202,654
XM Satellite Radio Holdings, Inc.,
Class A (a) 8,110 291,230
-------------
Media Total 1,839,698
28 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
CONSUMER DISCRETIONARY - (CONTINUED)
MULTILINE RETAIL - 1.0%
Dollar General Corp. 2,200 40,348
Federated Department Stores, Inc. 25,700 1,718,559
J.C. Penney Co., Inc. 23,819 1,129,497
Kohl's Corp. (a) 8,300 416,494
Target Corp. 13,010 675,609
-------------
Multiline Retail Total 3,980,507
SPECIALTY RETAIL - 2.1%
Abercrombie & Fitch Co., Class A 2,880 143,568
Aeropostale, Inc. (a) 920 19,550
Best Buy Co., Inc. 6,085 264,880
Charlotte Russe Holding, Inc. (a) 1,200 15,984
Chico's FAS, Inc. (a) 7,650 281,520
Children's Place Retail Stores, Inc. (a) 1,330 47,401
Finish Line, Inc., Class A 2,760 40,268
Gamestop Corp., Class A (a) 2,290 72,066
Guitar Center, Inc. (a) 360 19,876
Hibbett Sporting Goods, Inc. (a) 1,320 29,370
Home Depot, Inc. 36,891 1,407,023
Hot Topic, Inc. (a) 830 12,749
Jarden Corp. (a) 630 25,874
Lowe's Companies, Inc. 16,575 1,067,430
Monro Muffler, Inc. (a) 710 18,652
Movie Gallery, Inc. 620 6,442
Office Depot, Inc. (a) 48,640 1,444,608
PETCO Animal Supplies, Inc. (a) 830 17,563
PETsMART, Inc. 3,180 69,260
Pier 1 Imports, Inc. 670 7,551
Sherwin-Williams Co. 18,222 803,044
Staples, Inc. 43,920 936,375
Talbots, Inc. 1,420 42,486
TBC Corp. (a) 170 5,863
Tiffany & Co. 26,000 1,034,020
TJX Companies, Inc. 3,500 71,680
Tuesday Morning Corp. 1,490 38,546
Urban Outfitters, Inc. (a) 7,020 206,388
Yamada Denki Co., Ltd. 2,100 160,862
Zale Corp. (a) 480 13,046
-------------
Specialty Retail Total 8,323,945
TEXTILES, APPAREL & LUXURY GOODS - 0.5%
Burberry Group PLC 27,200 207,351
Carter's, Inc. (a) 260 14,768
Coach, Inc. (a) 31,695 993,955
Delta Apparel, Inc. 510 7,298
Hampshire Group Ltd. (a) 950 22,420
Jos. A. Bank Clothiers, Inc. (a) 1,090 47,110
Kellwood Co. 310 8,014
NIKE, Inc., Class B 5,510 450,057
Russell Corp. 670 9,407
SHARES VALUE ($)
- ----------------------------------------------------------------------
Stride Rite Corp. 840 10,769
Wolverine World Wide, Inc. 3,070 64,623
-------------
Textiles, Apparel & Luxury Goods Total 1,835,772
-------------
CONSUMER DISCRETIONARY TOTAL 26,216,874
CONSUMER STAPLES - 4.9%
BEVERAGES - 1.2%
Coca-Cola Co. 18,490 798,583
Diageo PLC 19,450 279,753
Diageo PLC, ADR 22,901 1,328,487
Pepsi Bottling Group, Inc. 2,100 59,955
PepsiCo, Inc. 40,974 2,323,635
-------------
Beverages Total 4,790,413
FOOD & STAPLES RETAILING - 0.7%
BJ's Wholesale Club, Inc. (a) 370 10,286
CVS Corp. 45,490 1,319,665
FamilyMart Co., Ltd. 2,200 66,303
Kroger Co. (a) 3,500 72,065
Lawson, Inc. 1,800 67,831
SUPERVALU, Inc. 2,400 74,688
Tesco PLC 46,550 254,202
United Natural Foods, Inc. (a) 590 20,862
Walgreen Co. 15,810 686,945
Weis Markets, Inc. 830 33,208
Whole Foods Market, Inc. 650 87,393
-------------
Food & Staples Retailing Total 2,693,448
FOOD PRODUCTS - 1.0%
Cadbury Schweppes PLC, ADR 19,500 794,235
Corn Products International, Inc. 6,270 126,466
Dean Foods Co. (a) 2,500 97,150
Delta & Pine Land Co. 1,280 33,805
Flowers Foods, Inc. 1,044 28,480
H.J. Heinz Co. 1,750 63,945
J & J Snack Foods Corp. 164 9,479
Kellogg Co. 19,610 904,609
Lancaster Colony Corp. 240 10,320
Lance, Inc. 660 11,524
Nestle SA, Registered Shares 2,974 871,554
Royal Numico NV (a) 5,886 257,779
Tyson Foods, Inc., Class A 4,670 84,294
Unilever PLC 36,210 378,541
-------------
Food Products Total 3,672,181
HOUSEHOLD PRODUCTS - 0.8%
Colgate-Palmolive Co. 18,330 967,640
Kao Corp. 8,000 197,809
Kimberly-Clark Corp. 12,292 731,743
Procter & Gamble Co. 18,830 1,119,632
Reckitt Benckiser PLC 6,583 200,698
-------------
Household Products Total 3,217,522
See Accompanying Notes to Financial Statements. | 29
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
CONSUMER STAPLES - (CONTINUED)
PERSONAL PRODUCTS - 0.5%
Alberto-Culver Co., Class B 1,240 55,490
Estee Lauder Cos., Inc., Class A 1,190 41,448
Gillette Co. 30,710 1,787,322
Nu Skin Enterprises, Inc., Class A 3,090 58,864
-------------
Personal Products Total 1,943,124
TOBACCO - 0.7%
Altria Group, Inc. 22,126 1,630,908
British American Tobacco PLC 16,759 352,979
Imperial Tobacco Group PLC 8,897 254,944
Japan Tobacco, Inc. 13 205,151
UST, Inc. 2,370 99,208
-------------
Tobacco Total 2,543,190
-------------
CONSUMER STAPLES TOTAL 18,859,878
ENERGY - 7.2%
ENERGY EQUIPMENT & SERVICES - 1.4%
Atwood Oceanics, Inc. (a) 640 53,894
CAL Dive International, Inc. (a) 910 57,703
Diamond Offshore Drilling, Inc. 1,250 76,563
Dresser-Rand Group, Inc. (a) 163 4,015
Dril-Quip, Inc. (a) 310 14,880
Energy Conversion Devices, Inc. (a) 830 37,250
FMC Technologies, Inc. (a) 3,360 141,490
Grant Prideco, Inc. (a) 1,960 79,674
Grey Wolf, Inc. (a) 2,050 17,282
Halliburton Co. 43,302 2,967,053
Hydril (a) 480 32,947
Lufkin Industries, Inc. 1,100 47,905
Maverick Tube Corp. (a) 320 9,600
Nabors Industries Ltd. (a) 1,300 93,379
National-Oilwell Varco, Inc. (a) 8,230 541,534
Noble Corp. 1,000 68,460
Saipem S.p.A. 18,600 312,897
Schlumberger Ltd. 5,724 482,991
Smith International, Inc. 3,730 124,246
Stolt Offshore SA (a) 9,400 108,707
Superior Well Services, Inc. (a) 200 4,620
Technip SA, ADR 1,100 65,395
Tetra Technologies, Inc. (a) 780 24,352
Transocean, Inc. (a) 1,100 67,441
Weatherford International Ltd. (a) 900 61,794
-------------
Energy Equipment & Services Total 5,496,072
OIL, GAS & CONSUMABLE FUELS - 5.8%
Alpha Natural Resources, Inc. (a) 610 18,324
Amerada Hess Corp. 550 75,625
BG Group PLC 29,852 283,492
Bill Barrett Corp. (a) 261 9,610
Bois d'Arc Energy, Inc. (a) 810 13,940
BP PLC, ADR 38,852 2,752,664
Cheniere Energy, Inc. (a) 540 22,334
Chesapeake Energy Corp. 2,100 80,325
Chevron Corp. 12,197 789,512
SHARES VALUE ($)
- ----------------------------------------------------------------------
Cimarex Energy Co. (a) 741 33,590
CNOOC Ltd. 354,000 253,750
Comstock Resources, Inc. (a) 560 18,374
ConocoPhillips 42,838 2,994,805
CONSOL Energy, Inc. 16,330 1,245,489
Denbury Resources, Inc. (a) 1,270 64,059
EnCana Corp. 6,200 362,272
Encore Acquisition Co. (a) 650 25,252
Energy Partners Ltd. (a) 810 25,288
ENI S.p.A. 14,313 424,241
EOG Resources, Inc. 23,140 1,733,186
Exxon Mobil Corp. 59,075 3,753,625
Frontier Oil Corp. 620 27,497
Harvest Natural Resources, Inc. (a) 1,190 12,769
Holly Corp. 430 27,511
Houston Exploration Co. (a) 250 16,813
InterOil Corp. (a) 350 8,155
KFx, Inc. (a) 480 8,218
LUKOIL, ADR 2,300 132,512
Marathon Oil Corp. 9,613 662,624
Massey Energy Co. 2,940 150,146
Murphy Oil Corp. 600 29,922
OMV AG 2,600 154,750
Peabody Energy Corp. 2,850 240,397
Pioneer Natural Resources Co. 15,700 862,244
Range Resources Corp. 840 32,432
Remington Oil & Gas Corp. (a) 1,520 63,080
Royal Dutch Shell PLC, Class A 3,846 127,151
Royal Dutch Shell PLC, Class B 14,768 509,843
Southwestern Energy Co. (a) 2,490 182,766
St. Mary Land & Exploration Co. 630 23,058
Statoil ASA 8,300 204,608
Stone Energy Corp. (a) 480 29,299
Superior Energy Services, Inc. (a) 3,500 80,815
Teekay Shipping Corp. 3,250 139,912
Tesoro Corp. 1,220 82,033
Total SA 2,890 786,230
Ultra Petroleum Corp. (a) 1,410 80,201
Western Gas Resources, Inc. 690 35,349
Williams Companies, Inc. 24,200 606,210
XTO Energy, Inc. 45,980 2,083,814
-------------
Oil, Gas & Consumable Fuels Total 22,380,116
-------------
ENERGY TOTAL 27,876,188
FINANCIALS - 12.7%
CAPITAL MARKETS - 2.6%
A.G. Edwards, Inc. 4,602 201,614
Affiliated Managers Group, Inc. (a) 4,070 294,749
Bank of New York Co., Inc. 33,692 990,882
Bear Stearns Companies, Inc. 400 43,900
Credit Suisse Group, Registered Shares 7,500 332,355
Deutsche Bank AG, Registered Shares 3,483 326,007
E*TRADE Financial Corp. (a) 5,300 93,280
Franklin Resources, Inc. 5,711 479,496
Goldman Sachs Group, Inc. 13,794 1,677,074
Lazard Ltd., Class A 5,150 130,295
Legg Mason, Inc. 550 60,329
Lehman Brothers Holdings, Inc. 3,500 407,680
30 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
CAPITAL MARKETS - (CONTINUED)
Merrill Lynch & Co., Inc. 45,732 2,805,658
Morgan Stanley 7,613 410,645
Nomura Holdings, Inc. 22,100 343,151
Piper Jaffray Companies, Inc. (a) 390 11,645
State Street Corp. 18,540 906,977
T. Rowe Price Group, Inc. 1,770 115,581
UBS AG, Registered Shares 4,000 340,274
-------------
Capital Markets Total 9,971,592
COMMERCIAL BANKS - 4.3%
Anglo Irish Bank Corp., PLC 9,900 134,862
Australia & New Zealand Banking
Group Ltd. 18,300 335,204
Banca Popolare Italiana 10,100 99,111
BancFirst Corp. 158 13,430
Banco Bilbao Vizcaya Argentaria SA 25,000 438,660
Banco Santander Central Hispano SA 29,500 387,904
BancorpSouth, Inc. 820 18,737
BancTrust Financial Group, Inc. 628 12,108
Bank of Granite Corp. 610 11,614
Bank of Hawaii Corp. 900 44,298
Barclays PLC 49,620 502,442
BNP Paribas SA 6,419 488,337
Boston Private Financial Holdings, Inc. 3,590 95,279
Bryn Mawr Bank Corp. 707 15,144
Capitol Bancorp Ltd. 693 22,453
Chemical Financial Corp. 670 21,775
Chittenden Corp. 860 22,799
Citizens Banking Corp. 360 10,224
City Holding Co. 340 12,158
City National Corp. 2,210 154,899
Columbia Banking System, Inc. 540 14,164
Commerzbank AG 9,200 251,162
Community Trust Bancorp, Inc. 560 18,021
Corus Bankshares, Inc. 400 21,932
Cullen/Frost Bankers, Inc. 1,900 93,746
DNB NOR ASA 17,200 177,337
East West Bancorp, Inc. 3,330 113,353
Fidelity Bankshares, Inc. 1,550 47,352
First Citizens BancShares, Inc., Class A 90 15,359
First Financial Bankshares, Inc. 465 16,196
First Financial Corp. 500 13,500
Greater Bay Bancorp 620 15,277
Hancock Holding Co. 360 12,290
HBOS PLC 19,500 293,578
HSBC Holdings PLC 39,900 646,803
Marshall & Ilsley Corp. 22,408 974,972
Mercantile Bankshares Corp. 1,300 70,044
Merchants Bancshares, Inc. 490 12,681
Mid-State Bancshares 870 23,934
Mitsubishi Tokyo Financial Group, Inc. 42 550,480
Mitsui Trust Holdings, Inc. 12,000 165,755
Mizuho Financial Group, Inc. 67 429,507
National Bank of Greece SA 6,305 250,244
SHARES VALUE ($)
- ----------------------------------------------------------------------
National City Corp. 11,663 390,011
North Fork Bancorporation, Inc. 10,154 258,927
Northrim BanCorp, Inc. 450 11,268
PNC Financial Services Group, Inc. 13,646 791,741
Prosperity Bancshares, Inc. 1,540 46,585
Resona Holdings, Inc. (a) 45 116,990
Societe Generale 3,453 394,620
South Financial Group, Inc. 1,660 44,554
Sterling Bancshares, Inc. 1,460 21,477
Sumitomo Mitsui Financial Group, Inc. 29 275,182
Texas Capital Bancshares, Inc. (a) 1,990 42,088
TriCo Bancshares 987 21,240
TrustCo Bank Corp. 1,120 14,034
U.S. Bancorp 54,839 1,539,879
UMB Financial Corp. 390 25,615
UnionBanCal Corp. 3,800 264,936
United Overseas Bank Ltd. 24,000 200,303
Wachovia Corp. 30,278 1,440,930
Wells Fargo & Co. 44,333 2,596,584
Westamerica Bancorporation 780 40,287
Westpac Banking Corp. 9,400 151,535
Whitney Holding Corp. 660 17,846
Zions Bancorporation 11,210 798,264
-------------
Commercial Banks Total 16,574,021
CONSUMER FINANCE - 0.1%
Aiful Corp. 2,100 177,136
Cash America International, Inc. 1,130 23,448
Nelnet, Inc., Class A (a) 1,120 42,571
ORIX Corp. 900 163,329
Takefuji Corp. 1,700 133,226
World Acceptance Corp. (a) 1,897 48,203
-------------
Consumer Finance Total 587,913
DIVERSIFIED FINANCIAL SERVICES - 1.5%
Advance America Cash Advance
Centers, Inc. 1,070 14,177
Chicago Mercantile Exchange 290 97,817
CIT Group, Inc. 1,600 72,288
Citigroup, Inc. 62,231 2,832,755
Fortis 8,680 251,873
ING Groep NV 11,520 343,540
JPMorgan Chase & Co. 45,303 1,537,131
Metris Companies, Inc. (a) 1,640 23,993
MFC Bancorp Ltd. (a) 1,490 37,175
Nuveen Investments, Class A 10,100 397,839
Suncorp-Metway Ltd. 8,100 121,852
-------------
Diversified Financial Services Total 5,730,440
INSURANCE - 3.1%
Ace Ltd. 18,500 870,795
Allianz AG, Registered Shares 2,454 331,537
Allstate Corp. 14,330 792,306
Ambac Financial Group, Inc. 10,580 762,395
American International Group, Inc. 45,855 2,841,176
AmerUs Group Co. 330 18,932
Argonaut Group, Inc. (a) 590 15,936
Aviva PLC 21,100 231,695
AXA 11,400 313,404
See Accompanying Notes to Financial Statements. | 31
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
INSURANCE - (CONTINUED)
Baldwin & Lyons, Inc., Class B 510 12,765
Chubb Corp. 5,850 523,868
CNA Surety Corp. (a) 1,120 15,926
Commerce Group, Inc. 170 9,863
Delphi Financial Group, Inc., Class A 550 25,740
Endurance Specialty Holdings Ltd. 1,900 64,809
Genworth Financial, Inc., Class A 1,600 51,584
Harleysville Group, Inc. 750 18,000
Hartford Financial Services Group, Inc. 11,152 860,600
Horace Mann Educators Corp. 730 14,439
Lincoln National Corp. 1,400 72,828
Loews Corp. 1,100 101,651
Mitsui Sumitomo Insurance Co., Ltd. 20,000 230,819
Muenchener Rueckversicherungs AG,
Registered Shares 1,200 137,093
Navigators Group, Inc. (a) 664 24,780
Old Republic International Corp. 2,550 68,009
Phoenix Companies, Inc. 1,550 18,910
ProCentury Corp. 1,340 13,722
QBE Insurance Group Ltd. 14,900 213,231
Quanta Capital Holdings Ltd. (a) 1,590 9,540
RLI Corp. 406 18,782
Sampo Oyj, Class A 22,100 351,155
Selective Insurance Group, Inc. 640 31,296
St. Paul Travelers Companies, Inc. 17,900 803,173
Storebrand ASA 13,200 129,061
Triad Guaranty, Inc. (a) 827 32,435
UICI 510 18,360
United America Indemnity Ltd.,
Class A (a) 840 15,414
UnumProvident Corp. 31,654 648,907
Willis Group Holdings Ltd. 11,333 425,554
XL Capital Ltd., Class A 11,479 780,916
-------------
Insurance Total 11,921,406
REAL ESTATE - 0.8%
Alexandria Real Estate Equities, Inc.,
REIT 230 19,019
Archstone-Smith Trust, REIT 15,496 617,826
AvalonBay Communities, Inc., REIT 6,736 577,275
Bedford Property Investors, Inc., REIT 563 13,422
BioMed Realty Trust, Inc., REIT 510 12,648
Bluegreen Corp. (a) 2,415 42,625
Boston Properties, Inc., REIT 600 42,540
Brandywine Realty Trust, REIT 600 18,654
CapitaLand Ltd. 125,000 232,238
Cousins Properties, Inc., REIT 490 14,808
EastGroup Properties, Inc., REIT 560 24,500
Equity Office Properties Trust, REIT 2,100 68,691
Equity One, Inc., REIT 730 16,972
Franklin Street Properties Corp., REIT 197 3,227
Getty Realty Corp., REIT 590 16,980
Host Marriott Corp., REIT 5,500 92,950
SHARES VALUE ($)
- ----------------------------------------------------------------------
Kimco Realty Corp., REIT 19,122 600,813
Mid-America Apartment Communities,
Inc., REIT 620 28,836
Mitsui Fudosan Co., Ltd. 4,000 60,608
Nationwide Health Properties, Inc.,
REIT 480 11,184
ProLogis Trust, REIT 2,200 97,482
PS Business Parks, Inc., REIT 640 29,312
Strategic Hotel Capital, Inc., REIT 1,536 28,047
Sun Hung Kai Properties Ltd. 21,000 217,339
Swire Pacific Ltd., Class A 35,000 322,858
Tanger Factory Outlet Centers, Inc.,
REIT 670 18,633
Universal Health Realty Income Trust,
REIT 330 10,973
Urstadt Biddle Properties, Inc., Class A,
REIT 710 10,764
Washington REIT 550 17,110
-------------
Real Estate Total 3,268,334
THRIFTS & MORTGAGE FINANCE - 0.3%
Countrywide Financial Corp. 11,316 373,201
Golden West Financial Corp. 7,300 433,547
PMI Group, Inc. 2,300 91,701
Sovereign Bancorp, Inc. 4,000 88,160
-------------
Thrifts & Mortgage Finance Total 986,609
-------------
FINANCIALS TOTAL 49,040,315
HEALTH CARE - 8.2%
BIOTECHNOLOGY - 0.7%
Abgenix, Inc. (a) 1,250 15,850
Amgen, Inc. (a) 20,080 1,599,773
Arena Pharmaceuticals, Inc. (a) 1,110 10,989
AtheroGenics, Inc. (a) 1,690 27,091
CV Therapeutics, Inc. (a) 1,540 41,195
Exelixis, Inc. (a) 4,180 32,061
Human Genome Sciences, Inc. (a) 1,930 26,229
Illumina, Inc. (a) 3,330 42,657
Martek Biosciences Corp. (a) 530 18,619
Medarex, Inc. (a) 1,530 14,566
MedImmune, Inc. (a) 2,290 77,058
Neurocrine Biosciences, Inc. (a) 1,640 80,672
Protein Design Labs, Inc. (a) 26,290 736,120
Vertex Pharmaceuticals, Inc. (a) 1,480 33,078
-------------
Biotechnology Total 2,755,958
HEALTH CARE EQUIPMENT & SUPPLIES - 1.9%
Advanced Neuromodulation Systems,
Inc. (a) 520 24,679
Alcon, Inc. 4,280 547,326
American Medical Systems Holdings,
Inc. (a) 3,980 80,197
Analogic Corp. 240 12,098
Aspect Medical Systems, Inc. (a) 1,900 56,297
Baxter International, Inc. 35,190 1,403,025
Bio-Rad Laboratories, Inc., Class A (a) 290 15,947
Biomet, Inc. 3,370 116,973
32 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE EQUIPMENT & SUPPLIES - (CONTINUED)
DENTSPLY International, Inc. 1,150 62,123
Foxhollow Technologies, Inc. (a) 250 11,903
Gen-Probe, Inc. (a) 2,620 129,559
GN Store Nord A/S 19,000 251,042
Greatbatch, Inc. (a) 474 13,007
Haemonetics Corp. (a) 420 19,963
Hologic, Inc. (a) 290 16,747
Hospira, Inc. (a) 1,000 40,970
Immucor, Inc. (a) 2,810 77,106
Intuitive Surgical, Inc. (a) 500 36,645
Invacare Corp. 460 19,168
Kinetic Concepts, Inc. (a) 1,380 78,384
Kyphon, Inc. (a) 1,440 63,274
Medtronic, Inc. 26,950 1,445,059
Meridian Bioscience, Inc. 1,100 22,770
Millipore Corp. (a) 800 50,312
Nektar Therapeutics (a) 4,980 84,411
ResMed, Inc. (a) 1,328 105,775
Respironics, Inc. (a) 1,000 42,180
Somanetics Corp. (a) 600 15,000
SonoSite, Inc. (a) 1,350 40,068
STERIS Corp. 840 19,984
Sybron Dental Specialties, Inc. (a) 470 19,543
Terumo Corp. 3,600 116,220
Thermo Electron Corp. (a) 41,590 1,285,131
Varian Medical Systems, Inc. (a) 24,680 975,107
Varian, Inc. (a) 250 8,580
Viasys Healthcare, Inc. (a) 400 9,996
Vital Signs, Inc. 200 9,218
Waters Corp. (a) 1,660 69,056
-------------
Health Care Equipment & Supplies Total 7,394,843
HEALTH CARE PROVIDERS & SERVICES - 1.6%
Aetna, Inc. 11,010 948,401
Allion Healthcare, Inc. (a) 920 16,569
Apria Healthcare Group, Inc. (a) 980 31,272
Caremark Rx, Inc. (a) 22,000 1,098,460
Centene Corp. (a) 3,670 91,860
Cerner Corp. (a) 1,020 88,669
CIGNA Corp. 5,300 624,658
Community Health Systems, Inc. (a) 3,610 140,104
Coventry Health Care, Inc. (a) 2,180 187,524
Cross Country Healthcare, Inc. (a) 1,060 19,674
DaVita, Inc. (a) 3,330 153,413
Genesis HealthCare Corp. (a) 550 22,176
Gentiva Health Services, Inc. (a) 960 17,395
Health Management Associates, Inc.,
Class A 2,660 62,430
HealthExtras, Inc. (a) 957 20,461
Henry Schein, Inc. (a) 1,560 66,487
Hooper Holmes, Inc. 1,830 7,192
SHARES VALUE ($)
- ----------------------------------------------------------------------
Humana, Inc. (a) 2,650 126,882
Kindred Healthcare, Inc. (a) 980 29,204
Laboratory Corp. of America
Holdings (a) 2,330 113,494
LifePoint Hospitals, Inc. (a) 1,490 65,158
Medco Health Solutions, Inc. (a) 1,200 65,796
Owens & Minor, Inc. 490 14,382
PAREXEL International Corp. (a) 900 18,081
Pediatrix Medical Group, Inc. (a) 790 60,688
PRA International (a) 750 22,732
Psychiatric Solutions, Inc. (a) 180 9,761
Quest Diagnostics, Inc. 1,300 65,702
RehabCare Group, Inc. (a) 25 513
Res-Care, Inc. (a) 970 14,928
Symbion, Inc. (a) 630 16,298
Triad Hospitals, Inc. (a) 1,000 45,270
United Surgical Partners
International, Inc. (a) 2,550 99,730
UnitedHealth Group, Inc. 31,270 1,757,374
VCA Antech, Inc. (a) 6,551 167,182
-------------
Health Care Providers & Services Total 6,289,920
PHARMACEUTICALS - 4.0%
Abbott Laboratories 28,160 1,193,984
Allergan, Inc. 1,390 127,352
Amylin Pharmaceuticals, Inc. (a) 17,561 610,947
Astellas Pharma, Inc. 3,100 116,574
AstraZeneca PLC 7,377 344,903
AstraZeneca PLC, ADR 16,700 786,570
Connetics Corp. (a) 1,520 25,703
Eisai Co., Ltd. 4,000 171,540
Endo Pharmaceuticals
Holdings, Inc. (a) 2,710 72,276
Forest Laboratories, Inc. (a) 2,140 83,396
GlaxoSmithKline PLC 26,240 668,110
GlaxoSmithKline PLC, ADR 8,218 421,419
IVAX Corp. (a) 26,230 691,423
Johnson & Johnson 43,840 2,774,195
Medicis Pharmaceutical Corp., Class A 5,000 162,800
MGI Pharma, Inc. (a) 1,560 36,364
New River Pharmaceuticals, Inc. (a) 490 23,491
Novartis AG, ADR 47,470 2,420,970
Novartis AG, Registered Shares 8,197 416,013
Par Pharmaceutical Companies, Inc. (a) 670 17,835
Penwest Pharmaceuticals Co. (a) 1,805 31,642
Pfizer, Inc. 38,933 972,157
Roche Holding AG, Genusschein 2,256 313,633
Salix Pharmaceuticals Ltd. (a) 1,790 38,037
Sanofi-Aventis 5,005 414,173
Shire Pharmaceuticals Group PLC, ADR 4,030 149,070
Takeda Pharmaceutical Co., Ltd. 6,200 369,548
Teva Pharmaceutical Industries
Ltd., ADR 39,970 1,335,797
Wyeth 10,610 490,925
-------------
Pharmaceuticals Total 15,280,847
-------------
HEALTH CARE TOTAL 31,721,568
See Accompanying Notes to Financial Statements. | 33
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - 6.7%
AEROSPACE & DEFENSE - 1.0%
AAR Corp. (a) 1,030 17,695
Armor Holdings, Inc. (a) 1,730 74,407
Aviall, Inc. (a) 500 16,890
DRS Technologies, Inc. 330 16,289
Esterline Technologies Corp. (a) 710 26,902
General Dynamics Corp. 9,364 1,119,466
Goodrich Corp. 1,800 79,812
Honeywell International, Inc. 25,540 957,750
Kaman Corp., Class A 430 8,794
L-3 Communications Holdings, Inc. 1,530 120,977
Moog, Inc., Class A (a) 240 7,085
Northrop Grumman Corp. 1,200 65,220
Precision Castparts Corp. 840 44,604
Rockwell Collins, Inc. 2,700 130,464
Singapore Technologies Engineering Ltd. 98,000 147,132
Teledyne Technologies, Inc. (a) 1,890 65,148
United Technologies Corp. 20,680 1,072,051
-------------
Aerospace & Defense Total 3,970,686
AIR FREIGHT & LOGISTICS - 0.2%
C.H. Robinson Worldwide, Inc. 1,990 127,599
Deutsche Post AG, Registered Shares 5,400 126,392
HUB Group, Inc., Class A (a) 3,237 118,830
Ryder System, Inc. 330 11,293
UTI Worldwide, Inc. 2,830 219,891
-------------
Air Freight & Logistics Total 604,005
AIRLINES - 0.0%
AirTran Holdings, Inc. (a) 2,370 30,004
Frontier Airlines, Inc. (a) 1,570 15,355
MAIR Holdings, Inc. (a) 534 3,113
Skywest, Inc. 770 20,651
Southwest Airlines Co. 5,090 75,587
-------------
Airlines Total 144,710
BUILDING PRODUCTS - 0.5%
American Standard Companies, Inc. 33,630 1,565,477
NCI Building Systems, Inc. (a) 640 26,106
Nippon Sheet Glass Co., Ltd. 32,000 144,870
-------------
Building Products Total 1,736,453
COMMERCIAL SERVICES & SUPPLIES - 0.5%
ABM Industries, Inc. 770 16,024
Avery Dennison Corp. 900 47,151
Casella Waste Systems, Inc., Class A (a) 1,610 21,139
CBIZ, Inc. (a) 970 4,947
ChoicePoint, Inc. (a) 3,460 149,368
Cintas Corp. 1,420 58,291
Consolidated Graphics, Inc. (a) 720 30,996
Corporate Executive Board Co. 2,940 229,261
Healthcare Services Group, Inc. 892 17,171
John H. Harland Co. 310 13,764
Korn/Ferry International (a) 2,438 39,959
Labor Ready, Inc. (a) 2,405 61,688
SHARES VALUE ($)
- ----------------------------------------------------------------------
Manpower, Inc. 1,000 44,390
Mine Safety Appliances Co. 1,290 49,923
Navigant Consulting, Inc. (a) 770 14,753
NCO Group, Inc. (a) 690 14,255
Pitney Bowes, Inc. 1,600 66,784
Randstad Holding NV 3,500 134,479
Resources Connection, Inc. (a) 1,420 42,075
Robert Half International, Inc. 6,250 222,438
Securitas AB, Class B 6,800 105,248
Senomyx, Inc. (a) 1,519 25,869
Sourcecorp, Inc. (a) 490 10,506
Strayer Education, Inc. 220 20,794
TeleTech Holdings, Inc. (a) 1,520 15,230
United Stationers, Inc. (a) 360 17,230
Waste Connections, Inc. (a) 2,300 80,684
Waste Management, Inc. 14,110 403,687
-------------
Commercial Services & Supplies Total 1,958,104
CONSTRUCTION & ENGINEERING - 0.3%
Dycom Industries, Inc. (a) 920 18,602
EMCOR Group, Inc. (a) 240 14,232
Fluor Corp. 800 51,504
Jacobs Engineering Group, Inc. (a) 2,990 201,526
Shaw Group, Inc. (a) 3,800 93,708
Shimizu Corp. 45,000 296,858
Vinci SA 5,120 441,323
Washington Group International, Inc. (a) 460 24,790
-------------
Construction & Engineering Total 1,142,543
ELECTRICAL EQUIPMENT - 0.5%
ABB Ltd. (a) 24,400 178,689
Cooper Industries Ltd., Class A 800 55,312
Evergreen Solar, Inc. (a) 3,320 30,976
Genlyte Group, Inc. (a) 550 26,444
Mitsubishi Electric Corp. 43,000 276,748
Rockwell Automation, Inc. 24,050 1,272,245
Shanghai Electric Group Co.,
Ltd., Class H (a) 490,000 165,815
Woodward Governor Co. 270 22,963
-------------
Electrical Equipment Total 2,029,192
INDUSTRIAL CONGLOMERATES - 2.0%
3M Co. 12,430 911,865
General Electric Co. 138,287 4,656,123
Hutchison Whampoa Ltd. 22,000 228,232
Keppel Corp., Ltd. 15,000 112,772
SembCorp Industries Ltd. 79,900 141,874
Siemens AG, Registered Shares 2,187 168,572
Smiths Group PLC 13,533 229,001
Textron, Inc. 16,925 1,213,861
Walter Industries, Inc. 410 20,057
-------------
Industrial Conglomerates Total 7,682,357
MACHINERY - 1.3%
Actuant Corp., Class A 550 25,740
AGCO Corp. (a) 2,300 41,860
Atlas Copco AB, Class B 15,300 264,663
Briggs & Stratton Corp. 260 8,993
34 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
MACHINERY - (CONTINUED)
Bucyrus International, Inc., Class A 800 39,304
Caterpillar, Inc. 14,700 863,625
Clarcor, Inc. 580 16,658
Dover Corp. 1,700 69,343
Eaton Corp. 10,445 663,780
EnPro Industries, Inc. (a) 780 26,278
ESCO Technologies, Inc. (a) 460 23,032
Harsco Corp. 550 36,063
Ingersoll-Rand Co., Ltd., Class A 20,000 764,600
ITT Industries, Inc. 6,980 792,928
JLG Industries, Inc. 740 27,077
Joy Global, Inc. 2,980 150,371
Kadant, Inc. (a) 337 6,760
Kennametal, Inc. 1,000 49,040
Komatsu Ltd. 24,000 330,436
Manitowoc Co., Inc. 420 21,105
Parker Hannifin Corp. 1,100 70,741
Pentair, Inc. 14,270 520,855
Terex Corp. (a) 3,840 189,811
THK Co., Ltd. 3,800 94,946
Wabtec Corp. 2,810 76,657
-------------
Machinery Total 5,174,666
MARINE - 0.1%
Kawasaki Kisen Kaisha Ltd. 25,000 181,422
-------------
Marine Total 181,422
ROAD & RAIL - 0.2%
Burlington Northern Santa Fe Corp. 900 53,820
Canadian Pacific Railway Ltd. 5,400 232,704
ComfortDelGro Corp., Ltd. 94,000 83,594
Dollar Thrifty Automotive
Group, Inc. (a) 240 8,081
East Japan Railway Co. 37 211,823
Florida East Coast Industries, Inc. 940 42,573
Landstar System, Inc. 1,200 48,036
Norfolk Southern Corp. 2,500 101,400
Werner Enterprises, Inc. 1,230 21,267
-------------
Road & Rail Total 803,298
TRADING COMPANIES & DISTRIBUTORS - 0.1%
Hughes Supply, Inc. 380 12,388
Mitsubishi Corp. 17,400 345,790
United Rentals, Inc. (a) 2,100 41,391
Watsco, Inc. 850 45,143
Wolseley PLC 5,100 107,919
-------------
Trading Companies & Distributors Total 552,631
-------------
INDUSTRIALS TOTAL 25,980,067
INFORMATION TECHNOLOGY - 10.4%
COMMUNICATIONS EQUIPMENT - 1.7%
Adtran, Inc. 1,050 33,075
Anaren, Inc. (a) 1,340 18,894
Andrew Corp. (a) 3,500 39,025
SHARES VALUE ($)
- ----------------------------------------------------------------------
AudioCodes Ltd. (a) 4,360 48,004
Avocent Corp. (a) 1,260 39,866
Belden CDT, Inc. 470 9,132
Black Box Corp. 300 12,588
C-COR, Inc. (a) 1,480 9,990
Cisco Systems, Inc. (a) 97,545 1,748,982
Comverse Technology, Inc. (a) 6,420 168,653
Corning, Inc. (a) 19,360 374,229
Emulex Corp. (a) 630 12,732
F5 Networks, Inc. (a) 2,140 93,026
Harris Corp. 1,090 45,562
Juniper Networks, Inc. (a) 19,180 456,292
Motorola, Inc. 43,560 962,240
NICE Systems Ltd., ADR (a) 960 43,373
Nokia Oyj 13,150 221,737
Nokia Oyj, ADR 38,770 655,601
Packeteer, Inc. (a) 3,460 43,423
Plantronics, Inc. 630 19,410
QUALCOMM, Inc. 19,430 869,493
SiRF Technology Holdings, Inc. (a) 1,405 42,333
Tandberg ASA 8,700 116,581
Telefonaktiebolaget LM Ericsson,
ADR 8,300 305,772
Tollgrade Communications, Inc. (a) 780 6,599
-------------
Communications Equipment Total 6,396,612
COMPUTERS & PERIPHERALS - 2.1%
Apple Computer, Inc. (a) 10,590 567,730
Dell, Inc. (a) 40,755 1,393,821
Electronics for Imaging, Inc. (a) 780 17,893
EMC Corp. (a) 47,320 612,321
FUJITSU Ltd. 10,000 65,936
Hewlett-Packard Co. 72,920 2,129,264
Imation Corp. 380 16,291
Intergraph Corp. (a) 290 12,966
International Business Machines Corp. 34,246 2,747,214
M-Systems Flash Disk Pioneers Ltd. (a) 1,880 56,250
NCR Corp. (a) 328 10,466
Neoware Systems, Inc. (a) 1,985 33,229
SanDisk Corp. (a) 4,480 216,160
Stratasys, Inc. (a) 1,060 31,482
Toshiba Corp. 33,000 146,214
-------------
Computers & Peripherals Total 8,057,237
ELECTRONIC EQUIPMENT & INSTRUMENTS - 0.5%
Agilent Technologies, Inc. (a) 20,300 664,825
Agilysys, Inc. 600 10,104
Anixter International, Inc. (a) 1,650 66,544
Arrow Electronics, Inc. (a) 2,700 84,672
AVX Corp. 2,525 32,168
Benchmark Electronics, Inc. (a) 610 18,373
Brightpoint, Inc. (a) 1,695 32,442
Daktronics, Inc. 2,110 50,598
Flextronics International Ltd. (a) 3,300 42,405
Flir Systems, Inc. (a) 730 21,593
Global Imaging Systems, Inc. (a) 1,629 55,467
Hoya Corp. 2,800 93,456
Hoya Corp. W/I (a)(f) 3,600 122,324
Ingram Micro, Inc., Class A (a) 3,000 55,620
See Accompanying Notes to Financial Statements. | 35
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
ELECTRONIC EQUIPMENT & INSTRUMENTS - (CONTINUED)
Itron, Inc. (a) 1,030 47,030
Mettler-Toledo International, Inc. (a) 1,400 71,372
MTS Systems Corp. 540 20,396
Murata Manufacturing Co., Ltd. 3,500 196,235
Omron Corp. 6,500 158,675
Plexus Corp. (a) 3,500 59,815
TDK Corp. 2,000 143,452
Tektronix, Inc. 1,900 47,937
Vishay Intertechnology, Inc. (a) 1,630 19,479
-------------
Electronic Equipment & Instruments Total 2,114,982
INTERNET SOFTWARE & SERVICES - 0.6%
CNET Networks, Inc. (a) 1,720 23,340
Digital River, Inc. (a) 930 32,410
Digitas, Inc. (a) 6,360 72,250
EarthLink, Inc. (a) 2,510 26,857
Equinix, Inc. (a) 260 10,829
Google, Inc., Class A (a) 2,200 696,212
InfoSpace, Inc. (a) 360 8,593
Keynote Systems, Inc. (a) 372 4,829
Openwave Systems, Inc. (a) 1,100 19,778
Secure Computing Corp. (a) 3,820 43,357
ValueClick, Inc. (a) 1,490 25,464
VeriSign, Inc. (a) 4,320 92,318
Yahoo!, Inc. (a) 39,340 1,331,266
-------------
Internet Software & Services Total 2,387,503
IT SERVICES - 0.2%
Acxiom Corp. 720 13,478
Affiliated Computer Services, Inc.,
Class A (a) 1,520 82,992
Alliance Data Systems Corp. (a) 3,420 133,893
Anteon International Corp. (a) 1,670 71,409
Cognizant Technology Solutions
Corp., Class A (a) 3,340 155,611
Euronet Worldwide, Inc. (a) 1,390 41,130
Fiserv, Inc. (a) 1,780 81,649
Global Payments, Inc. 1,250 97,150
MAXIMUS, Inc. 330 11,798
MPS Group, Inc. (a) 3,740 44,132
MTC Technologies, Inc. (a) 930 29,741
Paychex, Inc. 2,130 78,980
Sykes Enterprises, Inc. (a) 3,550 42,245
-------------
IT Services Total 884,208
OFFICE ELECTRONICS - 0.1%
Canon, Inc. 3,700 200,457
-------------
Office Electronics Total 200,457
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.5%
Advantest Corp. 1,400 108,537
Altera Corp. (a) 2,120 40,513
ASML Holding NV (a) 9,900 162,885
ATI Technologies, Inc. (a) 2,200 30,668
SHARES VALUE ($)
- ----------------------------------------------------------------------
ATMI, Inc. (a) 500 15,500
Broadcom Corp., Class A (a) 17,870 838,282
Cymer, Inc. (a) 1,610 50,425
Cypress Semiconductor Corp. (a) 10,540 158,627
Entegris, Inc. (a) 5,977 67,540
Exar Corp. (a) 930 13,039
Fairchild Semiconductor
International, Inc. (a) 25,980 386,063
Intel Corp. 80,397 1,981,786
Intersil Corp., Class A 3,800 82,764
KLA-Tencor Corp. 1,220 59,487
Lam Research Corp. (a) 300 9,141
Marvell Technology Group Ltd. (a) 8,860 408,534
MEMC Electronic Materials, Inc. (a) 57,520 1,310,881
Microchip Technology, Inc. 18,090 544,871
Microsemi Corp. (a) 3,354 85,661
National Semiconductor Corp. 2,300 60,490
NVIDIA Corp. (a) 1,910 65,475
Samsung Electronics Co., Ltd., GDR 876 249,673
Semtech Corp. (a) 2,500 41,175
Sigmatel, Inc. (a) 390 7,894
Silicon Laboratories, Inc. (a) 1,220 37,076
Skyworks Solutions, Inc. (a) 4,640 32,573
Standard Microsystems Corp. (a) 820 24,526
Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 139,780 1,148,991
Tessera Technologies, Inc. (a) 2,370 70,887
Texas Instruments, Inc. 49,850 1,689,915
Virage Logic Corp. (a) 5,880 45,570
-------------
Semiconductors & Semiconductor Equipment Total 9,829,449
SOFTWARE - 2.7%
Activision, Inc. (a) 1,300 26,585
Amdocs Ltd. (a) 2,900 80,417
American Reprographics Co. (a) 1,106 18,913
Ansys, Inc. (a) 1,523 58,620
Autodesk, Inc. 21,939 1,018,847
Cadence Design Systems, Inc. (a) 1,500 24,240
Captaris, Inc. (a) 1,900 7,144
Check Point Software
Technologies Ltd. (a) 3,880 94,362
Citrix Systems, Inc. (a) 4,900 123,186
Cognos, Inc. (a) 5,700 221,901
Electronic Arts, Inc. (a) 13,090 744,690
Epicor Software Corp. (a) 2,640 34,320
Hyperion Solutions Corp. (a) 3,360 163,464
Internet Security Systems, Inc. (a) 850 20,409
Kronos, Inc. (a) 790 35,266
Lawson Software, Inc. (a) 1,830 12,700
Macrovision Corp. (a) 610 11,651
McAfee, Inc. (a) 19,400 609,548
Mercury Interactive Corp. (a) 2,220 87,912
Micros Systems, Inc. (a) 470 20,563
Microsoft Corp. 136,280 3,506,484
MSC.Software Corp. (a) 1,210 19,021
NAVTEQ (a) 12,430 620,878
Open Solutions, Inc. (a) 1,880 41,022
36 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
SOFTWARE - (CONTINUED)
Oracle Corp. (a) 52,090 645,395
Parametric Technology Corp. (a) 4,010 27,950
Phoenix Technologies Ltd. (a) 1,269 9,556
PLATO Learning, Inc. (a) 1,400 10,654
Progress Software Corp. (a) 2,810 89,274
Quest Software, Inc. (a) 2,150 32,400
RSA Security, Inc. (a) 2,300 29,233
Sage Group PLC 37,000 150,575
SAP AG 1,207 208,735
SAP AG, ADR 34,310 1,486,652
SeaChange International, Inc. (a) 380 2,417
Sybase, Inc. (a) 780 18,268
Synopsys, Inc. (a) 600 11,340
THQ, Inc. (a) 760 16,203
TIBCO Software, Inc. (a) 500 4,180
Transaction Systems
Architects, Inc., Class A (a) 910 25,343
-------------
Software Total 10,370,318
-------------
INFORMATION TECHNOLOGY TOTAL 40,240,766
MATERIALS - 2.3%
CHEMICALS - 1.5%
Air Products & Chemicals, Inc. 19,585 1,079,917
Airgas, Inc. 1,460 43,260
Ashland, Inc. 700 38,668
BASF AG 4,378 329,165
Bayer AG 6,900 253,151
Celanese Corp., Series A 3,400 58,650
Cytec Industries, Inc. 430 18,653
Eastman Chemical Co. 800 37,576
Ecolab, Inc. 1,960 62,583
Engelhard Corp. 1,900 53,029
Georgia Gulf Corp. 460 11,077
H.B. Fuller Co. 640 19,891
Lubrizol Corp. 2,100 90,993
Minerals Technologies, Inc. 330 18,879
Nalco Holding Co. (a) 2,900 48,923
Potash Corp. of Saskatchewan, Inc. 2,550 237,966
PPG Industries, Inc. 5,577 330,103
Praxair, Inc. 36,700 1,759,031
Rohm and Haas Co. 1,800 74,034
Schulman (A.), Inc. 860 15,437
Sensient Technologies Corp. 550 10,422
Shin-Etsu Chemical Co., Ltd. 5,000 219,149
Solvay SA 1,100 128,003
Stepan Co. 460 11,528
Sumitomo Chemical Co., Ltd. 47,000 292,094
Symyx Technologies, Inc. (a) 2,580 67,390
Syngenta AG (a) 2,156 225,911
Teijin Ltd. 29,000 169,925
SHARES VALUE ($)
- ----------------------------------------------------------------------
UAP Holding Corp. 460 8,326
Yara International ASA 8,400 151,749
-------------
Chemicals Total 5,865,483
CONSTRUCTION MATERIALS - 0.1%
Cemex SA de CV, ADR 1,600 83,680
Eagle Materials, Inc. 1,250 151,712
Martin Marietta Materials, Inc. 1,025 80,422
-------------
Construction Materials Total 315,814
CONTAINERS & PACKAGING - 0.1%
AptarGroup, Inc. 320 15,939
Bemis Co., Inc. 2,600 64,220
Crown Holdings, Inc. (a) 2,800 44,632
Greif, Inc., Class A 540 32,454
-------------
Containers & Packaging Total 157,245
METALS & MINING - 0.3%
Allegheny Technologies, Inc. 900 27,882
AMCOL International Corp. 1,570 29,940
Anglo American PLC 10,000 298,266
Carpenter Technology Corp. 340 19,927
Cleveland-Cliffs, Inc. 320 27,875
Foundation Coal Holdings, Inc. 880 33,836
Freeport-McMoRan Copper &
Gold, Inc., Class B 3,200 155,488
Inco Ltd. 1,910 90,438
Metal Management, Inc. 700 17,745
Nucor Corp. 1,300 76,687
Phelps Dodge Corp. 1,280 166,310
Quanex Corp. 290 19,204
Reliance Steel & Aluminum Co. 390 20,643
Rio Tinto PLC 6,500 266,464
RTI International Metals, Inc. (a) 480 18,888
Worthington Industries, Inc. 1,290 27,129
-------------
Metals & Mining Total 1,296,722
PAPER & FOREST PRODUCTS - 0.3%
Georgia-Pacific Corp. 2,500 85,150
Glatfelter 1,260 17,753
MeadWestvaco Corp. 33,141 915,355
Mercer International, Inc. (a) 1,660 13,728
-------------
Paper & Forest Products Total 1,031,986
-------------
MATERIALS TOTAL 8,667,250
TELECOMMUNICATION SERVICES - 1.5%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.9%
BellSouth Corp. 23,999 631,174
Deutsche Telekom AG, Registered
Shares 17,553 319,560
France Telecom SA 5,600 161,029
Nippon Telegraph & Telephone Corp. 32 158,201
North Pittsburgh Systems, Inc. 580 11,838
Qwest Communications
International, Inc. (a) 1 4
SBC Communications, Inc. 40,152 962,443
See Accompanying Notes to Financial Statements. | 37
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
TELECOMMUNICATION SERVICES - (CONTINUED)
DIVERSIFIED TELECOMMUNICATION SERVICES - (CONTINUED)
TALK America Holdings, Inc. (a) 642 6,054
Tekelec (a) 473 9,909
Telekom Austria AG 8,900 177,190
Verizon Communications, Inc. 37,485 1,225,384
-------------
Diversified Telecommunication Services Total 3,662,786
WIRELESS TELECOMMUNICATION SERVICES - 0.6%
Alamosa Holdings, Inc. (a) 2,260 38,669
American Tower Corp., Class A (a) 8,624 215,169
China Mobile Hong Kong Ltd. 29,500 145,177
Crown Castle International Corp. (a) 4,830 118,963
Dobson Communications Corp.,
Class A (a) 1,960 15,053
Jamdat Mobile, Inc. (a) 190 3,990
Millicom International Cellular SA (a) 6,435 118,533
NII Holdings, Inc. (a) 910 76,849
NTT DoCoMo, Inc. 83 148,667
O2 PLC 45,200 125,775
Price Communications Corp. (a) 674 11,087
SBA Communications Corp., Class A (a) 3,599 55,604
SpectraLink Corp. 1,801 22,963
Telephone & Data Systems, Inc. 1,000 39,000
Telephone & Data Systems, Inc.,
Special Shares 1,000 37,550
VimpelCom, ADR (a) 1,290 57,328
Vodafone Group PLC 409,700 1,066,639
-------------
Wireless Telecommunication Services Total 2,297,016
-------------
TELECOMMUNICATION SERVICES TOTAL 5,959,802
UTILITIES - 2.1%
ELECTRIC UTILITIES - 1.2%
ALLETE, Inc. 330 15,117
American Electric Power Co., Inc. 11,619 461,274
Central Vermont Public Service Corp. 810 14,175
E.ON AG 3,879 356,771
Edison International 11,300 534,264
El Paso Electric Co. (a) 920 19,182
Entergy Corp. 9,157 680,548
Exelon Corp. 16,847 900,304
Fortum Oyj 9,200 184,656
FPL Group, Inc. 11,704 557,111
Hawaiian Electric Industries, Inc. 1,700 47,396
Maine & Maritimes Corp. 180 3,546
MGE Energy, Inc. 320 11,683
Otter Tail Corp. 460 14,233
PPL Corp. 1,800 58,194
Puget Energy, Inc. 790 18,549
Reliant Energy, Inc. (a) 3,600 55,584
Scottish & Southern Energy PLC 17,400 315,916
Tokyo Electric Power Co., Inc. 10,200 257,782
-------------
Electric Utilities Total 4,506,285
SHARES VALUE ($)
- ----------------------------------------------------------------------
GAS UTILITIES - 0.1%
AGL Resources, Inc. 1,200 44,532
Cascade Natural Gas Corp. 350 7,620
Energen Corp. 1,970 85,222
Northwest Natural Gas Co. 260 9,677
Tokyo Gas Co., Ltd. 54,000 219,786
WGL Holdings, Inc. 280 8,996
-------------
Gas Utilities Total 375,833
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS - 0.3%
AES Corp. (a) 13,170 216,383
Constellation Energy Group, Inc. 2,000 123,200
TXU Corp. 7,385 833,619
-------------
Independent Power Producers &
Energy Traders Total 1,173,202
MULTI-UTILITIES - 0.5%
CH Energy Group, Inc. 550 26,114
Dominion Resources, Inc. 5,769 496,942
Energy East Corp. 2,300 57,937
PG&E Corp. 16,458 645,977
RWE AG 4,000 264,806
Sempra Energy 1,400 65,884
Veolia Environnement 9,800 414,090
-------------
Multi-Utilities Total 1,971,750
-------------
UTILITIES TOTAL 8,027,070
Total Common Stocks
(cost of $203,521,657) 242,589,778
PAR ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - 11.9%
BASIC MATERIALS - 0.4%
CHEMICALS - 0.2%
Airgas, Inc.
6.250% 07/15/14 5,000 5,075
9.125% 10/01/11 250,000 269,375
EquiStar Chemicals LP
10.125% 09/01/08 25,000 27,000
10.625% 05/01/11 85,000 92,650
Nalco Co.
7.750% 11/15/11 115,000 118,163
NOVA Chemicals Corp.
6.500% 01/15/12 85,000 83,300
-------------
Chemicals Total 595,563
FOREST PRODUCTS & PAPER - 0.1%
Boise Cascade LLC
7.125% 10/15/14 190,000 180,025
International Paper Co.
4.250% 01/15/09 375,000 366,289
-------------
Forest Products & Paper Total 546,314
38 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
BASIC MATERIALS - (CONTINUED)
IRON/STEEL - 0.0%
Russel Metals, Inc.
6.375% 03/01/14 130,000 126,100
United States Steel Corp.
9.750% 05/15/10 40,000 43,750
-------------
Iron/Steel Total 169,850
METALS & MINING - 0.1%
Alcan, Inc.
4.500% 05/15/13 400,000 385,536
-------------
Metals & Mining Total 385,536
-------------
BASIC MATERIALS TOTAL 1,697,263
COMMUNICATIONS - 1.4%
ADVERTISING - 0.1%
Lamar Media Corp.
7.250% 01/01/13 340,000 357,000
-------------
Advertising Total 357,000
MEDIA - 0.6%
Dex Media West LLC
5.875% 11/15/11 205,000 202,950
9.875% 08/15/13 85,000 93,925
DirecTV Holdings LLC
6.375% 06/15/15 (b) 10,000 9,850
8.375% 03/15/13 229,000 250,755
EchoStar DBS Corp.
5.750% 10/01/08 210,000 207,637
6.625% 10/01/14 40,000 39,700
Emmis Operating Co.
6.875% 05/15/12 85,000 84,788
Jones Intercable, Inc.
7.625% 04/15/08 525,000 558,721
LIN Television Corp.
6.500% 05/15/13 175,000 165,375
R.H. Donnelley Finance Corp.
10.875% 12/15/12 (b) 180,000 202,050
Rogers Cable, Inc.
6.250% 06/15/13 225,000 219,375
7.875% 05/01/12 35,000 37,275
Time Warner, Inc.
6.625% 05/15/29 425,000 444,516
-------------
Media Total 2,516,917
TELECOMMUNICATION SERVICES - 0.7%
Citizens Communications Co.
9.000% 08/15/31 60,000 60,975
Deutsche Telekom International Finance BV
8.500% 06/15/10 400,000 451,852
New Cingular Wireless Services, Inc.
8.750% 03/01/31 225,000 302,585
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
Nextel Communications, Inc.
5.950% 03/15/14 20,000 20,500
7.375% 08/01/15 100,000 107,250
Rogers Wireless, Inc.
7.500% 03/15/15 110,000 118,525
8.000% 12/15/12 90,000 94,950
Sprint Capital Corp.
6.875% 11/15/28 275,000 303,396
Verizon Global Funding Corp.
7.750% 12/01/30 700,000 852,726
Vodafone Group PLC
7.750% 02/15/10 225,000 250,859
-------------
Telecommunication Services Total 2,563,618
-------------
COMMUNICATIONS TOTAL 5,437,535
CONSUMER CYCLICAL - 1.4%
AIRLINES - 0.3%
United Airlines, Inc.
7.032% 10/01/10(c) 585,035 568,947
9.200% 03/22/08(d) 1,014,042 507,021
-------------
Airlines Total 1,075,968
AUTO MANUFACTURERS - 0.1%
DaimlerChrysler NA Holding Corp.
8.500% 01/18/31 225,000 272,734
-------------
Auto Manufacturers Total 272,734
AUTO PARTS & EQUIPMENT - 0.0%
Accuride Corp.
8.500% 02/01/15 85,000 83,300
TRW Automotive, Inc.
9.375% 02/15/13 55,000 59,675
-------------
Auto Parts & Equipment Total 142,975
ENTERTAINMENT - 0.1%
Cinemark USA, Inc.
9.000% 02/01/13 165,000 171,187
Speedway Motorsports, Inc.
6.750% 06/01/13 167,000 171,384
Warner Music Group
7.375% 04/15/14 125,000 125,781
-------------
Entertainment Total 468,352
HOME BUILDERS - 0.1%
Beazer Homes USA
6.875% 07/15/15 (b) 115,000 111,406
K. Hovnanian Enterprises, Inc.
6.000% 01/15/10 60,000 57,450
6.375% 12/15/14 50,000 47,625
6.500% 01/15/14 70,000 67,725
KB Home
8.625% 12/15/08 150,000 162,000
-------------
Home Builders Total 446,206
See Accompanying Notes to Financial Statements. | 39
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
CONSUMER CYCLICAL - (CONTINUED)
HOME FURNISHINGS - 0.0%
Sealy Mattress Co.
8.250% 06/15/14 95,000 94,525
-------------
Home Furnishings Total 94,525
LEISURE TIME - 0.1%
Leslie's Poolmart
7.750% 02/01/13 105,000 106,050
Royal Caribbean Cruises Ltd.
6.750% 03/15/08 80,000 81,900
6.875% 12/01/13 100,000 104,875
8.750% 02/02/11 145,000 163,488
-------------
Leisure Time Total 456,313
LODGING - 0.4%
Caesars Entertainment, Inc.
7.875% 03/15/10 40,000 43,500
8.875% 09/15/08 35,000 38,238
9.375% 02/15/07 35,000 37,013
CCM Merger, Inc.
8.000% 08/01/13 (b) 100,000 101,250
MGM Mirage
6.000% 10/01/09 95,000 93,813
8.500% 09/15/10 245,000 266,437
Starwood Hotels & Resorts
Worldwide, Inc.
7.875% 05/01/12 150,000 165,000
Station Casinos, Inc.
6.500% 02/01/14 345,000 345,862
Wynn Las Vegas LLC
6.625% 12/01/14 175,000 166,687
-------------
Lodging Total 1,257,800
RETAIL - 0.3%
AutoNation, Inc.
9.000% 08/01/08 160,000 172,800
Couche-Tard
7.500% 12/15/13 165,000 170,362
Domino's, Inc.
8.250% 07/01/11 115,000 120,750
Group 1 Automotive, Inc.
8.250% 08/15/13 90,000 90,000
Suburban Propane Partners LP
6.875% 12/15/13 50,000 46,750
Wal-Mart Stores, Inc.
4.000% 01/15/10 600,000 584,640
-------------
Retail Total 1,185,302
-------------
CONSUMER CYCLICAL TOTAL 5,400,175
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CONSUMER NON-CYCLICAL - 1.6%
BEVERAGES - 0.3%
Constellation Brands, Inc.
8.125% 01/15/12 250,000 263,750
Cott Beverages, Inc.
8.000% 12/15/11 295,000 303,850
Diageo Capital PLC
3.375% 03/20/08 550,000 533,984
-------------
Beverages Total 1,101,584
COMMERCIAL SERVICES - 0.2%
Corrections Corp. of America
6.250% 03/15/13 50,000 49,500
7.500% 05/01/11 225,000 232,312
Iron Mountain, Inc.
7.750% 01/15/15 10,000 10,175
8.625% 04/01/13 250,000 262,500
Mac-Gray Corp.
7.625% 08/15/15 (b) 105,000 107,100
Stewart Enterprises, Inc.
6.250% 02/15/13 (b) 95,000 90,250
United Rentals, Inc.
7.000% 02/15/14 90,000 83,250
-------------
Commercial Services Total 835,087
COSMETICS/PERSONAL CARE - 0.1%
Procter & Gamble Co.
4.750% 06/15/07 550,000 552,618
-------------
Cosmetics/Personal Care Total 552,618
FOOD - 0.3%
Del Monte Corp.
6.750% 02/15/15 (b) 130,000 130,650
General Mills, Inc.
2.625% 10/24/06 500,000 490,075
Kroger Co.
6.200% 06/15/12 450,000 472,329
-------------
Food Total 1,093,054
HEALTHCARE PRODUCTS - 0.1%
Baxter FinCo BV
4.750% 10/15/10 (b) 450,000 446,741
-------------
Healthcare Products Total 446,741
HEALTHCARE SERVICES - 0.5%
Community Health Systems
6.500% 12/15/12 40,000 40,100
Coventry Health Care, Inc.
5.875% 01/15/12 175,000 178,938
Extendicare Health Services, Inc.
6.875% 05/01/14 85,000 83,725
9.500% 07/01/10 15,000 16,050
Fisher Scientific International, Inc.
6.750% 08/15/14 165,000 172,425
HCA, Inc.
6.950% 05/01/12 340,000 350,839
Select Medical Corp.
7.625% 02/01/15 90,000 86,400
40 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
CONSUMER NON-CYCLICAL - (CONTINUED)
HEALTHCARE SERVICES - (CONTINUED)
Triad Hospitals, Inc.
7.000% 05/15/12 225,000 231,187
7.000% 11/15/13 30,000 30,375
UnitedHealth Group, Inc.
3.375% 08/15/07 600,000 587,412
-------------
Healthcare Services Total 1,777,451
HOUSEHOLD PRODUCTS/WARES - 0.0%
Scotts Co.
6.625% 11/15/13 175,000 179,375
-------------
Household Products/Wares Total 179,375
PHARMACEUTICALS - 0.1%
AmerisourceBergen Corp.
5.625% 09/15/12 (b) 90,000 89,100
Mylan Laboratories, Inc.
6.375% 08/15/15 (b) 40,000 40,050
Omnicare, Inc.
8.125% 03/15/11 90,000 93,825
-------------
Pharmaceuticals Total 222,975
-------------
CONSUMER NON-CYCLICAL TOTAL 6,208,885
ENERGY - 1.0%
COAL - 0.1%
Peabody Energy Corp.
5.875% 04/15/16 75,000 74,438
6.875% 03/15/13 260,000 271,700
-------------
Coal Total 346,138
OIL & GAS - 0.6%
Chesapeake Energy Corp.
6.375% 06/15/15 150,000 150,938
7.500% 09/15/13 160,000 170,400
7.750% 01/15/15 25,000 26,656
Devon Energy Corp.
7.950% 04/15/32 350,000 447,300
Marathon Oil Corp.
6.800% 03/15/32 375,000 432,131
Newfield Exploration Co.
6.625% 09/01/14 255,000 265,200
Plains Exploration & Production Co.
7.125% 06/15/14 205,000 216,275
Pogo Producing Co.
6.625% 03/15/15 (b) 130,000 131,788
Pride International, Inc.
7.375% 07/15/14 120,000 129,600
Vintage Petroleum, Inc.
7.875% 05/15/11 165,000 172,012
-------------
Oil & Gas Total 2,142,300
OIL & GAS SERVICES - 0.1%
Grant Prideco, Inc.
6.125% 08/15/15 (b) 200,000 202,000
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
Hornbeck Offshore Services, Inc.
6.125% 12/01/14 130,000 129,188
Universal Compression, Inc.
7.250% 05/15/10 155,000 160,812
-------------
Oil & Gas Services Total 492,000
PIPELINES - 0.2%
Kinder Morgan Energy Partners LP
7.300% 08/15/33 500,000 579,890
MarkWest Energy Partners LP
6.875% 11/01/14 (b) 115,000 113,275
Williams Companies, Inc.
7.125% 09/01/11 35,000 36,487
8.125% 03/15/12 205,000 225,500
-------------
Pipelines Total 955,152
-------------
ENERGY TOTAL 3,935,590
FINANCIALS - 3.7%
BANKS - 1.0%
HSBC Capital Funding LP
9.547% 12/31/49 (b)(e) 800,000 951,752
Rabobank Capital Funding II
5.260% 12/31/49 (b)(e) 850,000 866,073
Wachovia Corp.
4.875% 02/15/14 (e) 825,000 816,981
Wells Fargo & Co.
3.874% 03/10/08 (e) 1,050,000 1,049,769
-------------
Banks Total 3,684,575
DIVERSIFIED FINANCIAL SERVICES - 2.1%
American Express Credit Corp.
3.000% 05/16/08 600,000 576,420
Capital One Bank
4.875% 05/15/08 275,000 275,875
Caterpillar Financial Services Corp.
3.625% 11/15/07 350,000 343,291
Citicorp
8.040% 12/15/19 (b) 1,900,000 2,339,451
Countrywide Home Loans, Inc.
2.875% 02/15/07 450,000 439,416
Credit Suisse First Boston USA, Inc.
4.875% 08/15/10 500,000 500,600
E*Trade Financial Corp.
7.375% 09/15/13 (b) 85,000 85,425
Goldman Sachs Group, Inc.
6.345% 02/15/34 475,000 493,867
John Deere Capital Corp.
4.625% 04/15/09 500,000 499,500
JPMorgan Chase Capital XV
5.875% 03/15/35 600,000 588,072
Merrill Lynch & Co., Inc.
4.125% 01/15/09 575,000 564,247
Morgan Stanley
6.750% 04/15/11 570,000 618,632
SLM Corp.
5.125% 08/27/12 800,000 808,256
-------------
Diversified Financial Services Total 8,133,052
See Accompanying Notes to Financial Statements. | 41
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
INDUSTRIALS - (CONTINUED)
INSURANCE - 0.3%
American International Group, Inc.
2.875% 05/15/08 850,000 812,838
Prudential Insurance Co. of America
7.650% 07/01/07 (b) 500,000 523,600
-------------
Insurance Total 1,336,438
REAL ESTATE INVESTMENT TRUSTS - 0.2%
Health Care Property Investors, Inc.
6.450% 06/25/12 525,000 555,807
Host Marriott LP
6.375% 03/15/15 90,000 87,188
-------------
Real Estate Investment Trusts Total 642,995
VENTURE CAPITAL - 0.1%
Arch Western Finance LLC
6.750% 07/01/13 260,000 265,200
-------------
Venture Capital Total 265,200
-------------
FINANCIALS TOTAL 14,062,260
INDUSTRIALS - 1.6%
AEROSPACE & DEFENSE - 0.3%
L-3 Communications Corp.
6.125% 07/15/13 20,000 19,950
6.375% 10/15/15 (b) 20,000 20,100
7.625% 06/15/12 300,000 316,500
Raytheon Co.
8.300% 03/01/10 500,000 566,055
Sequa Corp.
9.000% 08/01/09 35,000 37,188
TransDigm, Inc.
8.375% 07/15/11 145,000 152,250
-------------
Aerospace & Defense Total 1,112,043
AUTO MANUFACTURERS - 0.2%
Ford Motor Credit Co.
7.375% 10/28/09 775,000 752,029
-------------
Auto Manufacturers Total 752,029
ENVIRONMENTAL CONTROL - 0.2%
Allied Waste North America, Inc.
6.375% 04/15/11 65,000 62,400
9.250% 09/01/12 100,000 108,500
Waste Management, Inc.
7.375% 08/01/10 500,000 548,805
-------------
Environmental Control Total 719,705
MACHINERY-DIVERSIFIED - 0.1%
Manitowoc Co., Inc.
7.125% 11/01/13 120,000 124,500
Westinghouse Air Brake
Technologies Corp.
6.875% 07/31/13 175,000 178,500
-------------
Machinery-Diversified Total 303,000
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
MISCELLANEOUS MANUFACTURING - 0.3%
General Electric Co.
5.000% 02/01/13 1,025,000 1,034,440
Trinity Industries, Inc.
6.500% 03/15/14 20,000 19,600
-------------
Miscellaneous Manufacturing Total 1,054,040
PACKAGING & CONTAINERS - 0.3%
Ball Corp.
6.875% 12/15/12 300,000 307,500
Jefferson Smurfit Corp.
8.250% 10/01/12 100,000 94,000
Owens-Brockway Glass Container, Inc.
6.750% 12/01/14 25,000 24,125
Owens-Illinois, Inc.
7.500% 05/15/10 240,000 243,000
Silgan Holdings, Inc.
6.750% 11/15/13 350,000 351,750
Smurfit-Stone Container Corp.
8.375% 07/01/12 125,000 119,375
-------------
Packaging & Containers Total 1,139,750
TRANSPORTATION - 0.2%
FedEx Corp.
7.530% 09/23/06 117,156 119,573
Offshore Logistics, Inc.
6.125% 06/15/13 155,000 151,900
Overseas Shipholding Group
8.250% 03/15/13 165,000 179,025
Teekay Shipping Corp.
8.875% 07/15/11 415,000 472,062
-------------
Transportation Total 922,560
-------------
INDUSTRIALS TOTAL 6,003,127
TECHNOLOGY - 0.1%
COMPUTERS - 0.1%
International Business Machines Corp.
5.875% 11/29/32 325,000 345,885
-------------
Computers Total 345,885
SEMICONDUCTORS - 0.0%
Freescale Semiconductor, Inc.
6.875% 07/15/11 150,000 156,000
-------------
Semiconductors Total 156,000
-------------
TECHNOLOGY TOTAL 501,885
UTILITIES - 0.7%
ELECTRIC - 0.6%
AES Corp.
7.750% 03/01/14 225,000 240,750
Exelon Generation Co.
6.950% 06/15/11 400,000 434,168
Nevada Power Co.
5.875% 01/15/15 80,000 79,607
6.500% 04/15/12 50,000 51,375
NorthWestern Corp.
5.875% 11/01/14 10,000 10,213
42 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - (CONTINUED)
UTILITIES - (CONTINUED)
ELECTRIC - (CONTINUED)
Scottish Power PLC
4.910% 03/15/10 525,000 523,829
TECO Energy, Inc.
6.750% 05/01/15 (b) 100,000 104,625
7.000% 05/01/12 65,000 68,656
Texas Genco LLC
6.875% 12/15/14 (b) 170,000 172,975
Virginia Electric & Power Co.
5.375% 02/01/07 625,000 630,550
-------------
Electric Total 2,316,748
GAS - 0.1%
Sempra Energy
4.750% 05/15/09 275,000 273,226
-------------
Gas Total 273,226
-------------
UTILITIES TOTAL 2,589,974
-------------
Total Corporate Fixed-Income Bonds & Notes
(cost of $45,790,981) 45,836,694
MORTGAGE-BACKED SECURITIES - 8.3%
AGENCY COLLATERALIZED MORTGAGE OBLIGATIONS - 1.4%
Federal Home Loan Mortgage Corp.
4.500% 03/15/18 2,000,000 1,966,431
5.000% 12/15/15 2,280,210 2,290,474
Federal National Mortgage Association
5.000% 12/25/15 1,200,000 1,200,632
-------------
AGENCY COLLATERALIZED
MORTGAGE OBLIGATIONS TOTAL 5,457,537
-------------
MORTGAGE-BACKED SECURITIES - 6.9%
Federal Home Loan Mortgage Corp.
5.000% 06/01/20 2,390,821 2,385,333
5.000% 08/01/20 3,021,425 3,014,490
6.500% 02/01/11 100,259 103,534
6.500% 04/01/11 138,820 143,342
6.500% 05/01/11 74,946 77,387
6.500% 10/01/11 55,688 57,503
6.500% 07/01/16 27,154 28,037
6.500% 04/01/26 44,911 46,373
6.500% 06/01/26 50,775 52,428
6.500% 02/01/27 225,679 232,959
6.500% 03/01/27 150,613 155,496
6.500% 09/01/28 123,805 127,748
6.500% 06/01/31 83,575 86,086
6.500% 07/01/31 24,257 25,000
7.000% 07/01/28 91,496 95,753
7.000% 04/01/29 51,141 53,521
7.000% 01/01/30 66,240 69,237
7.000% 06/01/31 16,161 16,888
7.000% 08/01/31 204,774 213,986
7.500% 07/01/15 16,718 17,653
7.500% 08/01/15 1,324 1,399
7.500% 01/01/30 75,098 79,632
8.000% 09/01/15 65,430 69,966
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
Federal National Mortgage Association
5.000% 01/01/18 769,314 768,134
5.000% 06/01/18 5,436,826 5,426,262
5.000% 08/01/20 932,956 930,814
5.500% 05/01/16 472,097 479,330
5.500% 12/01/17 979,073 993,815
5.500% 10/01/33 3,610,231 3,611,905
6.000% 01/01/09 57,894 59,458
6.000% 06/01/14 235,241 242,059
6.000% 10/13/35 (f) 590,000 599,772
6.120% 10/01/08 2,284,564 2,229,327
6.500% 03/01/11 8,731 9,032
6.500% 01/01/26 16,494 17,045
6.500% 08/01/31 406,878 419,453
6.500% 10/01/31 415,801 428,651
7.000% 03/01/15 129,817 135,720
7.000% 07/01/16 24,613 25,725
7.000% 02/01/31 30,940 32,386
7.000% 07/01/31 259,156 271,286
7.000% 07/01/32 54,479 57,026
7.500% 06/01/15 67,440 71,327
7.500% 08/01/15 73,316 77,542
7.500% 09/01/15 35,420 37,462
7.500% 02/01/31 51,478 54,487
7.500% 08/01/31 41,665 44,095
8.000% 12/01/29 42,145 45,094
8.000% 04/01/30 68,383 73,111
8.000% 05/01/30 11,571 12,371
8.000% 07/01/31 34,235 36,597
Government National Mortgage
Association
6.000% 04/15/13 15,818 16,376
6.500% 05/15/13 31,938 33,255
6.500% 06/15/13 23,497 24,466
6.500% 08/15/13 46,287 48,196
6.500% 11/15/13 150,151 156,345
6.500% 07/15/14 83,735 87,172
6.500% 01/15/29 16,141 16,821
6.500% 03/15/29 124,240 129,477
6.500% 04/15/29 325,457 339,178
6.500% 05/15/29 223,322 232,737
6.500% 07/15/31 82,550 85,916
7.000% 11/15/13 393,052 412,704
7.000% 05/15/29 34,156 35,939
7.000% 09/15/29 69,538 73,169
7.000% 06/15/31 58,917 61,965
7.500% 06/15/23 2,410 2,576
7.500% 01/15/26 36,501 38,849
7.500% 09/15/29 156,014 165,745
8.000% 07/15/25 21,888 23,469
8.500% 12/15/30 6,517 7,080
9.000% 12/15/17 50,275 54,580
-------------
MORTGAGE-BACKED SECURITIES TOTAL 26,389,052
-------------
Total Mortgage-Backed Securities
(cost of $31,769,376) 31,846,589
See Accompanying Notes to Financial Statements. | 43
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
GOVERNMENT AGENCIES & OBLIGATIONS - 5.1%
FOREIGN GOVERNMENT OBLIGATIONS - 0.4%
Province of Quebec
7.000% 01/30/07 800,000 826,032
United Mexican States
7.500% 04/08/33 550,000 636,075
-------------
FOREIGN GOVERNMENT OBLIGATIONS TOTAL 1,462,107
U.S. GOVERNMENT AGENCIES & OBLIGATIONS - 4.7%
Federal Home Loan Bank System
2.250% 05/15/06 (g) 125,000 123,470
4.375% 09/11/09 1,200,000 1,195,756
Federal National Mortgage Association
4.625% 10/15/14 1,355,000 1,355,433
6.625% 09/15/09 1,000,000 1,074,622
U.S. Treasury Bonds
4.750% 05/15/14 740,000 762,373
6.250% 08/15/23 7,125,000 8,519,662
U.S. Treasury Notes
3.375% 10/15/09 1,725,000 1,671,701
4.250% 11/15/13 3,600,000 3,584,390
-------------
U.S. GOVERNMENT AGENCIES
& OBLIGATIONS TOTAL 18,287,407
-------------
Total Government Agencies & Obligations
(cost of $19,654,208) 19,749,514
ASSET-BACKED SECURITIES - 3.7%
AmeriCredit Automobile Receivables Trust
3.930% 10/06/11 950,000 927,532
California Infrastructure
6.420% 12/26/09 2,000,000 2,060,800
Capital One Multi-Asset Execution Trust
3.650% 07/15/11 1,360,000 1,327,183
Chemical Bank Master Credit Card
Trust I
5.980% 09/15/08 1,550,000 1,558,339
Citibank Credit Card Issuance Trust
2.900% 05/17/10 1,200,000 1,151,724
4.950% 02/09/09 225,000 226,339
Consumer Funding LLC
5.430% 04/20/15 820,000 847,544
Green Tree Financial Corp.
6.870% 01/15/29 245,601 256,290
Navistar Financial Corp. Owner Trust
3.250% 10/15/10 2,600,000 2,546,232
Origen Manufactured Housing
3.380% 08/15/17 870,000 847,136
PG&E Energy Recovery Funding LLC
3.870% 06/25/11 990,000 975,239
Providian Gateway Master Trust
3.350% 09/15/11 (b) 250,000 243,853
Standard Credit Card Master Trust
6.550% 10/07/07 1,395,000 1,395,195
-------------
Total Asset-Backed Securities
(cost of $14,868,226) 14,363,406
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 2.7%
COLLATERALIZED MORTGAGE OBLIGATIONS - 0.6%
American Mortgage Trust
8.445% 09/27/22 22,348 15,644
Countrywide Alternative Loan Trust
5.250% 08/25/35 964,915 967,375
5.500% 10/25/35 1,187,402 1,197,423
Rural Housing Trust
6.330% 04/01/26 75,245 74,712
-------------
COLLATERALIZED MORTGAGE
OBLIGATIONS TOTAL 2,255,154
COMMERCIAL MORTGAGE-BACKED SECURITIES - 2.1%
First Union Chase Commercial Mortgage
6.645% 06/15/31 440,197 460,793
GS Mortgage Securities Corp. II
6.620% 10/18/30 2,000,000 2,068,660
JPMorgan Commercial Mortgage Finance Corp.
6.507% 10/15/35 1,600,000 1,658,800
LB-UBS Commercial Mortgage Trust
6.510% 12/15/26 1,000,000 1,071,280
Wachovia Bank Commercial Mortgage Trust
3.989% 06/15/35 3,000,000 2,828,670
-------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES TOTAL 8,088,203
-------------
Total Collateralized Mortgage Obligations
(cost of $10,455,679) 10,343,357
SHARES
- ----------------------------------------------------------------------
INVESTMENT COMPANIES - 0.2%
iShares Dow Jones U.S. Real Estate
Index Fund 660 42,418
iShares MSCI South Korea Index Fund 4,400 173,580
iShares MSCI Taiwan Index Fund 19,100 223,661
iShares Nasdaq Biotechnology Index
Fund (a) 1,690 130,130
iShares Russell 2000 Index Fund 1,830 121,494
-------------
Total Investment Companies
(cost of $676,557) 691,283
PREFERRED STOCK - 0.0%
CONSUMER DISCRETIONARY - 0.0%
AUTOMOBILES - 0.0%
Porsche AG 214 164,385
-------------
Automobiles Total 164,385
-------------
CONSUMER DISCRETIONARY TOTAL 164,385
-------------
Total Preferred Stock
(cost of $136,504) 164,385
44 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA ASSET ALLOCATION FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
CONVERTIBLE BOND - 0.0%
COMMUNICATIONS - 0.0%
TELECOMMUNICATION SERVICES - 0.0%
Lucent Technologies, Inc.
2.750% 06/15/25 31,418 37,894
-------------
Telecommunication Services Total 37,894
-------------
COMMUNICATIONS TOTAL 37,894
-------------
Total Convertible Bond
(cost of $35,918) 37,894
SHARES
- ----------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - 0.0%
BASIC MATERIALS - 0.0%
CHEMICALS - 0.0%
Celanese Corp. (a) 300 7,920
-------------
Chemicals Total 7,920
-------------
BASIC MATERIALS TOTAL 7,920
-------------
Total Convertible Preferred Stock
(cost of $7,500) 7,920
PAR ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATIONS - 5.5%
REPURCHASE AGREEMENT - 5.4%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by U.S. Government
Agencies with various maturities
to 11/15/16, market value of
$21,122,071 (repurchase proceeds
$20,696,431) 20,691,000 20,691,000
-------------
U.S. GOVERNMENT OBLIGATIONS - 0.1%
U.S. Treasury Bills
3.300% 12/15/05 (g) 50,000 49,620
3.370% 12/15/05 (g) 400,000 396,480
-------------
446,100
-------------
Total Short-Term Obligations
(cost of $21,137,100) 21,137,100
TOTAL INVESTMENTS - 100.2%
(COST OF $348,053,706) (h) 386,767,920
OTHER ASSETS & LIABILITIES, NET - (0.2)% (636,310)
NET ASSETS - 100.0% 386,131,610
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers. At
September 30, 2005, these securities amounted to $7,083,364, which
represents 1.8% of net assets.
(c) The issuer has filed for bankruptcy protection under Chapter 11, and is in
default of certain debt covenants. Income is being accrued. At September
30, 2005, the value of this security represents 0.1% of net assets.
(d) The issuer has filed for bankruptcy protection under Chapter 11, and is in
default of certain debt covenants. Income is not being accrued. At
September 30, 2005, the value of this security represents 0.1% of net
assets.
(e) The interest rate shown on floating rate or variable rate securities
reflects the rate at September 30, 2005.
(f) Security purchased on a delayed delivery basis.
(g) The securities or a portion of the securities pledged as collateral for
open future contracts. At September 30, 2005, the total market value of
securities pledged amounted to $569,570.
(h) Cost for federal income tax purposes is $350,365,368.
At September 30, 2005, the asset allocation of the Fund is as follows:
% OF
ASSET ALLOCATION (UNAUDITED) NET ASSETS
---------------------------- ----------
Common Stocks 62.8%
Corporate Fixed-Income Bonds & Notes 11.9
Mortgage-Backed Securities 8.3
Government Agencies & Obligations 5.1
Asset-Backed Securities 3.7
Collateralized Mortgage Obligations 2.7
Investment Companies 0.2
Preferred Stock 0.0
Convertible Bond 0.0
Convertible Preferred Stock 0.0
Short-Term Obligations 5.5
Other Assets & Liabilities, Net (0.2)
-----
100.0%
=====
At September 30, 2005, the Fund held the following open long futures
contract:
AGGREGATE EXPIRATION UNREALIZED
TYPE CONTRACTS VALUE FACE VALUE DATE DEPRECIATION
-----------------------------------------------------------------------
S&P 500
Index
Futures 25 $7,714,375 $7,803,325 Dec-2005 $(88,950)
At September 30, 2005, the Fund held the following open short futures
contract:
AGGREGATE EXPIRATION UNREALIZED
TYPE CONTRACTS VALUE FACE VALUE DATE APPRECIATION
-----------------------------------------------------------------------
2-Year U.S.
Treasury
Note 30 $6,176,719 $6,189,210 Dec-2005 $12,491
ACRONYM NAME
------- ----
ADR American Depositary Receipt
GDR Global Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements. | 45
INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA LARGE CAP GROWTH FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 99.8%
CONSUMER DISCRETIONARY - 11.1%
HOTELS, RESTAURANTS & LEISURE - 0.9%
Marriott International, Inc., Class A 123,470 7,778,610
Starbucks Corp. (a) 125,800 6,302,580
-------------
Hotels, Restaurants & Leisure Total 14,081,190
INTERNET & CATALOG RETAIL - 1.2%
eBay, Inc. (a) 459,300 18,923,160
-------------
Internet & Catalog Retail Total 18,923,160
MULTILINE RETAIL - 1.9%
Federated Department Stores, Inc. 157,800 10,552,086
Kohl's Corp. (a) 140,000 7,025,200
Target Corp. 219,200 11,383,056
-------------
Multiline Retail Total 28,960,342
SPECIALTY RETAIL - 5.6%
Best Buy Co., Inc. 105,130 4,576,309
Home Depot, Inc. 379,180 14,461,925
Lowe's Companies, Inc. 284,550 18,325,020
Office Depot, Inc. (a) 544,600 16,174,620
Sherwin-Williams Co. 167,600 7,386,132
Staples, Inc. 290,725 6,198,257
Tiffany & Co. 446,500 17,757,305
-------------
Specialty Retail Total 84,879,568
TEXTILES, APPAREL & LUXURY GOODS - 1.5%
Coach, Inc. (a) 457,030 14,332,461
NIKE, Inc., Class B 94,410 7,711,409
-------------
Textiles, Apparel & Luxury Goods Total 22,043,870
-------------
CONSUMER DISCRETIONARY TOTAL 168,888,130
CONSUMER STAPLES - 10.7%
BEVERAGES - 3.2%
Coca-Cola Co. 317,760 13,724,054
Diageo PLC, ADR 88,493 5,133,479
PepsiCo, Inc. 532,980 30,225,296
-------------
Beverages Total 49,082,829
FOOD & STAPLES RETAILING - 2.2%
CVS Corp. 768,700 22,299,987
Walgreen Co. 268,200 11,653,290
-------------
Food & Staples Retailing Total 33,953,277
FOOD PRODUCTS - 1.0%
Kellogg Co. 337,100 15,550,423
-------------
Food Products Total 15,550,423
HOUSEHOLD PRODUCTS - 2.3%
Colgate-Palmolive Co. 308,300 16,275,157
Procter & Gamble Co. 313,540 18,643,089
-------------
Household Products Total 34,918,246
SHARES VALUE ($)
- ----------------------------------------------------------------------
PERSONAL PRODUCTS - 2.0%
Gillette Co. 523,800 30,485,160
-------------
Personal Products Total 30,485,160
-------------
CONSUMER STAPLES TOTAL 163,989,935
ENERGY - 7.6%
ENERGY EQUIPMENT & SERVICES - 2.2%
Halliburton Co. 492,800 33,766,656
-------------
Energy Equipment & Services Total 33,766,656
OIL, GAS & CONSUMABLE FUELS - 5.4%
CONSOL Energy, Inc. 279,300 21,302,211
EOG Resources, Inc. 216,700 16,230,830
Pioneer Natural Resources Co. 269,600 14,806,432
XTO Energy, Inc. 665,700 30,169,524
-------------
Oil, Gas & Consumable Fuels Total 82,508,997
-------------
ENERGY TOTAL 116,275,653
FINANCIALS - 7.9%
CAPITAL MARKETS - 2.7%
Goldman Sachs Group, Inc. 75,050 9,124,579
Merrill Lynch & Co., Inc. 264,800 16,245,480
State Street Corp. 315,950 15,456,274
-------------
Capital Markets Total 40,826,333
COMMERCIAL BANKS - 1.8%
Wells Fargo & Co. 300,440 17,596,771
Zions Bancorporation 146,600 10,439,386
-------------
Commercial Banks Total 28,036,157
DIVERSIFIED FINANCIAL SERVICES - 1.0%
Citigroup, Inc. 333,356 15,174,365
-------------
Diversified Financial Services Total 15,174,365
INSURANCE - 2.4%
American International Group, Inc. 585,350 36,268,286
-------------
Insurance Total 36,268,286
-------------
FINANCIALS TOTAL 120,305,141
HEALTH CARE - 20.1%
BIOTECHNOLOGY - 2.5%
Amgen, Inc. (a) 332,370 26,479,918
Protein Design Labs, Inc. (a) 396,300 11,096,400
-------------
Biotechnology Total 37,576,318
HEALTH CARE EQUIPMENT & SUPPLIES - 5.5%
Alcon, Inc. 71,430 9,134,468
Baxter International, Inc. 298,900 11,917,143
Medtronic, Inc. 463,530 24,854,479
Thermo Electron Corp. (a) 644,260 19,907,634
Varian Medical Systems, Inc. (a) 477,870 18,880,644
-------------
Health Care Equipment & Supplies Total 84,694,368
46 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA LARGE CAP GROWTH FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES - 3.1%
Caremark Rx, Inc. (a) 378,120 18,879,531
UnitedHealth Group, Inc. 519,830 29,214,446
-------------
Health Care Providers & Services Total 48,093,977
PHARMACEUTICALS - 9.0%
Abbott Laboratories 484,360 20,536,864
Amylin Pharmaceuticals, Inc. (a) 204,700 7,121,513
IVAX Corp. (a) 414,910 10,937,028
Johnson & Johnson 731,640 46,298,179
Novartis AG, ADR 556,770 28,395,270
Teva Pharmaceutical Industries
Ltd., ADR 463,846 15,501,733
Wyeth 178,840 8,274,927
-------------
Pharmaceuticals Total 137,065,514
-------------
HEALTH CARE TOTAL 307,430,177
INDUSTRIALS - 10.2%
AEROSPACE & DEFENSE - 1.1%
Honeywell International, Inc. 427,580 16,034,250
-------------
Aerospace & Defense Total 16,034,250
BUILDING PRODUCTS - 1.1%
American Standard Companies, Inc. 365,690 17,022,870
-------------
Building Products Total 17,022,870
ELECTRICAL EQUIPMENT - 1.3%
Rockwell Automation, Inc. 362,820 19,193,178
-------------
Electrical Equipment Total 19,193,178
INDUSTRIAL CONGLOMERATES - 5.3%
3M Co. 205,100 15,046,136
General Electric Co. 1,946,415 65,535,793
-------------
Industrial Conglomerates Total 80,581,929
MACHINERY - 1.4%
ITT Industries, Inc. 119,180 13,538,848
Pentair, Inc. 235,310 8,588,815
-------------
Machinery Total 22,127,663
-------------
INDUSTRIALS TOTAL 154,959,890
INFORMATION TECHNOLOGY - 30.2%
COMMUNICATIONS EQUIPMENT - 5.2%
Cisco Systems, Inc. (a) 1,627,765 29,185,827
Corning, Inc. (a) 323,800 6,259,054
Juniper Networks, Inc. (a) 320,000 7,612,800
Motorola, Inc. 437,800 9,671,002
Nokia Oyj, ADR 664,830 11,242,275
QUALCOMM, Inc. 323,800 14,490,050
-------------
Communications Equipment Total 78,461,008
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMPUTERS & PERIPHERALS - 6.1%
Apple Computer, Inc. (a) 181,800 9,746,298
Dell, Inc. (a) 604,640 20,678,688
EMC Corp. (a) 812,090 10,508,445
Hewlett-Packard Co. 657,480 19,198,416
International Business Machines Corp. 412,280 33,073,101
-------------
Computers & Peripherals Total 93,204,948
INTERNET SOFTWARE & SERVICES - 2.3%
Google, Inc., Class A (a) 38,000 12,025,480
Yahoo!, Inc. (a) 676,750 22,901,220
-------------
Internet Software & Services Total 34,926,700
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 7.2%
Broadcom Corp., Class A (a) 164,800 7,730,768
Fairchild Semiconductor
International, Inc. (a) 398,000 5,914,280
Intel Corp. 1,228,870 30,291,645
MEMC Electronic Materials, Inc. (a) 799,500 18,220,605
Microchip Technology, Inc. 303,640 9,145,637
Taiwan Semiconductor
Manufacturing Co., Ltd., ADR 1,380,020 11,343,764
Texas Instruments, Inc. 822,010 27,866,139
-------------
Semiconductors & Semiconductor
Equipment Total 110,512,838
SOFTWARE - 9.4%
Autodesk, Inc. 347,140 16,121,182
Electronic Arts, Inc. (a) 211,630 12,039,631
McAfee, Inc. (a) 312,500 9,818,750
Microsoft Corp. 2,386,420 61,402,587
NAVTEQ (a) 160,470 8,015,476
Oracle Corp. (a) 894,900 11,087,811
SAP AG, ADR 585,480 25,368,848
-------------
Software Total 143,854,285
-------------
INFORMATION TECHNOLOGY TOTAL 460,959,779
MATERIALS - 2.0%
CHEMICALS - 2.0%
Praxair, Inc. 631,680 30,276,422
-------------
Chemicals Total 30,276,422
-------------
MATERIALS TOTAL 30,276,422
-------------
Total Common Stocks
(cost of $1,321,735,561) 1,523,085,127
See Accompanying Notes to Financial Statements. | 47
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA LARGE CAP GROWTH FUND
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATION - 0.9%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury
Note maturing 01/31/07, market
value of $14,698,925 (repurchase
proceeds $14,413,783) 14,410,000 14,410,000
-------------
Total Short-Term Obligation
(cost of $14,410,000) 14,410,000
TOTAL INVESTMENTS - 100.7%
(COST OF $1,336,145,561) (b) 1,537,495,127
OTHER ASSETS & LIABILITIES, NET - (0.7)% (10,748,640)
NET ASSETS - 100.0% 1,526,746,487
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $1,343,394,022.
At September 30, 2005, the Fund held investments in the following sectors:
% OF
SECTOR (UNAUDITED) NET ASSETS
------------------ ----------
Information Technology 30.2%
Health Care 20.1
Consumer Discretionary 11.1
Consumer Staples 10.7
Industrials 10.2
Financials 7.9
Energy 7.6
Materials 2.0
Short-Term Obligation 0.9
Other Assets & Liabilities, Net (0.7)
-----
100.0%
=====
ACRONYM NAME
------- ----
ADR American Depositary Receipt
48 | See Accompanying Notes to Financial Statements.
INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA DISCIPLINED VALUE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 99.7%
CONSUMER DISCRETIONARY - 9.3%
HOTELS, RESTAURANTS & LEISURE - 2.8%
McDonald's Corp. 361,000 12,089,890
-------------
Hotels, Restaurants & Leisure Total 12,089,890
HOUSEHOLD DURABLES - 0.5%
Pulte Homes, Inc. 47,000 2,017,240
-------------
Household Durables Total 2,017,240
MEDIA - 2.6%
Time Warner, Inc. 264,300 4,786,473
Walt Disney Co. 233,400 5,631,942
Warner Music Group Corp. 40,000 740,400
-------------
Media Total 11,158,815
MULTILINE RETAIL - 1.1%
Dillard's, Inc., Class A 234,300 4,892,184
-------------
Multiline Retail Total 4,892,184
SPECIALTY RETAIL - 2.3%
Autonation, Inc. (a) 96,800 1,933,096
Barnes & Noble, Inc. 216,600 8,165,820
-------------
Specialty Retail Total 10,098,916
-------------
CONSUMER DISCRETIONARY TOTAL 40,257,045
CONSUMER STAPLES - 5.7%
BEVERAGES - 1.7%
Coca-Cola Co. 166,900 7,208,411
-------------
Beverages Total 7,208,411
FOOD PRODUCTS - 1.5%
Archer-Daniels-Midland Co. 212,800 5,247,648
Tyson Foods, Inc., Class A 60,100 1,084,805
-------------
Food Products Total 6,332,453
HOUSEHOLD PRODUCTS - 0.8%
Procter & Gamble Co. 55,700 3,311,922
-------------
Household Products Total 3,311,922
TOBACCO - 1.7%
Loews Corp. - Carolina Group 36,500 1,446,495
Reynolds American, Inc. 67,400 5,595,548
UST, Inc. 13,600 569,296
-------------
Tobacco Total 7,611,339
-------------
CONSUMER STAPLES TOTAL 24,464,125
ENERGY - 15.2%
OIL, GAS & CONSUMABLE FUELS - 15.2%
Amerada Hess Corp. 92,900 12,773,750
ChevronTexaco Corp. 274,400 17,761,912
SHARES VALUE ($)
- ----------------------------------------------------------------------
ConocoPhillips 13,700 957,767
Devon Energy Corp. 126,900 8,710,416
Exxon Mobil Corp. 401,700 25,524,018
-------------
Oil, Gas & Consumable Fuels Total 65,727,863
-------------
ENERGY TOTAL 65,727,863
FINANCIALS - 34.6%
CAPITAL MARKETS - 3.3%
Goldman Sachs Group, Inc. 17,200 2,091,176
Lehman Brothers Holdings, Inc. 18,000 2,096,640
Mellon Financial Corp. 105,800 3,382,426
State Street Corp. 139,800 6,839,016
-------------
Capital Markets Total 14,409,258
COMMERCIAL BANKS - 4.6%
KeyCorp 64,800 2,089,800
U.S. Bancorp 3,000 84,240
Wachovia Corp. 306,500 14,586,335
Wells Fargo & Co. 53,700 3,145,209
-------------
Commercial Banks Total 19,905,584
DIVERSIFIED FINANCIAL SERVICES - 9.7%
Citigroup, Inc. 267,000 12,153,840
JPMorgan Chase & Co. 531,500 18,033,795
Nuveen Investments, Class A 89,100 3,509,649
Principal Financial Group, Inc. 168,500 7,981,845
-------------
Diversified Financial Services Total 41,679,129
INSURANCE - 14.8%
AFLAC, Inc. 17,900 810,870
Allmerica Financial Corp. (a) 4,100 168,674
Allstate Corp. 87,900 4,859,991
American Financial Group, Inc. 20,600 698,958
American International Group, Inc. 50,400 3,122,784
Assurant, Inc. 48,800 1,857,328
Chubb Corp. 129,400 11,587,770
Conseco, Inc. (a) 51,800 1,093,498
First American Corp. 130,200 5,946,234
Hartford Financial Services
Group, Inc. 161,200 12,439,804
MetLife, Inc. 1,000 49,830
Nationwide Financial Services, Inc.,
Class A 26,500 1,061,325
Prudential Financial, Inc. 196,500 13,275,540
SAFECO Corp. 102,100 5,450,098
W.R. Berkley Corp. 32,000 1,263,360
-------------
Insurance Total 63,686,064
REAL ESTATE - 1.6%
Annaly Mortgage Management, Inc.,
REIT 519,700 6,730,115
-------------
Real Estate Total 6,730,115
See Accompanying Notes to Financial Statements. | 49
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA DISCIPLINED VALUE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
THRIFTS & MORTGAGE FINANCE - 0.6%
Fannie Mae 33,900 1,519,398
Freddie Mac 18,300 1,033,218
-------------
Thrifts & Mortgage Finance Total 2,552,616
-------------
FINANCIALS TOTAL 148,962,766
HEALTH CARE - 7.2%
HEALTH CARE PROVIDERS & SERVICES - 4.0%
AmerisourceBergen Corp. 137,500 10,628,750
McKesson Corp. 98,000 4,650,100
Medco Health Solutions, Inc. (a) 35,200 1,930,016
-------------
Health Care Providers & Services Total 17,208,866
PHARMACEUTICALS - 3.2%
Merck & Co., Inc. 164,500 4,476,045
Pfizer, Inc. 365,800 9,134,026
-------------
Pharmaceuticals Total 13,610,071
-------------
HEALTH CARE TOTAL 30,818,937
INDUSTRIALS - 6.3%
AEROSPACE & DEFENSE - 2.5%
Boeing Co. 41,200 2,799,540
Northrop Grumman Corp. 81,900 4,451,265
Raytheon Co. 91,500 3,478,830
-------------
Aerospace & Defense Total 10,729,635
AIR FREIGHT & LOGISTICS - 0.3%
FedEx Corp. 16,100 1,402,793
-------------
Air Freight & Logistics Total 1,402,793
COMMERCIAL SERVICES & SUPPLIES - 2.3%
Cendant Corp. 462,300 9,541,872
R.R. Donnelley & Sons Co. 9,600 355,872
-------------
Commercial Services & Supplies Total 9,897,744
MACHINERY - 0.9%
Parker Hannifin Corp. 61,200 3,935,772
-------------
Machinery Total 3,935,772
TRANSPORTATION - 0.3%
Laidlaw International, Inc. 46,600 1,126,322
-------------
Transportation Total 1,126,322
-------------
INDUSTRIALS TOTAL 27,092,266
INFORMATION TECHNOLOGY - 4.4%
COMPUTERS & PERIPHERALS - 2.9%
International Business Machines Corp. 153,600 12,321,792
-------------
Computers & Peripherals Total 12,321,792
SHARES VALUE ($)
- ----------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 0.0%
Freescale Semiconductor, Inc., Class B (a) 6,000 141,480
-------------
Semiconductors & Semiconductor
Equipment Total 141,480
SOFTWARE - 1.5%
Microsoft Corp. 166,100 4,273,753
Reynolds & Reynolds Co., Class A 84,600 2,318,886
-------------
Software Total 6,592,639
-------------
INFORMATION TECHNOLOGY TOTAL 19,055,911
MATERIALS - 4.2%
CHEMICALS - 0.2%
Celanese Corp., Series A 33,000 569,250
-------------
Chemicals Total 569,250
METALS & MINING - 1.4%
Phelps Dodge Corp. 47,500 6,171,675
-------------
Metals & Mining Total 6,171,675
PAPER & FOREST PRODUCTS - 2.6%
Georgia-Pacific Corp. 332,400 11,321,544
-------------
Paper & Forest Products Total 11,321,544
-------------
MATERIALS TOTAL 18,062,469
TELECOMMUNICATION SERVICES - 5.7%
DIVERSIFIED TELECOMMUNICATION SERVICES - 4.3%
AT&T Corp. 55,500 1,098,900
BellSouth Corp. 160,100 4,210,630
CenturyTel, Inc. 127,400 4,456,452
SBC Communications, Inc. 229,000 5,489,130
Sprint Nextel Corp. 200 4,756
Verizon Communications, Inc. 97,000 3,170,930
-------------
Diversified Telecommunication Services Total 18,430,798
WIRELESS TELECOMMUNICATION SERVICES - 1.4%
Crown Castle International Corp. (a) 244,800 6,029,424
-------------
Wireless Telecommunication Services Total 6,029,424
-------------
TELECOMMUNICATION SERVICES TOTAL 24,460,222
UTILITIES - 7.1%
ELECTRIC UTILITIES - 6.3%
American Electric Power Co., Inc. 168,000 6,669,600
CenterPoint Energy, Inc. 69,900 1,039,413
FirstEnergy Corp. 255,000 13,290,600
PG&E Corp. 158,800 6,232,900
-------------
Electric Utilities Total 27,232,513
GAS UTILITIES - 0.3%
UGI Corp. 40,600 1,142,890
-------------
Gas Utilities Total 1,142,890
50 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA DISCIPLINED VALUE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
UTILITIES - (CONTINUED)
MULTI-UTILITIES - 0.5%
Wisconsin Energy Corp. 59,000 2,355,280
-------------
Multi-Utilities Total 2,355,280
-------------
UTILITIES TOTAL 30,730,683
Total Common Stocks
(cost of $381,594,053) 429,632,287
PAR ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATION - 0.8%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury
Note maturing 08/15/07, market
value of $3,411,188 (repurchase
proceeds $3,344,878) 3,344,000 3,344,000
-------------
Total Short-Term Obligation
(cost of $3,344,000) 3,344,000
TOTAL INVESTMENTS - 100.5%
(COST OF $384,938,053) (b) 432,976,287
OTHER ASSETS & LIABILITIES, NET - (0.5)% (1,976,032)
NET ASSETS - 100.0% 431,000,255
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $386,175,975.
At September 30, 2005, the Fund held investments in the following sectors:
% OF
SECTOR (UNAUDITED) NET ASSETS
------------------ ----------
Financials 34.6%
Energy 15.2
Consumer Discretionary 9.3
Health Care 7.2
Utilities 7.1
Industrials 6.3
Consumer Staples 5.7
Telecommunication Services 5.7
Information Technology 4.4
Materials 4.2
Short-Term Obligation 0.8
Other Assets & Liabilities, Net (0.5)
-----
100.0%
=====
ACRONYM NAME
------- ----
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements. | 51
INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA COMMON STOCK FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 98.3%
CONSUMER DISCRETIONARY - 12.2%
DIVERSIFIED CONSUMER SERVICES - 1.3%
Career Education Corp. (a) 194,010 6,898,996
-------------
Diversified Consumer Services Total 6,898,996
HOUSEHOLD DURABLES - 0.8%
Sony Corp., ADR 130,900 4,344,571
-------------
Household Durables Total 4,344,571
INTERNET & CATALOG RETAIL - 1.5%
Amazon.com, Inc. (a) 92,100 4,172,130
Expedia, Inc. (a) 175,400 3,474,674
-------------
Internet & Catalog Retail Total 7,646,804
LEISURE EQUIPMENT & PRODUCTS - 0.2%
Hasbro, Inc. 66,680 1,310,262
-------------
Leisure Equipment & Products Total 1,310,262
MEDIA - 6.8%
Clear Channel Communications, Inc. 67,390 2,216,457
Comcast Corp., Class A (a) 207,242 6,088,770
Liberty Global, Inc., Class A (a) 32,033 867,454
Liberty Global, Inc., Series C (a) 32,033 824,850
Liberty Media Corp., Class A (a) 666,410 5,364,600
News Corp., Class A 457,490 7,132,269
Time Warner, Inc. 416,160 7,536,658
Viacom, Inc., Class B 150,750 4,976,257
-------------
Media Total 35,007,315
MULTILINE RETAIL - 1.1%
Kohl's Corp. (a) 109,310 5,485,176
-------------
Multiline Retail Total 5,485,176
SPECIALTY RETAIL - 0.5%
RadioShack Corp. 99,110 2,457,928
-------------
Specialty Retail Total 2,457,928
-------------
CONSUMER DISCRETIONARY TOTAL 63,151,052
CONSUMER STAPLES - 7.4%
BEVERAGES - 2.6%
Coca-Cola Co. 148,160 6,399,030
PepsiCo, Inc. 128,390 7,280,997
-------------
Beverages Total 13,680,027
FOOD & STAPLES RETAILING - 0.7%
Wal-Mart Stores, Inc. 82,820 3,629,172
-------------
Food & Staples Retailing Total 3,629,172
FOOD PRODUCTS - 1.4%
McCormick & Co., Inc. 75,300 2,457,039
Smithfield Foods, Inc. (a) 164,100 4,870,488
-------------
Food Products Total 7,327,527
SHARES VALUE ($)
- ----------------------------------------------------------------------
HOUSEHOLD PRODUCTS - 0.9%
Colgate-Palmolive Co. 91,820 4,847,178
-------------
Household Products Total 4,847,178
PERSONAL PRODUCTS - 0.9%
Gillette Co. 75,900 4,417,380
-------------
Personal Products Total 4,417,380
TOBACCO - 0.9%
Altria Group, Inc. 60,415 4,453,190
-------------
Tobacco Total 4,453,190
-------------
CONSUMER STAPLES TOTAL 38,354,474
ENERGY - 7.4%
ENERGY EQUIPMENT & SERVICES - 0.8%
BJ Services Co. 73,200 2,634,468
Transocean, Inc. (a) 24,190 1,483,089
-------------
Energy Equipment & Services Total 4,117,557
OIL, GAS & CONSUMABLE FUELS - 6.6%
Apache Corp. 36,730 2,762,831
BP PLC, ADR 19,360 1,371,656
ConocoPhillips 157,400 11,003,834
Devon Energy Corp. 30,210 2,073,614
EOG Resources, Inc. 50,620 3,791,438
Exxon Mobil Corp. 148,590 9,441,408
Peabody Energy Corp. 43,420 3,662,477
-------------
Oil, Gas & Consumable Fuels Total 34,107,258
-------------
ENERGY TOTAL 38,224,815
FINANCIALS - 17.6%
CAPITAL MARKETS - 3.0%
E*TRADE Financial Corp. (a) 294,560 5,184,256
Goldman Sachs Group, Inc. 16,200 1,969,596
Lazard Ltd., Class A 163,890 4,146,417
Merrill Lynch & Co., Inc. 45,200 2,773,020
Morgan Stanley 30,580 1,649,485
-------------
Capital Markets Total 15,722,774
COMMERCIAL BANKS - 1.1%
Wachovia Corp. 52,355 2,491,574
Wells Fargo & Co. 25,450 1,490,607
Zions Bancorporation 22,030 1,568,756
-------------
Commercial Banks Total 5,550,937
CONSUMER FINANCE - 0.6%
American Express Co. 49,240 2,828,346
-------------
Consumer Finance Total 2,828,346
DIVERSIFIED FINANCIAL SERVICES - 3.4%
Citigroup, Inc. 180,889 8,234,067
JPMorgan Chase & Co. 271,772 9,221,224
-------------
Diversified Financial Services Total 17,455,291
52 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA COMMON STOCK FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
INSURANCE - 8.2%
Ace Ltd. 122,010 5,743,011
Ambac Financial Group, Inc. 76,300 5,498,178
American International Group, Inc. 154,180 9,552,993
Berkshire Hathaway, Inc., Class B (a) 3,439 9,391,909
Chubb Corp. 36,735 3,289,619
UnumProvident Corp. 446,490 9,153,045
-------------
Insurance Total 42,628,755
THRIFTS & MORTGAGE FINANCE - 1.3%
MGIC Investment Corp. 107,530 6,903,426
-------------
Thrifts & Mortgage Finance Total 6,903,426
-------------
FINANCIALS TOTAL 91,089,529
HEALTH CARE - 16.7%
BIOTECHNOLOGY - 3.8%
Amgen, Inc. (a) 89,782 7,152,932
MedImmune, Inc. (a) 147,540 4,964,721
Millennium Pharmaceuticals, Inc. (a) 812,360 7,579,319
-------------
Biotechnology Total 19,696,972
HEALTH CARE EQUIPMENT & SUPPLIES - 3.4%
Biomet, Inc. 109,800 3,811,158
Medtronic, Inc. 50,700 2,718,534
Thermo Electron Corp. (a) 188,350 5,820,015
Waters Corp. (a) 125,440 5,218,304
-------------
Health Care Equipment & Supplies Total 17,568,011
HEALTH CARE PROVIDERS & SERVICES - 4.0%
AmerisourceBergen Corp. 47,600 3,679,480
Cardinal Health, Inc. 81,680 5,181,779
McKesson Corp. 61,510 2,918,650
WebMD Corp. (a) 557,840 6,180,867
WellPoint, Inc. (a) 35,720 2,708,290
-------------
Health Care Providers & Services Total 20,669,066
PHARMACEUTICALS - 5.5%
Abbott Laboratories 86,590 3,671,416
Barr Pharmaceuticals, Inc. (a) 131,100 7,200,012
Eli Lilly & Co. 40,350 2,159,532
Endo Pharmaceuticals Holdings, Inc. (a) 171,500 4,573,905
IVAX Corp. (a) 136,070 3,586,805
Johnson & Johnson 76,190 4,821,303
Pfizer, Inc. 99,934 2,495,352
-------------
Pharmaceuticals Total 28,508,325
-------------
HEALTH CARE TOTAL 86,442,374
SHARES VALUE ($)
- ----------------------------------------------------------------------
INDUSTRIALS - 10.9%
AEROSPACE & DEFENSE - 2.7%
Honeywell International, Inc. 231,350 8,675,625
United Technologies Corp. 99,240 5,144,602
-------------
Aerospace & Defense Total 13,820,227
AIR FREIGHT & LOGISTICS - 0.5%
United Parcel Service, Inc., Class B 37,280 2,577,166
-------------
Air Freight & Logistics Total 2,577,166
AIRLINES - 0.9%
Southwest Airlines Co. 337,895 5,017,741
-------------
Airlines Total 5,017,741
COMMERCIAL SERVICES & SUPPLIES - 2.3%
ARAMARK Corp., Class B 172,410 4,605,071
Cintas Corp. 116,970 4,801,618
Waste Management, Inc. 82,655 2,364,760
-------------
Commercial Services & Supplies Total 11,771,449
INDUSTRIAL CONGLOMERATES - 2.7%
General Electric Co. 238,740 8,038,376
Tyco International Ltd. 208,800 5,815,080
-------------
Industrial Conglomerates Total 13,853,456
MACHINERY - 1.4%
Dover Corp. 182,885 7,459,879
-------------
Machinery Total 7,459,879
ROAD & RAIL - 0.4%
Union Pacific Corp. 28,110 2,015,487
-------------
Road & Rail Total 2,015,487
-------------
INDUSTRIALS TOTAL 56,515,405
INFORMATION TECHNOLOGY - 19.8%
COMMUNICATIONS EQUIPMENT - 3.8%
Avaya, Inc. (a) 471,800 4,859,540
Cisco Systems, Inc. (a) 410,600 7,362,058
Corning, Inc. (a) 144,120 2,785,840
Nortel Networks Corp. (a) 1,467,660 4,784,571
-------------
Communications Equipment Total 19,792,009
COMPUTERS & PERIPHERALS - 4.3%
Dell, Inc. (a) 214,810 7,346,502
Hewlett-Packard Co. 228,660 6,676,872
International Business Machines Corp. 63,115 5,063,085
SanDisk Corp. (a) 67,220 3,243,365
-------------
Computers & Peripherals Total 22,329,824
ELECTRONIC EQUIPMENT & INSTRUMENTS - 2.4%
Agilent Technologies, Inc. (a) 182,480 5,976,220
Celestica, Inc. (a) 289,820 3,277,864
Symbol Technologies, Inc. 304,200 2,944,656
-------------
Electronic Equipment & Instruments Total 12,198,740
See Accompanying Notes to Financial Statements. | 53
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA COMMON STOCK FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY - (CONTINUED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.1%
ATI Technologies, Inc. (a) 595,700 8,304,058
Broadcom Corp., Class A (a) 122,980 5,768,992
Intel Corp. 279,680 6,894,112
Linear Technology Corp. 84,380 3,171,844
Marvell Technology Group Ltd. (a) 47,270 2,179,620
-------------
Semiconductors & Semiconductor Equipment Total 26,318,626
SOFTWARE - 4.2%
Electronic Arts, Inc. (a) 53,460 3,041,339
Microsoft Corp. 542,720 13,964,186
Oracle Corp. (a) 401,740 4,977,559
-------------
Software Total 21,983,084
-------------
INFORMATION TECHNOLOGY TOTAL 102,622,283
MATERIALS - 4.4%
CHEMICALS - 0.4%
Cytec Industries, Inc. 53,500 2,320,830
-------------
Chemicals Total 2,320,830
CONTAINERS & PACKAGING - 1.8%
Sealed Air Corp. (a) 65,040 3,086,799
Smurfit-Stone Container Corp. (a) 581,320 6,022,475
-------------
Containers & Packaging Total 9,109,274
METALS & MINING - 2.2%
Alcoa, Inc. 157,200 3,838,824
Companhia Vale do Rio Doce, ADR 98,600 3,836,526
Mittal Steel Co. NV, Class A 124,820 3,594,816
-------------
Metals & Mining Total 11,270,166
-------------
MATERIALS TOTAL 22,700,270
TELECOMMUNICATION SERVICES - 1.9%
DIVERSIFIED TELECOMMUNICATION SERVICES - 1.9%
CenturyTel, Inc. 37,350 1,306,503
Qwest Communications International,
Inc. (a) 491,690 2,015,929
Sprint Nextel Corp. 93,466 2,222,622
Telefonos de Mexico SA de CV, ADR 196,430 4,178,065
-------------
Diversified Telecommunication Services Total 9,723,119
-------------
TELECOMMUNICATION SERVICES TOTAL 9,723,119
-------------
Total Common Stocks
(cost of $429,742,276) 508,823,321
PAR ($) VALUE ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATION - 1.3%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury
Note maturing 05/15/08, market
value of $6,731,000 (repurchase
proceeds $6,598,732) 6,597,000 6,597,000
-------------
Total Short-Term Obligation
(cost of $6,597,000) 6,597,000
TOTAL INVESTMENTS - 99.6%
(COST OF $436,339,276) (b) 515,420,321
OTHER ASSETS & LIABILITIES, NET - 0.4% 2,240,016
NET ASSETS - 100.0% 517,660,337
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $438,314,958.
At September 30, 2005, the Fund held investments in the following sectors:
% OF
SECTOR (UNAUDITED) NET ASSETS
------------------ ----------
Information Technology 19.8%
Financials 17.6
Health Care 16.7
Consumer Discretionary 12.2
Industrials 10.9
Consumer Staples 7.4
Energy 7.4
Materials 4.4
Telecommunication Services 1.9
Short-Term Obligation 1.3
Other Assets & Liabilities, Net 0.4
-----
100.0%
=====
ACRONYM NAME
------- ----
ADR American Depositary Receipt
54 | See Accompanying Notes to Financial Statements.
INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL CAP CORE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 96.2%
CONSUMER DISCRETIONARY - 19.5%
AUTO COMPONENTS - 1.2%
Cooper Tire & Rubber Co. 239,870 3,662,815
Keystone Automotive Industries, Inc. (a) 270,000 7,778,700
R&B, Inc. (a) 422,016 4,325,664
Sauer-Danfoss, Inc. 112,200 2,244,000
-------------
Auto Components Total 18,011,179
DIVERSIFIED CONSUMER SERVICES - 0.6%
Regis Corp. 243,400 9,205,388
-------------
Diversified Consumer Services Total 9,205,388
HOTELS, RESTAURANTS & LEISURE - 4.3%
Buca, Inc. (a) 374,300 2,272,001
CEC Entertainment, Inc. (a) 257,930 8,191,857
Checkers Drive-In Restaurant, Inc. (a)(b)584,400 8,929,632
Famous Dave's of America, Inc. (a) 462,500 5,513,000
Fox & Hound Restaurant Group (a)(b) 501,000 5,100,180
Friendly Ice Cream Corp. (a) 230,000 2,079,200
Gaylord Entertainment Co. (a) 118,400 5,641,760
Jack in the Box, Inc. (a) 233,900 6,995,949
O'Charleys, Inc. (a) 627,005 8,972,442
Ruby Tuesday, Inc. 210,500 4,580,480
Ryan's Restaurant Group, Inc. (a) 418,650 4,885,645
Steak n Shake Co. (a) 182,000 3,303,300
-------------
Hotels, Restaurants & Leisure Total 66,465,446
HOUSEHOLD DURABLES - 0.4%
Yankee Candle Co., Inc. 268,300 6,573,350
-------------
Household Durables Total 6,573,350
INTERNET & CATALOG RETAIL - 0.3%
Valuevision Media, Inc., Class A (a) 409,000 4,642,150
-------------
Internet & Catalog Retail Total 4,642,150
LEISURE EQUIPMENT & PRODUCTS - 1.7%
Callaway Golf Co. 367,700 5,548,593
RC2 Corp. (a) 350,900 11,846,384
Steinway Musical Instruments, Inc. (a) 230,600 6,076,310
Topps Co., Inc. 268,900 2,207,669
-------------
Leisure Equipment & Products Total 25,678,956
MEDIA - 2.8%
ADVO, Inc. 360,699 11,286,272
Catalina Marketing Corp. 370,400 8,422,896
Journal Register Co. 367,500 5,946,150
Paxson Communications Corp. (a) 1,275,400 573,930
Regent Communications, Inc. (a) 839,100 4,413,666
Scholastic Corp. (a) 249,600 9,225,216
Sinclair Broadcast Group, Inc.,
Class A 263,100 2,333,697
Young Broadcasting, Inc., Class A (a) 229,400 800,606
-------------
Media Total 43,002,433
SHARES VALUE ($)
- ----------------------------------------------------------------------
SPECIALTY RETAIL - 6.7%
Buckle, Inc. 280,700 9,535,379
Dress Barn, Inc. (a) 231,400 5,266,664
Gaiam, Inc. (a) 448,600 4,629,552
Gymboree Corp. (a) 557,200 7,600,208
Hancock Fabrics, Inc. 424,300 2,855,539
Haverty Furniture Companies, Inc. 186,200 2,277,226
Hot Topic, Inc. (a) 276,600 4,248,576
Jarden Corp. (a) 136,375 5,600,921
Kirkland's, Inc. (a) 256,200 1,949,682
Lithia Motors, Inc., Class A 354,800 10,282,104
Men's Wearhouse, Inc. (a) 85,200 2,274,840
Monro Muffler, Inc. 220,000 5,779,400
Party City Corp. (a) 499,400 8,449,848
Payless Shoesource, Inc. (a) 212,500 3,697,500
Rent-A-Center, Inc. (a) 397,950 7,684,415
Rush Enterprises, Inc., Class A (a) 150,000 2,292,000
Rush Enterprises, Inc., Class B (a) 200,000 3,002,000
Sports Authority Inc. (a) 229,927 6,769,051
Stage Stores, Inc. 299,250 8,040,847
-------------
Specialty Retail Total 102,235,752
TEXTILES, APPAREL & LUXURY GOODS - 1.5%
Ashworth, Inc. (a) 300,000 2,049,000
Phillips-Van Heusen Corp. 173,600 5,385,072
Quiksilver, Inc. (a) 424,000 6,126,800
Rocky Shoes & Boots, Inc. (a) 133,600 3,820,960
Tommy Hilfiger Corp. (a) 293,300 5,088,755
-------------
Textiles, Apparel & Luxury Goods Total 22,470,587
-------------
CONSUMER DISCRETIONARY TOTAL 298,285,241
CONSUMER STAPLES - 2.0%
FOOD & STAPLES RETAILING - 0.4%
Casey's General Stores, Inc. 174,570 4,050,024
Wild Oats Markets, Inc. (a) 193,300 2,485,838
-------------
Food & Staples Retailing Total 6,535,862
FOOD PRODUCTS - 0.7%
Corn Products International, Inc. 291,600 5,881,572
Delta & Pine Land Co. 168,200 4,442,162
-------------
Food Products Total 10,323,734
HOUSEHOLD PRODUCTS - 0.9%
Central Garden & Pet Co. (a) 188,600 8,534,150
Spectrum Brands, Inc. (a) 244,300 5,753,265
-------------
Household Products Total 14,287,415
-------------
CONSUMER STAPLES TOTAL 31,147,011
ENERGY - 4.2%
ENERGY EQUIPMENT & SERVICES - 1.6%
Core Laboratories NV (a) 84,200 2,716,292
Gulfmark Offshore, Inc. (a) 261,400 8,435,378
Hanover Compressor Co. (a) 2,659 36,854
See Accompanying Notes to Financial Statements. | 55
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL CAP CORE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
ENERGY - (CONTINUED)
ENERGY EQUIPMENT & SERVICES - (CONTINUED)
Newpark Resources, Inc. (a) 831,000 6,997,020
Oceaneering International, Inc. (a) 103,700 5,538,617
Superior Well Services, Inc. (a) 38,700 893,970
-------------
Energy Equipment & Services Total 24,618,131
OIL, GAS & CONSUMABLE FUELS - 2.6%
Houston Exploration Co. (a) 90,900 6,113,025
Southwestern Energy Co. (a) 159,000 11,670,600
Vintage Petroleum, Inc. 128,200 5,853,612
Warren Resources, Inc. (a) 102,300 1,713,525
Western Gas Resources, Inc. 100,000 5,123,000
Whiting Petroleum Corp. (a) 189,000 8,285,760
-------------
Oil, Gas & Consumable Fuels Total 38,759,522
-------------
ENERGY TOTAL 63,377,653
FINANCIALS - 10.4%
CAPITAL MARKETS - 0.3%
Waddell & Reed Financial, Inc., Class A 221,000 4,278,560
-------------
Capital Markets Total 4,278,560
COMMERCIAL BANKS - 1.9%
EuroBancshares, Inc. (a) 129,200 1,926,372
First Niagara Financial Group, Inc. 465,500 6,721,820
Oriental Financial Group 483,140 5,913,633
Republic Bancorp, Inc. 128,863 1,822,123
SNB Bancshares Inc. (a) 233,700 2,629,125
Taylor Capital Group, Inc. 129,628 4,902,531
UMB Financial Corp. 86,500 5,681,320
-------------
Commercial Banks Total 29,596,924
DIVERSIFIED FINANCIAL SERVICES - 0.5%
Prospect Energy Corp. 158,997 2,122,610
QC Holdings, Inc. (a) 350,900 4,575,736
-------------
Diversified Financial Services Total 6,698,346
INSURANCE - 3.6%
AmerUs Group Co. 75,420 4,326,845
Bristol West Holdings, Inc. 256,100 4,673,825
Direct General Corp. 215,100 4,243,923
EMC Insurance Group, Inc. 193,800 3,498,090
Hilb Rogal & Hobbs Co. 83,000 3,097,560
Horace Mann Educators Corp. 217,000 4,292,260
Hub International Ltd. 210,000 4,762,800
Midland Co. 178,700 6,438,561
National Interstate Corp. 34,200 591,660
Navigators Group, Inc. (a) 152,800 5,702,496
NYMAGIC, Inc. 105,000 2,554,650
Ohio Casualty Corp. 295,600 8,016,672
Phoenix Companies, Inc. 199,900 2,438,780
-------------
Insurance Total 54,638,122
SHARES VALUE ($)
- ----------------------------------------------------------------------
REAL ESTATE - 2.3%
Acadia Realty Trust, REIT 231,100 4,157,489
DiamondRock Hospitality Co., REIT 367,962 4,323,554
First Potomac Realty Trust, REIT 400,000 10,280,000
Gramercy Capital Corp., REIT 272,400 6,526,704
Innkeepers USA Trust, Inc., REIT 466,100 7,201,245
Jones Lang LaSalle, Inc. 57,300 2,639,238
-------------
Real Estate Total 35,128,230
THRIFTS & MORTGAGE FINANCE - 1.8%
Dime Community Bancshares 283,200 4,168,704
Flagstar BanCorp, Inc. 230,600 3,712,660
Jefferson Bancshares, Inc. 266,400 3,447,216
Matrix Bancorp, Inc. (a) 227,400 2,924,364
NewAlliance Bancshares, Inc. 498,500 7,298,040
Webster Financial Corp. 106,300 4,779,248
Willow Grove Bancorp, Inc. 110,132 1,724,667
-------------
Thrifts & Mortgage Finance Total 28,054,899
-------------
FINANCIALS TOTAL 158,395,081
HEALTH CARE - 15.0%
BIOTECHNOLOGY - 2.1%
BioMarin Pharmaceuticals, Inc. (a) 399,850 3,490,690
Cambrex Corp. 488,200 9,256,272
CV Therapeutics, Inc. (a) 184,200 4,927,350
Serologicals Corp. (a) 320,500 7,230,480
Strategic Diagnostics, Inc. (a) 653,200 2,678,120
Threshold Pharmaceuticals, Inc. (a) 288,600 3,939,390
-------------
Biotechnology Total 31,522,302
HEALTH CARE EQUIPMENT & SUPPLIES - 6.1%
Analogic Corp. 158,700 8,000,067
Criticare Systems, Inc. (a) 48,200 245,820
Cytyc Corp. (a) 144,300 3,874,455
Datascope Corp. 229,150 7,108,233
Greatbatch, Inc. (a) 106,200 2,914,128
Haemonetics Corp. (a) 91,900 4,368,007
Invacare Corp. 473,800 19,743,246
Langer, Inc. (a) 320,769 1,630,790
Lifecore Biomedical, Inc. (a) 304,400 3,680,196
STAAR Surgical Co. (a) 645,900 3,558,909
SurModics, Inc. (a) 71,499 2,766,296
Thoratec Corp. (a) 523,100 9,290,256
Viasys Healthcare, Inc. (a) 347,000 8,671,530
West Pharmaceutical Services, Inc. 565,700 16,784,319
-------------
Health Care Equipment & Supplies Total 92,636,252
HEALTH CARE PROVIDERS & SERVICES - 5.4%
LabOne, Inc. (a) 126,400 5,498,400
Life Sciences Research, Inc. (a) 140,074 2,117,919
LifePoint Hospitals, Inc. (a) 189,598 8,291,121
Magellan Health Services, Inc. (a) 176,200 6,193,430
Pediatrix Medical Group, Inc. (a) 212,200 16,301,204
Priority Healthcare Corp., Class B (a) 316,975 8,830,923
PSS World Medical, Inc. (a) 640,700 8,546,938
56 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL CAP CORE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
HEALTH CARE - (CONTINUED)
HEALTH CARE PROVIDERS & SERVICES - (CONTINUED)
Res-Care, Inc. (a) 1,145,925 17,635,786
Triad Hospitals, Inc. (a) 114,800 5,196,996
U.S. Physical Therapy, Inc. (a) 232,300 4,218,568
-------------
Health Care Providers & Services Total 82,831,285
PHARMACEUTICALS - 1.4%
Acusphere, Inc. (a) 425,100 2,342,301
Critical Therapeutics, Inc. (a) 229,200 2,159,064
KV Pharmaceutical Co., Class A (a) 236,800 4,207,936
Perrigo Co. 288,300 4,125,573
Valeant Pharmaceuticals International 431,526 8,665,042
-------------
Pharmaceuticals Total 21,499,916
-------------
HEALTH CARE TOTAL 228,489,755
INDUSTRIALS - 19.0%
AEROSPACE & DEFENSE - 2.0%
Armor Holdings, Inc. (a) 440,265 18,935,798
Ladish Co., Inc. (a) 276,300 4,818,672
Moog, Inc., Class A (a) 234,000 6,907,680
-------------
Aerospace & Defense Total 30,662,150
AIR FREIGHT & LOGISTICS - 0.6%
EGL, Inc. (a) 356,500 9,678,975
-------------
Air Freight & Logistics Total 9,678,975
BUILDING PRODUCTS - 1.2%
Jacuzzi Brands, Inc. (a) 1,122,000 9,043,320
NCI Building Systems, Inc. (a) 222,900 9,092,091
-------------
Building Products Total 18,135,411
COMMERCIAL SERVICES & SUPPLIES - 5.8%
Bennett Environmental, Inc. (a) 500,000 1,425,000
Cornell Companies, Inc. (a) 610,200 8,976,042
Danka Business Systems PLC, ADR (a) 1,600,000 4,272,000
FTI Consulting, Inc. (a) 558,000 14,095,080
G&K Services, Inc., Class A 155,500 6,125,145
HMS Holdings Corp. (a) 257,100 1,781,703
infoUSA, Inc. 358,100 3,803,022
Kforce, Inc. (a) 920,350 9,479,605
McGrath Rentcorp 140,800 3,988,864
Nashua Corp. (a) 169,600 1,051,520
NCO Group, Inc. (a) 368,330 7,609,698
Nobel Learning Communities, Inc. (a) 200,100 1,872,936
RemedyTemp, Inc. (a) 125,210 1,041,747
Spherion Corp. (a) 499,200 3,793,920
Tetra Tech, Inc. (a) 519,100 8,731,262
Unifirst Corp. 291,800 10,233,426
-------------
Commercial Services & Supplies Total 88,280,970
SHARES VALUE ($)
- ----------------------------------------------------------------------
CONSTRUCTION & ENGINEERING - 1.9%
Chicago Bridge & Iron Co., NV, N.Y.
Registered Shares 419,100 13,029,819
EMCOR Group, Inc. (a) 261,500 15,506,950
-------------
Construction & Engineering Total 28,536,769
ELECTRICAL EQUIPMENT - 1.4%
General Cable Corp. (a) 345,900 5,811,120
LSI Industries, Inc. 765,365 14,541,935
Metrologic Instruments, Inc. (a) 12,376 225,120
Wood's (T.B.) Corp. 108,207 779,090
-------------
Electrical Equipment Total 21,357,265
MACHINERY - 4.6%
AGCO Corp. (a) 226,300 4,118,660
Albany International Corp., Class A 600,005 22,122,184
Briggs & Stratton Corp. 173,200 5,990,988
CIRCOR International, Inc. 163,200 4,479,840
Key Technology, Inc. (a)(b) 259,265 3,681,563
Lydall, Inc. (a) 219,300 1,958,349
Nordson Corp. 173,000 6,579,190
Oshkosh Truck Corp. 129,000 5,567,640
Terex Corp. (a) 228,344 11,287,044
Watts Water Technologies, Inc., Class A 170,000 4,904,500
-------------
Machinery Total 70,689,958
ROAD & RAIL - 1.5%
Arkansas Best Corp. 253,000 8,822,110
Kansas City Southern (a) 251,845 5,870,507
RailAmerica, Inc. (a) 376,800 4,483,920
Werner Enterprises, Inc. 240,325 4,155,219
-------------
Road & Rail Total 23,331,756
-------------
INDUSTRIALS TOTAL 290,673,254
INFORMATION TECHNOLOGY - 16.3%
COMMUNICATIONS EQUIPMENT - 0.7%
EFJ, Inc. (a) 193,647 1,992,628
Integral Systems, Inc. 168,100 3,469,584
Performance Technologies, Inc. (a)(b) 751,700 5,374,655
Zhone Technologies, Inc. (a) 732 1,910
-------------
Communications Equipment Total 10,838,777
COMPUTERS & PERIPHERALS - 1.7%
Cray, Inc. (a) 92,044 84,680
Hypercom Corp. (a) 545,800 3,558,616
Imation Corp. 309,500 13,268,265
Presstek, Inc. (a) 397,600 5,160,848
Rimage Corp. (a) 162,900 4,344,543
-------------
Computers & Peripherals Total 26,416,952
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.3%
Agilysys, Inc. 259,713 4,373,567
Benchmark Electronics, Inc. (a) 942,750 28,395,630
Keithley Instruments, Inc. 343,640 5,017,144
LeCroy Corp. (a) 170,200 2,527,470
See Accompanying Notes to Financial Statements. | 57
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL CAP CORE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INFORMATION TECHNOLOGY -- (CONTINUED)
ELECTRONIC EQUIPMENT & INSTRUMENTS -- (CONTINUED)
Merix Corp. (a) 403,600 2,260,160
Rogers Corp. (a) 82,200 3,181,140
Technitrol, Inc. 313,010 4,795,313
-------------
Electronic Equipment & Instruments Total 50,550,424
INTERNET SOFTWARE & SERVICES - 0.7%
S1 Corp. (a) 280,400 1,096,364
Selectica, Inc. (a) 872,800 2,801,688
Tumbleweed Communications Corp. (a) 815,000 3,463,750
webMethods, Inc. (a) 458,820 3,243,857
-------------
Internet Software & Services Total 10,605,659
IT SERVICES - 2.2%
Analysts International Corp. (a) 761,700 2,018,505
Computer Task Group, Inc. (a) 900,200 3,330,740
Inforte Corp. 500,000 2,095,000
ProQuest Co. (a) 394,230 14,271,126
Startek, Inc. 449,900 5,938,680
TNS, Inc. (a) 255,600 6,198,300
-------------
IT Services Total 33,852,351
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 2.4%
ATMI, Inc. (a) 223,347 6,923,757
Exar Corp. (a) 117,201 1,643,158
Fairchild Semiconductor International,
Inc. (a) 587,500 8,730,250
hifn, Inc. (a) 500,000 2,775,000
IXYS Corp. (a) 191,000 2,016,960
ON Semiconductor Corp. (a) 1,153,200 5,962,044
Peak International Ltd. (a) 244,650 741,290
Pericom Semiconductor Corp. (a) 400,460 3,540,066
Ultratech, Inc. (a) 230,600 3,595,054
-------------
Semiconductors & Semiconductor Equipment Total 35,927,579
SOFTWARE - 5.3%
BindView Development Corp. (a) 1,510,500 5,362,124
FARO Technologies, Inc. (a) 165,700 3,229,493
Lawson Software, Inc. (a) 607,787 4,218,042
MapInfo Corp. (a) 249,000 3,050,250
Mediware Information Systems (a) 314,600 2,504,216
Mentor Graphics Corp. (a) 352,400 3,030,640
MSC.Software Corp. (a) 460,515 7,239,296
NetIQ Corp. (a) 343,400 4,203,216
PLATO Learning, Inc. (a) 663,700 5,050,757
Progress Software Corp. (a) 296,500 9,419,805
SafeNet, Inc. (a) 166,900 6,060,139
Sonic Solutions (a) 346,000 7,439,000
Sybase, Inc. (a) 640,600 15,002,852
THQ, Inc. (a) 249,450 5,318,274
-------------
Software Total 81,128,104
-------------
INFORMATION TECHNOLOGY TOTAL 249,319,846
SHARES VALUE ($)
- ----------------------------------------------------------------------
MATERIALS - 6.5%
CHEMICALS - 3.5%
Airgas, Inc. 251,900 7,463,797
Albemarle Corp. 246,360 9,287,772
H.B. Fuller Co. 330,860 10,283,129
MacDermid, Inc. 475,200 12,478,752
Sensient Technologies Corp. 307,800 5,832,810
Spartech Corp. 468,400 9,152,536
-------------
Chemicals Total 54,498,796
CONTAINERS & PACKAGING - 0.7%
Greif, Inc., Class A 170,000 10,217,000
-------------
Containers & Packaging Total 10,217,000
METALS & MINING - 1.9%
Brush Engineered Materials, Inc. (a) 290,800 4,617,904
Foundation Coal Holdings, Inc. 43,100 1,657,195
GrafTech International Ltd. (a) 431,200 2,341,416
Hecla Mining Co. (a) 298,300 1,306,554
Northwest Pipe Co. (a) 303,150 7,848,553
Reliance Steel & Aluminum Co. 219,500 11,618,135
-------------
Metals & Mining Total 29,389,757
PAPER & FOREST PRODUCTS - 0.4%
Buckeye Technologies, Inc. (a) 144,900 1,176,588
Glatfelter 331,440 4,669,990
-------------
Paper & Forest Products Total 5,846,578
-------------
MATERIALS TOTAL 99,952,131
TELECOMMUNICATION SERVICES - 0.6%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.5%
General Communication, Inc.,
Class A (a) 417,300 4,131,270
Premiere Global Services, Inc. (a) 388,300 3,176,294
-------------
Diversified Telecommunication Services Total 7,307,564
WIRELESS TELECOMMUNICATION SERVICES - 0.1%
LCC International, Inc., Class A (a) 560,700 1,401,750
-------------
Wireless Telecommunication Services Total 1,401,750
-------------
TELECOMMUNICATION SERVICES TOTAL 8,709,314
UTILITIES - 2.7%
ELECTRIC UTILITIES - 0.2%
IDACORP, Inc. 122,800 3,699,964
-------------
Electric Utilities Total 3,699,964
GAS UTILITIES - 1.6%
New Jersey Resources Corp. 148,777 6,840,767
Northwest Natural Gas Co. 111,300 4,142,586
South Jersey Industries, Inc. 193,344 5,634,044
Southwest Gas Corp. 301,500 8,258,085
-------------
Gas Utilities Total 24,875,482
58 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL CAP CORE FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
MULTI-UTILITIES - 0.3%
California Water Service Group 104,200 4,293,040
-------------
Multi-Utilities Total 4,293,040
WATER UTILITIES - 0.6%
American States Water Co. 135,150 4,522,119
Aqua America, Inc. 101,968 3,876,823
-------------
Water Utilities Total 8,398,942
-------------
UTILITIES TOTAL 41,267,428
-------------
Total Common Stocks
(cost of $1,171,029,274) 1,469,616,714
PAR ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATION - 4.0%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury
Note maturing 02/15/10, market
value of $62,833,875(repurchase
proceeds $61,616,170) 61,600,000 61,600,000
-------------
Total Short-Term Obligation
(cost of $61,600,000) 61,600,000
TOTAL INVESTMENTS - 100.2%
(COST OF $1,232,629,274) (c) 1,531,216,714
OTHER ASSETS & LIABILITIES, NET - (0.2)% (3,720,718)
NET ASSETS - 100.0% 1,527,495,996
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Investments in affiliated companies at September 30, 2005:
An affiliated company is a company in which the Fund has ownership of at
least 5% of the voting shares outstanding.
Security Name: Checkers Drive-In Restaurant, Inc.
Shares as of 09/30/04: 607,900
Shares sold: (23,500)
Shares as of 09/30/05: 584,400
Net realized gain: $ 63,699
Dividend income earned: $ --
Value at end of period: $ 8,929,632
Security Name: Fox & Hound Restaurant Group
(formerly Total Entertainment Restaurant Corp.)
Shares as of 09/30/04: 501,000
Shares purchased: --
Shares as of 09/30/05: 501,000
Net realized gain or loss: $ --
Dividend income earned: $ --
Value at end of period: $ 5,100,180
Security Name: Key Technology, Inc.
Shares as of 09/30/04: 259,265
Shares purchased: --
Shares as of 09/30/05: 259,265
Net realized gain or loss: $ --
Dividend income earned: $ --
Value at end of period: $ 3,681,563
Security Name: Performance Technologies, Inc.
Shares as of 09/30/04: 609,400
Shares purchased: 142,300
Shares as of 09/30/05: 751,700
Net realized gain or loss: $ --
Dividend income earned: $ --
Value at end of period: $ 5,374,655
(c) Cost for federal income tax purposes is $1,233,722,859.
At September 30, 2005, the Fund held investments in the following sectors:
% OF
SECTOR (UNAUDITED) NET ASSETS
------------------ ----------
Consumer Discretionary 19.5%
Industrials 19.0
Information Technology 16.3
Health Care 15.0
Financials 10.4
Materials 6.5
Energy 4.2
Utilities 2.7
Consumer Staples 2.0
Telecommunication Services 0.6
Short-Term Obligation 4.0
Other Assets & Liabilities, Net (0.2)
-----
100.0%
=====
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements. | 59
INVESTMENT PORTFOLIO ___________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL COMPANY EQUITY FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - 97.5%
CONSUMER DISCRETIONARY - 15.7%
AUTOMOBILES - 0.7%
Thor Industries, Inc. 10,758 365,772
Winnebago Industries, Inc. 43,780 1,268,307
-------------
Automobiles Total 1,634,079
DIVERSIFIED CONSUMER SERVICES - 0.7%
Education Management Corp. (a) 52,400 1,689,376
-------------
Diversified Consumer Services Total 1,689,376
HOTELS, RESTAURANTS & LEISURE - 4.0%
Gaylord Entertainment Co. (a) 76,940 3,666,191
Kerzner International Ltd. (a) 27,220 1,512,071
Lakes Entertainment, Inc. (a) 30,040 301,902
Pinnacle Entertainment, Inc. (a) 63,380 1,161,755
RARE Hospitality International, Inc. (a) 56,560 1,453,592
Scientific Games Corp., Class A (a) 37,720 1,169,320
-------------
Hotels, Restaurants & Leisure Total 9,264,831
HOUSEHOLD DURABLES - 0.4%
Yankee Candle Co., Inc. 36,530 894,985
-------------
Household Durables Total 894,985
INTERNET & CATALOG RETAIL - 1.6%
Blue Nile, Inc. (a) 37,280 1,179,539
Coldwater Creek, Inc. (a) 56,870 1,434,261
Netflix, Inc. (a) 23,710 616,223
Overstock.com, Inc. (a) 12,950 496,633
-------------
Internet & Catalog Retail Total 3,726,656
MEDIA - 3.3%
aQuantive, Inc. (a) 34,490 694,284
Arbitron, Inc. 8,820 351,389
Lions Gate Entertainment Corp. (a) 187,910 1,792,661
R.H. Donnelley Corp. (a) 28,910 1,828,847
Radio One, Inc., Class D (a) 131,870 1,734,090
Valassis Communications, Inc. (a) 31,030 1,209,549
-------------
Media Total 7,610,820
SPECIALTY RETAIL - 3.7%
Charlotte Russe Holding, Inc. (a) 33,040 440,093
Finish Line, Inc., Class A 82,430 1,202,654
GameStop Corp., Class A (a) 35,350 1,112,464
Guitar Center, Inc. (a) 9,990 551,548
Hibbett Sporting Goods, Inc. (a) 35,702 794,358
Hot Topic, Inc. (a) 60,600 930,816
Jarden Corp. (a) 17,215 707,020
PETCO Animal Supplies, Inc. (a) 22,960 485,834
Talbots, Inc. 42,660 1,276,387
Tuesday Morning Corp. 48,310 1,249,780
-------------
Specialty Retail Total 8,750,954
SHARES VALUE ($)
- ----------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS - 1.3%
Carter's, Inc. (a) 7,230 410,664
Jos. A. Bank Clothiers, Inc. (a) 32,680 1,412,430
Wolverine World Wide, Inc. 58,630 1,234,161
-------------
Textiles, Apparel & Luxury Goods Total 3,057,255
-------------
CONSUMER DISCRETIONARY TOTAL 36,628,956
CONSUMER STAPLES - 1.4%
FOOD & STAPLES RETAILING - 0.2%
United Natural Foods, Inc. (a) 16,480 582,733
-------------
Food & Staples Retailing Total 582,733
FOOD PRODUCTS - 0.5%
Delta & Pine Land Co. 40,020 1,056,928
-------------
Food Products Total 1,056,928
PERSONAL PRODUCTS - 0.7%
Nu Skin Enterprises, Inc., Class A 83,710 1,594,675
-------------
Personal Products Total 1,594,675
-------------
CONSUMER STAPLES TOTAL 3,234,336
ENERGY - 6.8%
ENERGY EQUIPMENT & SERVICES - 2.6%
Atwood Oceanics, Inc. (a) 17,780 1,497,254
CAL Dive International, Inc. (a) 24,940 1,581,446
Dril-Quip, Inc. (a) 8,400 403,200
Energy Conversion Devices, Inc. (a) 22,860 1,025,957
Hydril (a) 13,430 921,835
Tetra Technologies, Inc. (a) 21,510 671,542
-------------
Energy Equipment & Services Total 6,101,234
OIL, GAS & CONSUMABLE FUELS - 4.2%
Cheniere Energy, Inc. (a) 14,890 615,850
Denbury Resources, Inc. (a) 37,480 1,890,491
Encore Acquisition Co. (a) 18,090 702,796
Frontier Oil Corp. 17,080 757,498
Holly Corp. 11,760 752,405
KFx, Inc. (a) 13,380 229,066
Remington Oil & Gas Corp. (a) 44,830 1,860,445
St. Mary Land & Exploration Co. 16,980 621,468
Superior Energy Services, Inc. (a) 102,620 2,369,496
-------------
Oil, Gas & Consumable Fuels Total 9,799,515
-------------
ENERGY TOTAL 15,900,749
FINANCIALS - 9.4%
CAPITAL MARKETS - 2.1%
Affiliated Managers Group, Inc. (a) 66,620 4,824,620
-------------
Capital Markets Total 4,824,620
60 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL COMPANY EQUITY FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
FINANCIALS - (CONTINUED)
COMMERCIAL BANKS - 4.7%
Boston Private Financial Holdings, Inc. 105,690 2,805,013
City National Corp. 25,000 1,752,250
Fidelity Bankshares, Inc. 46,930 1,433,711
Prosperity Bancshares, Inc. 45,710 1,382,727
South Financial Group, Inc. 49,460 1,327,506
Texas Capital Bancshares, Inc. (a) 55,650 1,176,998
Westamerica Bancorporation 21,710 1,121,322
-------------
Commercial Banks Total 10,999,527
CONSUMER FINANCE - 1.1%
Nelnet, Inc., Class A (a) 31,160 1,184,391
World Acceptance Corp. (a) 52,692 1,338,904
-------------
Consumer Finance Total 2,523,295
INSURANCE - 0.4%
Selective Insurance Group, Inc. 22,280 1,089,492
-------------
Insurance Total 1,089,492
REAL ESTATE - 1.1%
Bluegreen Corp. (a) 66,565 1,174,872
Strategic Hotel Capital, Inc., REIT 46,073 841,293
Washington REIT 15,540 483,450
-------------
Real Estate Total 2,499,615
-------------
FINANCIALS TOTAL 21,936,549
HEALTH CARE - 18.5%
BIOTECHNOLOGY - 4.2%
Abgenix, Inc. (a) 35,320 447,858
Arena Pharmaceuticals, Inc. (a) 31,150 308,385
AtheroGenics, Inc. (a) 47,210 756,776
CV Therapeutics, Inc. (a) 42,850 1,146,237
Exelixis, Inc. (a) 128,500 985,595
Human Genome Sciences, Inc. (a) 58,380 793,384
Illumina, Inc. (a) 100,470 1,287,021
Martek Biosciences Corp. (a) 14,790 519,573
Medarex, Inc. (a) 43,050 409,836
Protein Design Labs, Inc. (a) 76,590 2,144,520
Vertex Pharmaceuticals, Inc. (a) 44,650 997,927
-------------
Biotechnology Total 9,797,112
HEALTH CARE EQUIPMENT & SUPPLIES - 6.3%
Advanced Neuromodulation
Systems, Inc. (a) 14,530 689,594
American Medical Systems Holdings,
Inc. (a) 112,750 2,271,912
Aspect Medical Systems, Inc. (a) 53,060 1,572,168
Foxhollow Technologies, Inc. (a) 7,080 337,079
Hologic, Inc. (a) 8,150 470,662
Immucor, Inc. (a) 83,020 2,278,069
Intuitive Surgical, Inc. (a) 14,050 1,029,724
Kyphon, Inc. (a) 48,840 2,146,030
SHARES VALUE ($)
- ----------------------------------------------------------------------
Meridian Bioscience, Inc. 30,740 636,318
Nektar Therapeutics (a) 33,000 559,350
Respironics, Inc. (a) 27,662 1,166,783
Somanetics Corp. (a) 16,650 416,250
SonoSite, Inc. (a) 37,645 1,117,304
-------------
Health Care Equipment & Supplies Total 14,691,243
HEALTH CARE PROVIDERS & SERVICES - 4.8%
Allion Healthcare, Inc. (a) 25,760 463,937
Apria Healthcare Group, Inc. (a) 27,070 863,804
HealthExtras, Inc. (a) 30,560 653,373
LifePoint Hospitals, Inc. (a) 43,690 1,910,564
Pediatrix Medical Group, Inc. (a) 9,470 727,485
PRA International (a) 20,780 629,842
Psychiatric Solutions, Inc. (a) 4,940 267,896
United Surgical Partners
International, Inc. (a) 14,930 583,912
VCA Antech, Inc. (a) 190,682 4,866,205
-------------
Health Care Providers & Services Total 10,967,018
PHARMACEUTICALS - 3.2%
Amylin Pharmaceuticals, Inc. (a) 43,080 1,498,753
Connetics Corp. (a) 43,570 736,769
Medicis Pharmaceutical Corp., Class A 23,770 773,951
MGI Pharma, Inc. (a) 46,210 1,077,155
New River Pharmaceuticals, Inc. (a) 13,820 662,531
Par Pharmaceutical Companies, Inc. (a) 18,560 494,067
Penwest Pharmaceuticals Co. (a) 50,381 883,179
Salix Pharmaceuticals Ltd. (a) 63,290 1,344,913
-------------
Pharmaceuticals Total 7,471,318
-------------
HEALTH CARE TOTAL 42,926,691
INDUSTRIALS - 12.9%
AEROSPACE & DEFENSE - 1.2%
Aviall, Inc. (a) 13,660 461,435
DRS Technologies, Inc. 9,130 450,657
Teledyne Technologies, Inc. (a) 52,390 1,805,883
-------------
Aerospace & Defense Total 2,717,975
AIR FREIGHT & LOGISTICS - 3.0%
HUB Group, Inc., Class A (a) 88,436 3,246,486
UTI Worldwide, Inc. 47,630 3,700,851
-------------
Air Freight & Logistics Total 6,947,337
AIRLINES - 0.6%
AirTran Holdings, Inc. (a) 72,490 917,723
Frontier Airlines, Inc. (a) 48,200 471,396
-------------
Airlines Total 1,389,119
COMMERCIAL SERVICES & SUPPLIES - 4.3%
John H. Harland Co. 8,360 371,184
Korn/Ferry International (a) 73,884 1,210,959
Labor Ready, Inc. (a) 66,851 1,714,728
Mine Safety Appliances Co. 35,850 1,387,395
Navigant Consulting, Inc. (a) 21,300 408,108
Resources Connection, Inc. (a) 39,590 1,173,052
Senomyx, Inc. (a) 42,803 728,935
See Accompanying Notes to Financial Statements. | 61
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL COMPANY EQUITY FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
INDUSTRIALS - (CONTINUED)
COMMERCIAL SERVICES & SUPPLIES - (CONTINUED)
Strayer Education, Inc. 6,050 571,846
Waste Connections, Inc. (a) 68,160 2,391,053
-------------
Commercial Services & Supplies Total 9,957,260
ELECTRICAL EQUIPMENT - 0.4%
Evergreen Solar, Inc. (a) 92,920 866,944
-------------
Electrical Equipment Total 866,944
INDUSTRIAL CONGLOMERATES - 0.2%
Walter Industries, Inc. 11,350 555,242
-------------
Industrial Conglomerates Total 555,242
MACHINERY - 2.7%
Actuant Corp., Class A 15,150 709,020
Bucyrus International, Inc., Class A 22,170 1,089,212
Clarcor, Inc. 15,930 457,510
ESCO Technologies, Inc. (a) 13,000 650,910
JLG Industries, Inc. 20,360 744,972
Manitowoc Co., Inc. 11,420 573,855
Wabtec Corp. 78,590 2,143,935
-------------
Machinery Total 6,369,414
ROAD & RAIL - 0.5%
Florida East Coast Industries, Inc. 25,660 1,162,141
-------------
Road & Rail Total 1,162,141
-------------
INDUSTRIALS TOTAL 29,965,432
INFORMATION TECHNOLOGY - 26.2%
COMMUNICATIONS EQUIPMENT - 3.9%
Adtran, Inc. 32,010 1,008,315
Anaren, Inc. (a) 1,689 23,815
AudioCodes Ltd. (a) 131,310 1,445,723
Avocent Corp. (a) 37,500 1,186,500
C-COR, Inc. (a) 46,460 313,605
Emulex Corp. (a) 17,630 356,302
F5 Networks, Inc. (a) 13,130 570,761
NICE Systems Ltd., ADR (a) 26,100 1,179,198
Packeteer, Inc. (a) 103,880 1,303,694
Plantronics, Inc. 17,300 533,013
SiRF Technology Holdings, Inc. (a) 38,006 1,145,121
-------------
Communications Equipment Total 9,066,047
COMPUTERS & PERIPHERALS - 1.4%
M-Systems Flash Disk Pioneers Ltd. (a) 51,450 1,539,384
Neoware Systems, Inc. (a) 55,212 924,249
Stratasys, Inc. (a) 30,200 896,940
-------------
Computers & Peripherals Total 3,360,573
SHARES VALUE ($)
- ----------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS - 3.5%
Anixter International, Inc. (a) 37,070 1,495,033
Daktronics, Inc. 58,960 1,413,861
Flir Systems, Inc. (a) 20,200 597,516
Global Imaging Systems, Inc. (a) 45,398 1,545,802
Itron, Inc. (a) 28,760 1,313,181
Plexus Corp. (a) 103,410 1,767,277
-------------
Electronic Equipment & Instruments Total 8,132,670
INTERNET SOFTWARE & SERVICES - 3.3%
CNET Networks, Inc. (a) 53,920 731,694
Digital River, Inc. (a) 25,820 899,827
Digitas, Inc. (a) 162,780 1,849,181
EarthLink, Inc. (a) 69,940 748,358
Equinix, Inc. (a) 13,600 566,440
InfoSpace, Inc. (a) 9,940 237,268
Openwave Systems, Inc. (a) 30,850 554,683
Secure Computing Corp. (a) 106,620 1,210,137
ValueClick, Inc. (a) 44,790 765,461
-------------
Internet Software & Services Total 7,563,049
IT SERVICES - 2.4%
CACI International, Inc., Class A (a) 31,770 1,925,262
Euronet Worldwide, Inc. (a) 39,460 1,167,621
MPS Group, Inc. (a) 29,430 347,274
MTC Technologies, Inc. (a) 25,200 805,896
Sykes Enterprises, Inc. (a) 101,760 1,210,944
-------------
IT Services Total 5,456,997
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 5.8%
Cymer, Inc. (a) 49,980 1,565,374
Cypress Semiconductor Corp. (a) 150,800 2,269,540
Entegris, Inc. (a) 182,646 2,063,900
Microsemi Corp. (a) 95,201 2,431,434
Semtech Corp. (a) 68,340 1,125,560
Skyworks Solutions, Inc. (a) 131,660 924,253
Tessera Technologies, Inc. (a) 64,800 1,938,168
Virage Logic Corp. (a) 163,950 1,270,612
-------------
Semiconductors & Semiconductor Equipment Total 13,588,841
SOFTWARE - 5.9%
American Reprographics Co. (a) 30,839 527,347
Ansys, Inc. (a) 44,510 1,713,190
Epicor Software Corp. (a) 78,450 1,019,850
Hyperion Solutions Corp. (a) 43,570 2,119,680
Kronos, Inc. (a) 22,100 986,544
Macrovision Corp. (a) 16,660 318,206
Micros Systems, Inc. (a) 13,000 568,750
Open Solutions, Inc. (a) 56,400 1,230,648
Parametric Technology Corp. (a) 112,270 782,522
Progress Software Corp. (a) 78,770 2,502,523
Quest Software, Inc. (a) 64,820 976,837
RSA Security, Inc. (a) 68,500 870,635
TIBCO Software, Inc. (a) 13,960 116,706
-------------
Software Total 13,733,438
-------------
INFORMATION TECHNOLOGY TOTAL 60,901,615
62 | See Accompanying Notes to Financial Statements.
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA SMALL COMPANY EQUITY FUND
SHARES VALUE ($)
- ----------------------------------------------------------------------
COMMON STOCKS - (CONTINUED)
MATERIALS - 3.8%
CHEMICALS - 1.6%
Airgas, Inc. 52,170 1,545,797
Symyx Technologies, Inc. (a) 73,190 1,911,723
UAP Holding Corp. 12,530 226,793
-------------
Chemicals Total 3,684,313
CONSTRUCTION MATERIALS - 0.4%
Eagle Materials, Inc. 7,710 935,763
-------------
Construction Materials Total 935,763
METALS & MINING - 1.8%
Allegheny Technologies, Inc. 25,170 779,767
AMCOL International Corp. 29,960 571,337
Cleveland-Cliffs, Inc. 8,870 772,666
Foundation Coal Holdings, Inc. 24,590 945,485
Quanex Corp. 7,960 527,111
Reliance Steel & Aluminum Co. 10,700 566,351
-------------
Metals & Mining Total 4,162,717
-------------
MATERIALS TOTAL 8,782,793
TELECOMMUNICATION SERVICES - 1.8%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.1%
Tekelec (a) 13,420 281,149
-------------
Diversified Telecommunication Services Total 281,149
WIRELESS TELECOMMUNICATION SERVICES - 1.7%
Alamosa Holdings, Inc. (a) 62,960 1,077,246
Dobson Communications Corp.,
Class A (a) 54,770 420,634
Jamdat Mobile, Inc. (a) 5,110 107,310
SBA Communications Corp.,
Class A (a) 108,321 1,673,559
SpectraLink Corp. 49,328 628,932
-------------
Wireless Telecommunication Services Total 3,907,681
-------------
TELECOMMUNICATION SERVICES TOTAL 4,188,830
UTILITIES - 1.0%
GAS UTILITIES - 1.0%
Energen Corp. 55,860 2,416,504
-------------
Gas Utilities Total 2,416,504
-------------
UTILITIES TOTAL 2,416,504
-------------
Total Common Stocks
(cost of $201,660,857) 226,882,455
SHARES VALUE ($)
- ----------------------------------------------------------------------
INVESTMENT COMPANIES - 2.1%
iShares Dow Jones U.S. Real Estate
Index Fund 18,450 1,185,782
iShares Nasdaq Biotechnology
Index Fund (a) 46,810 3,604,370
-------------
Total Investment Companies
(cost of $4,564,622) 4,790,152
PAR ($)
- ----------------------------------------------------------------------
SHORT-TERM OBLIGATION - 1.4%
Repurchase agreement with State
Street Bank & Trust Co., dated
09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury
Bond maturing 05/15/17, market
value of $3,375,469 (repurchase
proceeds $3,309,869) 3,309,000 3,309,000
-------------
Total Short-Term Obligation
(cost of $3,309,000) 3,309,000
TOTAL INVESTMENTS - 101.0%
(COST OF $209,534,479) (b) 234,981,607
OTHER ASSETS & LIABILITIES, NET - (1.0)% (2,388,338)
NET ASSETS - 100.0% 232,593,269
NOTES TO INVESTMENT PORTFOLIO:
(a) Non-income producing security.
(b) Cost for federal income tax purposes is $210,075,649.
At September 30, 2005, the Fund held investments in the following sectors:
% OF
SECTOR (UNAUDITED) NET ASSETS
------------------ ----------
Information Technology 26.2%
Health Care 18.5
Consumer Discretionary 15.7
Industrials 12.9
Financials 9.4
Energy 6.8
Materials 3.8
Telecommunication Services 1.8
Consumer Staples 1.4
Utilities 1.0
Investment Companies 2.1
Short-Term Obligation 1.4
Other Assets & Liabilities, Net (1.0)
-----
100.0%
=====
ACRONYM NAME
------- ----
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements. | 63
This page intentionally left blank.
STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED
ALLOCATION GROWTH VALUE
FUND ($) FUND ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------
ASSETS
Unaffiliated investments, at identified cost 348,053,706 1,336,145,561 384,938,053
Affiliated investments, at identified cost -- -- --
----------- ------------- -----------
Total investments, at identified cost 348,053,706 1,336,145,561 384,938,053
----------- ------------- -----------
Unaffiliated investments, at value 386,767,920 1,537,495,127 432,976,287
Affiliated investments, at value -- -- --
----------- ------------- -----------
Total investments, at value 386,767,920 1,537,495,127 432,976,287
Cash 88,149 990 786
Foreign currency (cost of $13,618) 13,189 -- --
Receivable for:
Investments sold 3,658,980 34,618,467 --
Fund shares sold 78,469 1,177,915 507,987
Interest 1,200,761 1,261 293
Dividends 321,476 936,651 459,415
Foreign tax reclaim 34,981 50,257 --
Futures variation margin 22,188 -- --
Expense reimbursement due from Investment Advisor -- -- --
Deferred Trustees' compensation plan 37,523 92,150 31,538
----------- ------------- -----------
Total assets 392,223,636 1,574,372,818 433,976,306
- -------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for:
Investments purchased on a delayed delivery basis 603,533 -- --
Investments purchased 3,829,249 40,885,238 --
Fund shares repurchased 1,127,273 5,476,997 2,519,326
Investment advisory fee 209,626 638,295 244,537
Administration fee 21,706 62,887 23,430
Transfer agent fee 77,635 241,410 59,687
Pricing and bookkeeping fees 22,693 11,013 4,700
Merger costs -- 63,949 --
Trustees' fees 1,000 1,000 1,000
Distribution and service fees 71,390 101,733 41,286
Custody fee 23,889 3,596 2,310
Chief compliance officer expenses and fees 1,279 2,860 1,330
Deferred Trustees' fees 37,523 92,150 31,538
Other liabilities 65,230 45,203 46,907
----------- ------------- -----------
Total liabilities 6,092,026 47,626,331 2,976,051
NET ASSETS 386,131,610 1,526,746,487 431,000,255
- -------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 322,717,326 1,551,511,921 356,449,199
Undistributed (overdistributed) net investment income (93,970) 4,367,800 319,610
Accumulated net investment loss -- -- --
Accumulated net realized gain (loss) 24,873,234 (230,482,800) 26,193,212
Unrealized appreciation (depreciation) on:
Investments 38,714,214 201,349,566 48,038,234
Foreign currency translations (2,735) -- --
Futures contracts (76,459) -- --
----------- ------------- -----------
NET ASSETS 386,131,610 1,526,746,487 431,000,255
COLUMBIA
COLUMBIA COLUMBIA SMALL
COMMON SMALL COMPANY
STOCK CAP CORE EQUITY
FUND ($) FUND ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------
ASSETS
Unaffiliated investments, at identified cost 436,339,276 1,211,801,940 209,534,479
Affiliated investments, at identified cost -- 20,827,334 --
----------- ------------- -----------
Total investments, at identified cost 436,339,276 1,232,629,274 209,534,479
----------- ------------- -----------
Unaffiliated investments, at value 515,420,321 1,508,130,684 234,981,607
Affiliated investments, at value -- 23,086,030 --
----------- ------------- -----------
Total investments, at value 515,420,321 1,531,216,714 234,981,607
Cash 120 12,652 819
Foreign currency (cost of $13,618) -- -- --
Receivable for:
Investments sold 5,495,626 3,935,103 5,706,332
Fund shares sold 52,020 732,733 117,943
Interest 577 5,390 289
Dividends 324,797 957,802 32,432
Foreign tax reclaim 1,248 2,045 --
Futures variation margin -- -- --
Expense reimbursement due from Investment Advisor 5,106 -- --
Deferred Trustees' compensation plan 40,091 46,833 27,723
----------- ------------- -----------
Total assets 521,339,906 1,536,909,272 240,867,145
- -------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for:
Investments purchased on a delayed delivery basis -- -- --
Investments purchased 1,525,447 4,284,732 7,535,232
Fund shares repurchased 1,411,982 3,732,724 432,190
Investment advisory fee 301,540 880,168 145,962
Administration fee 30,738 82,344 13,039
Transfer agent fee 85,971 114,804 40,970
Pricing and bookkeeping fees 7,785 11,570 5,036
Merger costs 63,913 -- --
Trustees' fees 1,000 1,000 1,000
Distribution and service fees 60,904 169,268 23,537
Custody fee 3,000 4,300 2,500
Chief compliance officer expenses and fees 1,476 2,764 1,052
Deferred Trustees' fees 40,091 46,833 27,723
Other liabilities 145,722 82,769 45,635
----------- ------------- -----------
Total liabilities 3,679,569 9,413,276 8,273,876
NET ASSETS 517,660,337 1,527,495,996 232,593,269
- -------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 446,687,252 1,125,578,268 192,297,877
Undistributed (overdistributed) net investment income 651,326 -- --
Accumulated net investment loss -- (21,979) (15,054)
Accumulated net realized gain (loss) (8,759,286) 103,352,267 14,863,318
Unrealized appreciation (depreciation) on:
Investments 79,081,045 298,587,440 25,447,128
Foreign currency translations -- -- --
Futures contracts -- -- --
----------- ------------- -----------
NET ASSETS 517,660,337 1,527,495,996 232,593,269
See Accompanying Notes to Financial Statements. | 65
STATEMENTS OF ASSETS AND LIABILITIES ___________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED
ALLOCATION GROWTH VALUE
FUND ($) FUND ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------
CLASS A
Net assets 4,206,287 10,421,714 4,269,327
Shares outstanding 255,441 493,604 292,407
Net asset value per share (a) 16.47 21.11 14.60
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 17.47 22.40 15.49
- -------------------------------------------------------------------------------------------------------------
CLASS B
Net assets 7,165,940 7,799,312 3,974,128
Shares outstanding 435,203 388,635 284,634
Net asset value and offering price per share (a) 16.47 20.07 13.96
- -------------------------------------------------------------------------------------------------------------
CLASS C
Net assets 704,408 1,419,101 452,516
Shares outstanding 42,769 70,615 32,462
Net asset value and offering price per share (a) 16.47 20.10 13.94
- -------------------------------------------------------------------------------------------------------------
CLASS G
Net assets 21,982,280 46,275,732 4,325,565
Shares outstanding 1,335,259 2,379,228 309,631
Net asset value and offering price per share (a) 16.46 19.45 13.97
- -------------------------------------------------------------------------------------------------------------
CLASS T
Net assets 184,795,054 218,094,907 134,792,178
Shares outstanding 11,211,185 10,394,849 9,231,802
Net asset value per share (a) 16.48 20.98 14.60
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 17.49 22.26 15.49
- -------------------------------------------------------------------------------------------------------------
CLASS Z
Net assets 167,277,641 1,242,735,721 283,186,541
Shares outstanding 10,152,341 57,801,146 19,040,508
Net asset value, offering and redemption price per share 16.48 21.50 14.87
COLUMBIA
COLUMBIA COLUMBIA SMALL
COMMON SMALL COMPANY
STOCK CAP CORE EQUITY
FUND ($) FUND ($) FUND ($)
- -------------------------------------------------------------------------------------------------------------
CLASS A
Net assets 10,392,939 211,527,352 5,286,583
Shares outstanding 764,820 10,946,737 291,282
Net asset value per share (a) 13.59 19.32 18.15
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 14.42 20.50 19.26
- -------------------------------------------------------------------------------------------------------------
CLASS B
Net assets 6,627,877 42,438,769 2,398,112
Shares outstanding 505,016 2,287,104 142,594
Net asset value and offering price per share (a) 13.12 18.56 16.82
- -------------------------------------------------------------------------------------------------------------
CLASS C
Net assets 605,065 56,162,974 1,073,972
Shares outstanding 46,080 3,024,261 64,050
Net asset value and offering price per share (a) 13.13 18.57 16.77
- -------------------------------------------------------------------------------------------------------------
CLASS G
Net assets 9,217,950 8,962,507 3,675,638
Shares outstanding 708,913 487,190 218,972
Net asset value and offering price per share (a) 13.00 18.40 16.79
- -------------------------------------------------------------------------------------------------------------
CLASS T
Net assets 180,344,736 150,041,997 67,373,851
Shares outstanding 13,342,034 7,833,382 3,720,052
Net asset value per share (a) 13.52 19.15 18.11
Maximum sales charge 5.75% 5.75% 5.75%
Maximum offering price per share (b) 14.34 20.32 19.21
- -------------------------------------------------------------------------------------------------------------
CLASS Z
Net assets 310,471,770 1,058,362,397 152,785,113
Shares outstanding 22,728,374 54,163,597 7,951,333
Net asset value, offering and redemption price per share 13.66 19.54 19.22
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
66 | See Accompanying Notes to Financial Statements.
STATEMENTS OF OPERATIONS _______________________________________________________
FOR THE YEAR ENDED SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
COLUMBIA COLUMBIA COLUMBIA
ASSET LARGE CAP DISCIPLINED
ALLOCATION GROWTH VALUE
FUND ($) FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
INCOME
Dividends 5,283,559 17,442,830 10,946,438
Interest 7,149,598 586,578 41,435
Foreign withholding tax (138,877) (141,047) --
------------ ------------ ------------
Total income 12,294,280 17,888,361 10,987,873
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 2,685,695 7,192,091 3,085,211
Administration fee 273,139 707,053 293,562
Distribution fee:
Class B 46,219 43,385 25,393
Class C 4,518 8,211 3,033
Class G 204,207 318,849 40,322
Service fee:
Class A 8,822 18,679 8,463
Class B 15,406 14,462 8,457
Class C 1,506 2,737 1,011
Class G 94,250 147,161 18,610
Shareholder service fee-Class T 558,113 664,958 406,788
Transfer agent fee 887,150 2,390,689 659,012
Pricing and bookkeeping fees 164,954 115,542 56,790
Trustees' fees 16,211 29,388 16,497
Custody fee 231,560 41,656 22,262
Merger costs -- 63,949 --
Chief compliance officer expenses and fees (See Note 4) 4,670 8,513 4,793
Non-recurring costs (See Note 9) 7,420 21,580 7,982
Other expenses 229,637 385,384 185,968
------------ ------------ ------------
Total expenses 5,433,477 12,174,287 4,844,154
Expenses waived or reimbursed by Investment Advisor -- -- --
Fees waived by Transfer Agent (21,634) (57,245) (14,456)
Custody earnings credit (1,820) (79) (2,732)
Non-recurring costs assumed by
Investment Advisor (See Note 9) (7,420) (21,580) (7,982)
------------ ------------ ------------
Net expenses 5,402,603 12,095,383 4,818,984
------------ ------------ ------------
Net Investment Income (Loss) 6,891,677 5,792,978 6,168,889
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY, FUTURES CONTRACTS AND FOREIGN CAPITAL GAINS TAX
Net realized gain (loss) on:
Unaffiliated investments 38,316,449 150,841,082 37,360,323
Affiliated investments -- -- --
Foreign currency transactions (110,274) -- --
Futures contracts 86,771 -- --
------------ ------------ ------------
Net realized gain 38,292,946 150,841,082 37,360,323
------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on:
Investments (1,123,182) 2,914,418 22,679,978
Foreign currency translations (2,152) -- --
Futures contracts (76,459) -- --
Foreign capital gains tax 28,954 -- --
------------ ------------ ------------
Net change in unrealized appreciation (depreciation) (1,172,839) 2,914,418 22,679,978
------------ ------------ ------------
Net Gain 37,120,107 153,755,500 60,040,301
------------ ------------ ------------
Net Increase Resulting from Operations 44,011,784 159,548,478 66,209,190
COLUMBIA
COLUMBIA COLUMBIA SMALL
COMMON SMALL COMPANY
STOCK CAP CORE EQUITY
FUND ($) FUND ($) FUND ($)
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME
INCOME
Dividends 8,067,674 11,290,903 698,507
Interest 125,900 1,804,927 162,055
Foreign withholding tax (36,335) (43,860) (487)
------------ ------------ ------------
Total income 8,157,239 13,051,970 860,075
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment advisory fee 3,267,063 11,013,724 2,372,659
Administration fee 312,885 1,062,628 211,957
Distribution fee:
Class B 37,936 315,878 16,189
Class C 3,470 478,354 7,976
Class G 85,698 68,965 26,749
Service fee:
Class A 23,803 538,558 12,855
Class B 12,670 105,293 5,396
Class C 1,159 159,451 2,659
Class G 39,553 31,830 12,346
Shareholder service fee-Class T 537,492 451,624 206,720
Transfer agent fee 1,007,385 1,280,874 629,901
Pricing and bookkeeping fees 74,988 134,932 57,949
Trustees' fees 16,056 42,798 15,261
Custody fee 32,915 52,224 27,721
Merger costs 63,913 -- --
Chief compliance officer expenses and fees (See Note 4) 4,786 9,073 4,327
Non-recurring costs (See Note 9) 8,084 29,179 6,128
Other expenses 237,334 420,262 186,179
------------ ------------ ------------
Total expenses 5,767,190 16,195,647 3,802,972
Expenses waived or reimbursed by Investment Advisor (369,244) -- --
Fees waived by Transfer Agent (40,455) (9,893) (45,471)
Custody earnings credit (10) (4,003) (1,228)
Non-recurring costs assumed by
Investment Advisor (See Note 9) (8,084) (29,179) (6,128)
------------ ------------ ------------
Net expenses 5,349,397 16,152,572 3,750,145
------------ ------------ ------------
Net Investment Income (Loss) 2,807,842 (3,100,602) (2,890,070)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY,
FUTURES CONTRACTS AND FOREIGN CAPITAL GAINS TAX
Net realized gain (loss) on:
Unaffiliated investments 30,797,221 123,589,248 52,614,588
Affiliated investments -- 63,699 --
Foreign currency transactions -- -- --
Futures contracts -- -- --
------------ ------------ ------------
Net realized gain 30,797,221 123,652,947 52,614,588
------------ ------------ ------------
Net change in unrealized appreciation (depreciation) on:
Investments 39,085,905 125,933,034 (12,574,773)
Foreign currency translations -- -- --
Futures contracts -- -- --
Foreign capital gains tax -- -- --
------------ ------------ ------------
Net change in unrealized appreciation (depreciation) 39,085,905 125,933,034 (12,574,773)
------------ ------------ ------------
Net Gain 69,883,126 249,585,981 40,039,815
------------ ------------ ------------
Net Increase Resulting from Operations 72,690,968 246,485,379 37,149,745
See Accompanying Notes to Financial Statements. | 67
STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________
COLUMBIA EQUITY FUNDS
COLUMBIA ASSET ALLOCATION FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 6,891,677 6,588,100
Net realized gain on investments, foreign currency transactions,
futures contracts and foreign capital gains tax 38,292,946 29,766,534
Net change in unrealized appreciation (depreciation) on investments,
foreign currency translations, futures contracts and foreign capital
gains tax (1,172,839) 6,931,847
-------------- --------------
Net increase resulting from operations 44,011,784 43,286,481
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (60,529) (38,123)
Class B (57,776) (39,489)
Class C (5,763) (3,850)
Class G (294,862) (532,662)
Class T (2,998,187) (3,361,232)
Class Z (3,406,583) (4,367,911)
-------------- --------------
Total distributions to shareholders (6,823,700) (8,343,267)
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (74,283,896) (79,551,611)
Net increase (decrease) in net assets (37,095,812) (44,608,397)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 423,227,422 467,835,819
End of period 386,131,610 423,227,422
-------------- --------------
Undistributed (overdistributed) net investment income at end of period (93,970) (577,690)
Accumulated net investment loss at end of period -- --
COLUMBIA LARGE CAP GROWTH FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 5,792,978 (2,858,299)
Net realized gain on investments, foreign currency transactions,
futures contracts and foreign capital gains tax 150,841,082 35,926,964
Net change in unrealized appreciation (depreciation) on investments,
foreign currency translations, futures contracts and foreign capital
gains tax 2,914,418 24,493,437
-------------- --------------
Net increase resulting from operations 159,548,478 57,562,102
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (4,773) --
Class B -- --
Class C -- --
Class G -- --
Class T (218,026) --
Class Z (1,100,339) (344,225)
-------------- --------------
Total distributions to shareholders (1,323,138) (344,225)
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS 460,512,265 (113,980,519)
Net increase (decrease) in net assets 618,737,605 (56,762,642)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 908,008,882 964,771,524
End of period 1,526,746,487 908,008,882
-------------- --------------
Undistributed (overdistributed) net investment income at end of period 4,367,800 --
Accumulated net investment loss at end of period -- (31,890)
COLUMBIA DISCIPLINED VALUE FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 6,168,889 6,193,345
Net realized gain on investments, foreign currency transactions,
futures contracts and foreign capital gains tax 37,360,323 56,049,664
Net change in unrealized appreciation (depreciation) on investments,
foreign currency translations, futures contracts and foreign capital
gains tax 22,679,978 2,235,576
-------------- --------------
Net increase resulting from operations 66,209,190 64,478,585
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (39,394) (34,019)
Class B (13,386) (10,336)
Class C (1,604) (1,620)
Class G (33,655) (60,722)
Class T (1,511,678) (2,222,608)
Class Z (4,027,029) (5,958,609)
-------------- --------------
Total distributions to shareholders (5,626,746) (8,287,914)
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (58,819,727) 8,578,064
Net increase (decrease) in net assets 1,762,717 64,768,735
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 429,237,538 364,468,803
End of period 431,000,255 429,237,538
-------------- --------------
Undistributed (overdistributed) net investment income at end of period 319,610 (13,047)
Accumulated net investment loss at end of period -- --
See Accompanying Notes to Financial Statements.
68-69 Spread
STATEMENTS OF CHANGES IN NET ASSETS ____________________________________________
COLUMBIA EQUITY FUNDS
COLUMBIA COMMON STOCK FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) 2,807,842 137,755
Net realized gain on investments 30,797,221 31,566,846
Net change in unrealized appreciation (depreciation) on investments 39,085,905 (1,396,341)
-------------- --------------
Net increase resulting from operations 72,690,968 30,308,260
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A (48,639) (3,718)
Class B (12,827) --
Class C (1,388) --
Class G (58,216) --
Class T (943,447) (53,896)
Class Z (1,028,430) (307,876)
From net realized gains:
Class A (258,532) --
Class B (104,749) --
Class C (11,323) --
Class G (458,781) --
Class T (5,128,778) --
Class Z (4,890,150) --
-------------- --------------
Total distributions to shareholders (12,945,260) (365,490)
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS 73,987,511 (60,613,547)
Net increase (decrease) in net assets 133,733,219 (30,670,777)
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 383,927,118 414,597,895
End of period 517,660,337 383,927,118
-------------- --------------
Undistributed (overdistributed) net investment income at end of period 651,326 (16,638)
Accumulated net investment loss at end of period -- --
COLUMBIA SMALL CAP CORE FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) (3,100,602) (3,982,558)
Net realized gain on investments 123,652,947 101,709,890
Net change in unrealized appreciation (depreciation) on investments 125,933,034 100,021,971
-------------- --------------
Net increase resulting from operations 246,485,379 197,749,303
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A -- --
Class B -- --
Class C -- --
Class G -- --
Class T -- --
Class Z --
From net realized gains:
Class A (12,731,838) (2,842,592)
Class B (2,238,027) (388,822)
Class C (3,566,257) (673,375)
Class G (614,205) (236,658)
Class T (8,769,533) (3,762,956)
Class Z (68,581,877) (26,575,680)
-------------- --------------
Total distributions to shareholders (96,501,737) (34,480,083)
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (197,861,353) 396,376,350
Net increase (decrease) in net assets (47,877,711) 559,645,570
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 1,575,373,707 1,015,728,137
End of period 1,527,495,996 1,575,373,707
-------------- --------------
Undistributed (overdistributed) net investment income at end of period -- --
Accumulated net investment loss at end of period (21,979) (12,009)
COLUMBIA SMALL COMPANY EQUITY FUND
-----------------------------------------------
YEAR ENDED YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS SEPTEMBER 30, 2005 ($) SEPTEMBER 30, 2004 ($)
- -----------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income (loss) (2,890,070) (3,957,642)
Net realized gain on investments 52,614,588 63,906,432
Net change in unrealized appreciation (depreciation) on investments (12,574,773) (10,180,101)
-------------- --------------
Net increase resulting from operations 37,149,745 49,768,689
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Class A -- --
Class B -- --
Class C -- --
Class G -- --
Class T -- --
Class Z --
From net realized gains:
Class A -- --
Class B -- --
Class C -- --
Class G -- --
Class T -- --
Class Z -- --
-------------- --------------
Total distributions to shareholders -- --
- -----------------------------------------------------------------------------------------------------------------------------
NET CAPITAL SHARE TRANSACTIONS (184,983,212) (37,019,466)
Net increase (decrease) in net assets (147,833,467) 12,749,223
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 380,426,736 367,677,513
End of period 232,593,269 380,426,736
-------------- --------------
Undistributed (overdistributed) net investment income at end of period -- --
Accumulated net investment loss at end of period (15,054) (11,506)
See Accompanying Notes to Financial Statements.
70-71 Spread
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY _________________________________________________________
COLUMBIA EQUITY FUNDS
COLUMBIA ASSET ALLOCATION FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 130,504 2,085,407 156,246 2,338,730
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 3,548 56,759 2,480 37,011
Redemptions (71,163) (1,138,127) (52,637) (794,225)
------------ ------------ ------------ ------------
Net increase 62,889 1,004,039 106,089 1,581,516
CLASS B
Subscriptions 174,907 2,788,321 187,791 2,806,475
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 3,197 51,095 2,375 35,373
Redemptions (70,052) (1,121,692) (44,405) (665,807)
------------ ------------ ------------ ------------
Net increase 108,052 1,717,724 145,761 2,176,041
CLASS C
Subscriptions 19,854 317,542 26,605 398,392
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 305 4,878 225 3,354
Redemptions (11,503) (184,894) (6,084) (90,769)
------------ ------------ ------------ ------------
Net increase 8,656 137,526 20,746 310,977
CLASS G
Subscriptions 28,778 455,566 46,210 691,443
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 18,128 289,212 35,018 520,503
Redemptions (1,361,012) (21,660,524) (1,460,481) (21,741,477)
------------ ------------ ------------ ------------
Net decrease (1,314,106) (20,915,746) (1,379,253) (20,529,531)
CLASS T
Subscriptions 1,120,997 17,883,389 1,030,515 15,369,640
Distributions reinvested 180,816 2,892,160 218,543 3,254,741
Redemptions (2,263,695) (36,112,600) (2,605,902) (39,012,056)
------------ ------------ ------------ ------------
Net decrease (961,882) (15,337,051) (1,356,844) (20,387,675)
CLASS Z
Subscriptions 540,254 8,601,545 885,247 13,242,156
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 176,136 2,815,074 240,806 3,584,314
Redemptions (3,284,919) (52,307,007) (3,966,326) (59,529,409)
------------ ------------ ------------ ------------
Net increase (decrease) (2,568,529) (40,890,388) (2,840,273) (42,702,939)
COLUMBIA LARGE CAP GROWTH FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 162,826 3,286,461 185,141 3,529,297
Proceeds received in connection with merger 237,271 4,724,720 -- --
Distributions reinvested 228 4,637 -- --
Redemptions (114,957) (2,328,346) (84,167) (1,611,464)
------------ ------------ ------------ ------------
Net increase 285,368 5,687,472 100,974 1,917,833
CLASS B
Subscriptions 154,916 2,984,821 173,093 3,184,607
Proceeds received in connection with merger 117,001 2,223,353 -- --
Distributions reinvested -- -- -- --
Redemptions (63,160) (1,222,902) (52,933) (968,494)
------------ ------------ ------------ ------------
Net increase 208,757 3,985,272 120,160 2,216,113
CLASS C
Subscriptions 24,777 480,986 33,259 603,292
Proceeds received in connection with merger 16,591 315,731 -- --
Distributions reinvested -- -- -- --
Redemptions (14,610) (288,945) (20,280) (369,823)
------------ ------------ ------------ ------------
Net increase 26,758 507,772 12,979 233,469
CLASS G
Subscriptions 69,440 1,287,163 100,874 1,790,776
Proceeds received in connection with merger 701,867 12,922,807 -- --
Distributions reinvested -- -- -- --
Redemptions (1,084,192) (20,252,191) (748,063) (13,235,279)
------------ ------------ ------------ ------------
Net decrease (312,885) (6,042,221) (647,189) (11,444,503)
CLASS T
Subscriptions 750,265 15,040,440 593,336 11,219,286
Distributions reinvested 10,490 212,533 -- --
Redemptions (2,236,284) (44,688,960) (2,197,901) (41,619,482)
------------ ------------ ------------ ------------
Net decrease (1,475,529) (29,435,987) (1,604,565) (30,400,196)
CLASS Z
Subscriptions 4,869,526 99,446,257 5,402,218 104,135,991
Proceeds received in connection with merger 33,471,430 677,813,755 -- --
Distributions reinvested 26,715 553,278 9,645 181,333
Redemptions (14,201,392) (292,003,333) (9,359,449) (180,820,559)
------------ ------------ ------------ ------------
Net increase (decrease) 24,166,279 485,809,957 (3,947,586) (76,503,235)
See Accompanying Notes to Financial Statements.
72-73 Spread
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY _________________________________________________________
COLUMBIA EQUITY FUNDS
COLUMBIA DISCIPLINED VALUE FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 126,900 1,751,310 136,953 1,686,613
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 2,723 37,625 2,599 32,080
Redemptions (34,738) (479,047) (23,995) (300,932)
------------ ------------ ------------ ------------
Net increase (decrease) 94,885 1,309,888 115,557 1,417,761
CLASS B
Subscriptions 131,730 1,715,092 179,802 2,124,921
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 927 12,088 761 9,119
Redemptions (42,877) (565,044) (17,928) (213,057)
------------ ------------ ------------ ------------
Net increase 89,780 1,162,136 162,635 1,920,983
CLASS C
Subscriptions 22,152 294,858 40,005 458,582
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 76 993 72 858
Redemptions (13,726) (184,724) (18,365) (206,697)
------------ ------------ ------------ ------------
Net increase 8,502 111,127 21,712 252,743
CLASS G
Subscriptions 9,707 126,540 17,943 210,409
Distributions reinvested 2,555 33,269 5,027 60,020
Redemptions (319,087) (4,205,829) (461,561) (5,407,849)
------------ ------------ ------------ ------------
Net decrease (306,825) (4,046,020) (438,591) (5,137,420)
CLASS T
Subscriptions 353,301 4,868,563 474,406 5,826,432
Distributions reinvested 107,641 1,481,494 176,846 2,178,280
Redemptions (1,695,699) (23,345,089) (1,818,952) (22,446,540)
------------ ------------ ------------ ------------
Net decrease (1,234,757) (16,995,032) (1,167,700) (14,441,828)
CLASS Z
Subscriptions 2,521,590 34,976,439 5,864,057 73,282,626
Proceeds received in connection with merger -- -- -- --
Distributions reinvested 91,647 1,285,642 165,325 2,065,049
Redemptions (5,462,971) (76,623,907) (4,080,140) (50,781,850)
------------ ------------ ------------ ------------
Net increase (decrease) (2,849,734) (40,361,826) 1,949,242 24,565,825
COLUMBIA COMMON STOCK FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 108,558 1,388,221 223,985 2,723,272
Proceeds received in connection with merger 62,244 778,064 -- --
Distributions reinvested 23,431 291,720 298 3,571
Redemptions (204,142) (2,570,318) (124,083) (1,510,141)
------------ ------------ ------------ ------------
Net increase (decrease) (9,909) (112,313) 100,200 1,216,702
CLASS B
Subscriptions 115,833 1,427,209 191,409 2,257,015
Proceeds received in connection with merger 170,610 2,067,274 -- --
Distributions reinvested 9,018 109,121 -- --
Redemptions (83,734) (1,032,390) (57,832) (683,878)
------------ ------------ ------------ ------------
Net increase 211,727 2,571,214 133,577 1,573,137
CLASS C
Subscriptions 12,851 159,428 44,391 521,233
Proceeds received in connection with merger 13,831 167,732 -- --
Distributions reinvested 1,020 12,348 -- --
Redemptions (11,138) (136,885) (35,218) (416,189)
------------ ------------ ------------ ------------
Net increase 16,564 202,623 9,173 105,044
CLASS G
Subscriptions 18,719 225,260 30,324 358,212
Distributions reinvested 42,570 509,989 -- --
Redemptions (771,770) (9,379,766) (1,265,623) (14,874,554)
------------ ------------ ------------ ------------
Net decrease (710,481) (8,644,517) (1,235,299) (14,516,342)
CLASS T
Subscriptions 656,808 8,281,746 1,137,554 13,775,855
Distributions reinvested 454,301 5,628,793 4,431 52,863
Redemptions (2,770,705) (34,867,921) (2,774,051) (33,648,875)
------------ ------------ ------------ ------------
Net decrease (1,659,596) (20,957,382) (1,632,066) (19,820,157)
CLASS Z
Subscriptions 1,462,638 18,470,958 2,978,947 36,327,362
Proceeds received in connection with merger 16,749,769 210,158,531 -- --
Distributions reinvested 276,781 3,459,761 7,263 87,150
Redemptions (10,293,029) (131,161,364) (5,362,164) (65,586,443)
------------ ------------ ------------ ------------
Net increase (decrease) 8,196,159 100,927,886 (2,375,954) (29,171,931)
See Accompanying Notes to Financial Statements.
74-75 Spread
STATEMENTS OF CHANGES IN NET ASSETS -
CAPITAL STOCK ACTIVITY _________________________________________________________
COLUMBIA EQUITY FUNDS
COLUMBIA SMALL CAP CORE FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 1,740,783 32,340,329 9,975,214 170,177,084
Distributions reinvested 681,437 12,306,744 166,652 2,743,101
Redemptions (3,533,610) (64,908,038) (1,839,971) (31,780,743)
------------ ------------ ------------ ------------
Net increase (decrease) (1,111,390) (20,260,965) 8,301,895 141,139,442
CLASS B
Subscriptions 70,629 1,241,220 1,835,057 30,371,535
Distributions reinvested 118,979 2,074,993 22,302 355,492
Redemptions (280,456) (4,959,941) (233,273) (3,860,617)
------------ ------------ ------------ ------------
Net increase (decrease) (90,848) (1,643,728) 1,624,086 26,866,410
CLASS C
Subscriptions 149,269 2,631,776 3,168,245 52,152,651
Distributions reinvested 179,879 3,140,708 37,782 603,008
Redemptions (1,131,002) (20,065,584) (237,693) (3,942,134)
------------ ------------ ------------ ------------
Net increase (decrease) (801,854) (14,293,100) 2,968,334 48,813,525
CLASS G
Subscriptions 8,559 150,672 15,992 262,179
Distributions reinvested 34,295 592,962 14,620 230,995
Redemptions (209,511) (3,673,042) (84,274) (1,387,033)
------------ ------------ ------------ ------------
Net decrease (166,657) (2,929,408) (53,662) (893,859)
CLASS T
Subscriptions 595,469 10,820,249 1,032,837 17,432,562
Distributions reinvested 439,303 7,867,925 221,143 3,611,276
Redemptions (1,636,535) (29,690,023) (1,687,801) (28,719,170)
------------ ------------ ------------ ------------
Net decrease (601,763) (11,001,849) (433,821) (7,675,332)
CLASS Z
Subscriptions 8,733,661 161,432,242 23,044,663 396,797,303
Distributions reinvested 2,299,186 41,891,167 1,091,817 18,124,145
Redemptions (18,999,553) (351,055,712) (13,111,013) (226,795,284)
------------ ------------ ------------ ------------
Net increase (decrease) (7,966,706) (147,732,303) 11,025,467 188,126,164
COLUMBIA SMALL COMPANY EQUITY FUND
------------------------------------------------------------
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 2005 SEPTEMBER 30, 2004
---------------------------- ----------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
- -----------------------------------------------------------------------------------------------------------------
CLASS A
Subscriptions 102,573 1,750,364 296,504 4,933,872
Distributions reinvested -- -- -- --
Redemptions (98,902) (1,685,570) (36,147) (662,030)
------------ ------------ ------------ ------------
Net increase (decrease) 3,671 64,794 260,357 4,271,842
CLASS B
Subscriptions 50,158 804,186 131,387 2,053,177
Distributions reinvested -- -- -- --
Redemptions (30,235) (488,378) (24,027) (359,925)
------------ ------------ ------------ ------------
Net increase (decrease) 19,923 315,808 107,360 1,693,252
CLASS C
Subscriptions 20,773 335,210 69,159 1,059,859
Distributions reinvested -- -- -- --
Redemptions (22,904) (369,462) (7,231) (109,723)
------------ ------------ ------------ ------------
Net increase (decrease) (2,131) (34,252) 61,928 950,136
CLASS G
Subscriptions 4,124 65,348 7,992 121,923
Distributions reinvested -- -- -- --
Redemptions (92,469) (1,454,609) (203,048) (3,089,126)
------------ ------------ ------------ ------------
Net decrease (88,345) (1,389,261) (195,056) (2,967,203)
CLASS T
Subscriptions 105,752 1,793,306 219,277 3,570,127
Distributions reinvested -- -- -- --
Redemptions (678,837) (11,638,661) (666,822) (10,915,948)
------------ ------------ ------------ ------------
Net decrease (573,085) (9,845,355) (447,545) (7,345,821)
CLASS Z
Subscriptions 1,982,620 36,092,250 4,555,081 78,677,281
Distributions reinvested -- -- -- --
Redemptions (11,850,416) (210,187,196) (6,507,999) (112,298,953)
------------ ------------ ------------ ------------
Net increase (decrease) (9,867,796) (174,094,946) (1,952,918) (33,621,672)
See Accompanying Notes to Financial Statements.
76-77 Spread
NOTES TO FINANCIAL STATEMENTS __________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
NOTE 1. ORGANIZATION
The Columbia Fund Trust XI (the "Trust") is a Massachusetts business trust
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company. Information presented in these financial
statements pertains to the following diversified portfolios (individually
referred to as a "Fund", collectively referred to as the "Funds"):
Columbia Asset Allocation Fund
Columbia Large Cap Growth Fund
Columbia Disciplined Value Fund
Columbia Common Stock Fund
Columbia Small Cap Core Fund
Columbia Small Company Equity Fund
Effective September 23, 2005, the Columbia Large Cap Core Fund changed its name
to the Columbia Common Stock Fund. Effective October 7, 2005, the Columbia Small
Cap Fund changed its name to the Columbia Small Cap Core Fund.
INVESTMENT GOALS
The Columbia Asset Allocation Fund seeks a high total return by providing both a
current level of income greater than that provided by popular stock market
averages, as well as long-term growth in the value of the Fund's assets.
Columbia Large Cap Growth Fund and Columbia Small Cap Core Fund seek long term
capital appreciation. Columbia Disciplined Value Fund seeks long term capital
appreciation, with income as a secondary goal. Columbia Common Stock Fund seeks
to provide a relatively high total return through long-term capital appreciation
and current income. Columbia Small Company Equity Fund seeks capital
appreciation.
FUND SHARES
The Funds may issue an unlimited number of shares. Each Fund offers six classes
of shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share
class has its own sales charge and expense structure. The Columbia Small Cap
Core Fund is closed to new investors and new accounts.
Class A and Class T shares are subject to a front-end sales charge of based on
the amount of initial investment. Class A and Class T shares purchased without
an initial sales charge in accounts aggregating up to $50 million at the time of
purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within twelve months of the time of purchase. Class B and Class G
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 G shares will convert to Class T shares in eight years after
purchase. 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 each 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 Funds in the preparation of their financial statements.
SECURITY VALUATION
Equity securities and securities of certain investment companies are valued at
the last sale price on the principal exchange on which they trade, except for
securities traded on the NASDAQ, which are valued at the NASDAQ official close
price. Unlisted securities or listed securities for which there were no sales
during the day are valued at the closing bid price on such exchanges or
over-the-counter markets.
Debt securities generally are valued by pricing services approved by the Funds'
Board of Trustees, based upon market transactions for normal, institutional-size
trading units of similar securities. The services may use various pricing
techniques which take into account appropriate factors such as yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other data, as
well as broker quotes. Debt securities for which quotations are readily
available are valued at an over-the-counter or exchange bid quotation. Certain
debt securities, which tend to be more thinly traded and of lesser quality, are
priced based on fundamental analysis of the financial condition of the issuer
and the estimated value of any collateral. Valuations developed through pricing
techniques may vary from the actual amounts realized upon sale of the
securities, and the potential variation may be greater for those securities
valued using fundamental analysis.
78
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Funds'
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 2:00 p.m. Eastern (U.S.) time. Events affecting the
values of such foreign securities and such exchange rates may occur between the
times at which they are determined and the close of the customary trading
session of the NYSE, which would not be reflected in the computation of the
Funds' net asset value. If events materially affecting the values of such
foreign securities occur and it is determined that market quotations are not
reliable, then these foreign securities will be valued at their fair value using
procedures approved by the Board of Trustees. The Funds may use a systematic
fair valuation model provided by an independent third party to value securities
principally traded in foreign markets in order to adjust for possible stale
pricing that may occur between the close of the foreign exchanges and the time
for valuation. 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.
Investments for which market quotations are not readily available, or that have
quotations which management believes are not appropriate, are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
REPURCHASE AGREEMENTS
Each Fund may engage in repurchase agreement transactions with institutions that
the Funds' investment advisor has determined are creditworthy. Each 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 each 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 Funds seek to assert their rights.
MORTGAGE DOLLAR ROLL TRANSACTIONS
Certain Funds may enter into mortgage dollar roll transactions. A mortgage
dollar roll transaction involves a sale by a Fund of investments from its
portfolio with an agreement by the Fund to repurchase similar, but not
identical, securities at an agreed upon price and date. During the period
between the sale and repurchase, the Fund will not be entitled to accrue
interest and receive principal payment on the securities sold. Mortgage dollar
roll transactions involve the risk that the market value of the securities sold
by the Fund may decline below the repurchase price of those securities. In the
event the buyer of the securities under a mortgage dollar roll transaction files
for bankruptcy or becomes insolvent, the Fund's use of proceeds of the
transaction may be restricted pending a determination by or with respect to the
other party. The Funds identify U.S. Government securities or other liquid high
grade debt obligations in an amount equal to the mortgage dollar roll
transactions.
DELAYED DELIVERY SECURITIES
Certain Funds may trade securities on other than normal settlement terms,
including securities purchased or sold on a "when-issued" basis. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Fund to subsequently invest at less advantageous prices. The Fund
identifies cash or liquid portfolio securities as segregated with the custodian
in an amount equal to the delayed delivery commitment.
FUTURES CONTRACTS
Certain Funds may invest in municipal, index and U.S. Treasury futures
contracts. The Funds will invest in these instruments to hedge against the
effects of changes in the value of portfolio securities due to anticipated
changes in interest rates and/or market conditions, for duration management, or
when the transactions are economically appropriate to the
79
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
reduction of risk inherent in the management of the Funds and not for trading
purposes. The use of futures contracts involves certain risks, which include:
(1) imperfect correlation between the price movement of the instruments and the
underlying securities, (2) inability to close out positions due to differing
trading hours, or the temporary absence of a liquid market, for either the
instrument or the underlying securities, or (3) an inaccurate prediction by
Columbia Management Advisors, Inc. of the future direction of interest rates.
Any of these risks may involve amounts exceeding the variation margin recorded
in the Funds' Statement of Assets and Liabilities at any given time.
Upon entering into a futures contract, each Fund deposits cash or securities
with the broker in an amount sufficient to meet the initial margin requirement.
Subsequent payments are made or received by the Funds equal to the daily change
in the contract value and are recorded as variation margin receivable or payable
and offset in unrealized gains or losses. Each Fund also identifies portfolio
securities as segregated with the custodian in a separate account in an amount
equal to the futures contract. The Funds recognize a realized gain or loss when
the contract is closed or expires.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities. Corporate actions
and dividend income are recorded on the ex-date, except for certain foreign
securities which are recorded as soon after ex-date as the Funds become aware of
such, net of non-reclaimable tax withholdings. Awards from class action
litigation are recorded as a reduction of cost if the Funds still own the
applicable securities on the payment date. If the Funds no longer own the
applicable securities, the proceeds are recorded as realized gains.
The Funds estimate components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Funds no longer own the
applicable securities, any distributions received in excess of income are
recorded as realized gains.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Funds do not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses) on
investments.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statements of Operations) and realized and unrealized gains (losses), are
allocated to each class of a 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
Each 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, each 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 each Fund should not
be subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
FOREIGN CAPITAL GAINS TAXES
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 15%. The Funds accrue for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared and paid quarterly for
Columbia Asset Allocation Fund, Columbia Disciplined Value Fund and Columbia
Common Stock Fund. Dividends from net investment income are declared and paid
annually for Columbia Large Cap Growth Fund, Columbia Small Cap Core Fund and
Columbia Small Company Equity Fund. Net realized capital gains, if any, are
distributed at least annually for all Funds.
80
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
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 a 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 September 30, 2005, permanent book and tax basis differences
resulting primarily from differing treatments for amortization/accretion
adjustments, foreign currency transactions, redemption based payments treated as
dividends received deduction, foreign capital gains tax, paydown
reclassifications, net operating loss reclassifications, REIT adjustments,
market discount reclassifications, permanently lost capital loss carryforward
and distribution reclassifications were identified and reclassified among the
components of the Funds' net assets as follows:
UNDISTRIBUTED
(OVERDISTRIBUTED) OR
(ACCUMULATED) ACCUMULATED
NET INVESTMENT NET REALIZED PAID-IN
INCOME (LOSS) GAIN (LOSS) CAPITAL
-----------------------------------------------------
Columbia Asset Allocation Fund ..... $ 415,743 $ (2,500,949) $ 2,085,206
Columbia Large Cap Growth Fund ..... (70,150) (240,048,164) 240,118,314
Columbia Disciplined Value Fund .... (209,486) 209,486 --
Columbia Common Stock Fund ......... (46,931) (38,276,442) 38,323,373
Columbia Small Cap Core Fund ....... 3,090,632 (14,201,369) 11,110,737
Columbia Small Company Equity Fund . 2,886,522 -- (2,886,522)
Net investment income and net realized gains (losses), as disclosed on the
Statements of Operations, and net assets were not affected by these
reclassifications.
The tax character of distributions paid during the years ended September 30,
2005 and September 30, 2004 was as follows:
SEPTEMBER 30, 2005
ORDINARY LONG-TERM
INCOME* CAPITAL GAINS
----------------------------
Columbia Asset Allocation Fund ................ $ 6,823,700 $ --
Columbia Large Cap Growth Fund ................ 1,323,138 --
Columbia Disciplined Value Fund ............... 5,626,746 --
Columbia Common Stock Fund .................... 2,102,205 10,843,055
Columbia Small Cap Core Fund .................. 26,654,040 69,847,697
SEPTEMBER 30, 2004
ORDINARY LONG-TERM
INCOME* CAPITAL GAINS
----------------------------
Columbia Asset Allocation Fund ................ $ 8,343,267 $ --
Columbia Large Cap Growth Fund ................ 344,225 --
Columbia Disciplined Value Fund ............... 8,287,914 --
Columbia Common Stock Fund .................... 347,473 18,017
Columbia Small Cap Core Fund .................. 9,268,588 25,211,495
* For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
81
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
As of September 30, 2005, the components of distributable earnings on a tax
basis were as follows:
UNDISTRIBUTED UNDISTRIBUTED NET
ORDINARY LONG-TERM UNREALIZED
INCOME CAPITAL GAINS APPRECIATION*
-------------------------------------------
Columbia Asset Allocation Fund ... $ 1,389,685 $ 25,645,823 $ 36,402,552
Columbia Large Cap Growth Fund ... 4,410,515 -- 194,101,105
Columbia Disciplined Value Fund .. 7,022,907 20,745,146 46,800,312
Columbia Common Stock Fund ....... 14,174,311 10,012,054 77,105,363
Columbia Small Cap Core Fund ..... 16,177,402 88,268,449 297,493,855
Columbia Small Company Equity Fund -- 15,404,488 24,905,958
* The differences between book-basis and tax-basis net unrealized
appreciation are primarily due to deferral of losses from wash sales.
Unrealized appreciation and depreciation at September 30, 2005, based on cost of
investments for federal income tax purposes, excluding any unrealized
appreciation and depreciation from changes in the value of other assets and
liabilities resulting from changes in exchange rates, was:
NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
-------------------------------------------
Columbia Asset Allocation Fund ... $ 42,142,393 $ (5,739,841) $ 36,402,552
Columbia Large Cap Growth Fund ... 217,320,881 (23,219,776) 194,101,105
Columbia Disciplined Value Fund .. 59,948,914 (13,148,602) 46,800,312
Columbia Common Stock Fund ....... 85,962,050 (8,856,687) 77,105,363
Columbia Small Cap Core Fund ..... 410,635,326 (113,141,471) 297,493,855
Columbia Small Company Equity Fund 31,676,305 (6,770,347) 24,905,958
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:
COLUMBIA COLUMBIA
LARGE CAP COMMON
GROWTH STOCK
YEAR OF EXPIRATION FUND FUND
- --------------------------------------------------------------------------------
2006 ............................................. $ 5,036,657 $ --
2007 ............................................. 5,036,657 --
2009 ............................................. 137,035,449 11,843,809
2010 ............................................. 53,908,485 18,452,682
2011 ............................................. 22,217,091 --
------------- -------------
Total ............................................ $ 223,234,339 $ 30,296,491
------------- -------------
The following capital loss carryforwards were utilized during the year ended
September 30, 2005:
Columbia Asset Allocation Fund................................... $ 7,043,928
Columbia Large Cap Growth Fund................................... 139,819,082
Columbia Disciplined Value Fund.................................. 10,720,416
Columbia Common Stock Fund....................................... 7,834,662
Columbia Small Company Equity Fund............................... 36,913,639
Of the capital loss carryforwards attributable to Columbia Large Cap Growth
Fund, $176,932,413 ($5,036,657 expiring September 30, 2006, $5,036,657 expiring
September 30, 2007, $137,035,449 expiring September 30, 2009 and $29,823,650
expiring September 30, 2010) remain from the Columbia Large Cap Growth Fund
merger with the Columbia Growth Fund (See Note 10). Total capital loss
carryforwards acquired in the current year from the Columbia Growth Fund were
$252,093,928 of which $18,845,258 were permanently lost and $56,316,257 were
utilized to offset current year gains. The availability of a portion of the
remaining capital loss carryforwards from the Columbia Large Cap Growth Fund may
be limited in a given year.
82
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
All of the Columbia Common Stock Fund's capital loss carryforwards were acquired
in the merger of Columbia Large Cap Core Fund with Columbia Common Stock Fund
(the "target fund") (See Note 10). Total capital loss carryforwards acquired in
the current year from the target fund were $38,131,153 of which $7,834,662 were
utilized to offset current year gains. The availability of a portion of the
remaining capital loss carryforwards may be limited in a given year.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, LLC ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Funds. On September 30, 2005, Columbia Management Advisors, Inc. changed its
name to Columbia Management Advisors, LLC. Columbia receives a monthly
investment advisory fee based on each Fund's average daily net assets at the
following annual rates:
$200 MILLION $500 MILLION $1 BILLION $1.5 BILLION $2 BILLION $3 BILLION
FIRST TO $500 TO TO TO TO TO OVER
$200 MILLION MILLION $1 BILLION $1.5 BILLION $2 BILLION $3 BILLION $6 BILLION $6 BILLION
------------ ------------ ------------ ------------ ------------ ---------- ---------- ----------
Columbia Asset
Allocation Fund....... 0.650% 0.650% 0.600% 0.550% 0.500% 0.500% 0.480% 0.460%
Columbia Large Cap
Growth Fund........... 0.700% 0.575% 0.450% 0.450% 0.450% 0.450% 0.450% 0.450%
Columbia Disciplined
Value Fund............ 0.700% 0.700% 0.650% 0.600% 0.550% 0.550% 0.530% 0.510%
Columbia Common
Stock Fund............ 0.700% 0.700% 0.650% 0.600% 0.550% 0.550% 0.530% 0.510%
Columbia Small Cap
Core Fund............. 0.750% 0.750% 0.700% 0.650% 0.600% 0.550% 0.550% 0.550%
Columbia Small Company
Equity Fund........... 0.750% 0.750% 0.700% 0.650% 0.650% 0.650% 0.650% 0.650%
For the period November 1, 2004 through March 18, 2005, Columbia received a
monthly investment advisory fee from the Columbia Large Cap Growth Fund based on
the Fund's average daily net assets of at the following annual rates:
AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
------------------------------------------------------
First $500 million 0.700%
$500 million to $1 billion 0.650%
$1 billion to $1.5 billion 0.600%
$1.5 billion to $3 billion 0.550%
$3 billion to $6 billion 0.530%
Over $6 billion 0.510%
Prior to November 1, 2004, Columbia received a monthly investment advisory fee
based on each Fund's average daily net assets at the following annual rates:
$500 MILLION $1 BILLION $1.5 BILLION
FIRST TO TO TO OVER
$500 MILLION $1 BILLION $1.5 BILLION $2 BILLION $2 BILLION
------------ ------------ ------------ ------------ -----------
Columbia Asset Allocation Fund........... 0.750% 0.700% 0.650% 0.600% 0.550%
Columbia Large Cap Growth Fund........... 0.750% 0.700% 0.650% 0.600% 0.550%
Columbia Disciplined Value Fund.......... 0.750% 0.700% 0.650% 0.600% 0.550%
Columbia Common Stock Fund............... 0.750% 0.700% 0.650% 0.600% 0.550%
Columbia Small Cap Core Fund............. 0.750% 0.700% 0.650% 0.600% 0.550%
Columbia Small Company Equity Fund....... 0.750% 0.700% 0.650% 0.650% 0.650%
83
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
For the year ended September 30, 2005, the effective investment advisory fee
rates for the Funds were as follows:
Columbia Asset Allocation Fund....... 0.66%
Columbia Large Cap Growth Fund....... 0.57%
Columbia Disciplined Value Fund...... 0.70%
Columbia Common Stock Fund........... 0.70%
Columbia Small Cap Core Fund......... 0.69%
Columbia Small Company Equity Fund... 0.75%
ADMINISTRATION FEE
Columbia provides administrative and other services to each Fund, except
Columbia Large Cap Growth Fund, for a monthly administration fee at the annual
rate of 0.067% of each Fund's average daily net assets.
Columbia provides administrative and other services to Columbia Large Cap Growth
Fund for a monthly administration fee at the annual rate of 0.05% of the Fund's
average daily net assets. Prior to March 19, 2005, Columbia received a monthly
administration fee at the annual rate of 0.067% of the Fund's average daily net
assets. For the year ended September 30, 2005, the Fund's effective
administration fee rate was 0.056%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Funds 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
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Funds, Columbia receives an
annual fee based on the average daily net assets of each Fund at the following
annual rates:
ANNUAL
FEE
AVERAGE DAILY NET ASSETS RATE
------------------------ --------
Under $50 million $ 25,000
Over $50 million but less than $200 million $ 35,000
Over $200 million but less than $500 million $ 50,000
Over $500 million but less than $1 billion $ 85,000
Over $1 billion $125,000
An additional annual fee of $10,000 is charged to each Fund due to its multiple
class structure. The Funds also pay additional fees for pricing services based
on the number of securities held by each Fund.
For the year ended September 30, 2005, the effective pricing and bookkeeping fee
rates for the Funds, inclusive of out-of-pocket expenses, were as follows:
Columbia Asset Allocation Fund................... 0.040%
Columbia Large Cap Growth Fund................... 0.009%
Columbia Disciplined Value Fund.................. 0.013%
Columbia Common Stock Fund....................... 0.016%
Columbia Small Cap Core Fund..................... 0.009%
Columbia Small Company Equity Fund............... 0.018%
TRANSFER AGENT FEE
Columbia Management 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. On
August 22, 2005, Columbia Funds Services, Inc. changed its name to Columbia
Management Services, Inc. For its services, the Transfer Agent receives a fee,
paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent
also receives reimbursement for certain out-of-pocket expenses.
For the period from October 1, 2004 through September 30, 2005, the Transfer
Agent has voluntarily agreed to waive a portion of its transfer agent fee for
the Columbia Common Stock Fund and the Columbia Small Company Equity Fund. This
arrangement will be discontinued by the Transfer Agent effective November 1,
2005. In addition, for the period from September 1, 2005 through October 31,
2005, the Transfer Agent has voluntarily agreed to waive a portion of its fees
for all Funds to reflect reduced contractual fees that will be charged to the
Funds effective November 1, 2005. For the year ended September 30, 2005, the
Transfer Agent waived fees as follows:
Columbia Asset Allocation Fund................... $ 21,634
Columbia Large Cap Growth Fund................... $ 57,245
Columbia Disciplined Value Fund.................. $ 14,456
Columbia Common Stock Fund....................... $ 40,455
Columbia Small Cap Core Fund..................... $ 9,893
Columbia Small Company Equity Fund............... $ 45,471
For the year ended September 30, 2005, the effective transfer agent fee rates
for the Funds, inclusive of out-of-pocket expenses and net of fee waivers, were
as follows:
Columbia Asset Allocation Fund................... 0.21%
Columbia Large Cap Growth Fund................... 0.18%
Columbia Disciplined Value Fund.................. 0.15%
Columbia Common Stock Fund....................... 0.21%
Columbia Small Cap Core Fund..................... 0.08%
Columbia Small Company Equity Fund............... 0.18%
84
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of
Columbia, is the principal underwriter of the Funds. On August 22, 2005,
Columbia Funds Distributor, Inc. changed its name to Columbia Management
Distributors, Inc. For the year ended September 30, 2005, the Distributor has
retained net underwriting discounts and net CDSC fees as follows:
FRONT-END SALES CHARGE CDSC
---------------------- ----------------------------------------------------
CLASS A CLASS T CLASS A CLASS B CLASS C CLASS G CLASS T
--------- ---------- -------- -------- -------- -------- --------
Columbia Asset Allocation Fund ... $ 6,025 $ 4,155 $ -- $ 11,396 $ 66 $ 64,620 $ --
Columbia Large Cap Growth Fund ... 7,452 11,354 -- 17,927 1,121 115,202 --
Columbia Disciplined Value Fund .. 5,034 4,243 -- 4,732 18 14,177 --
Columbia Common Stock Fund ....... 3,702 5,375 3,331 13,544 205 36,245 --
Columbia Small Cap Core Fund ..... 10,108 5.992 1,266 82,915 7,386 29,707 1
Columbia Small Company Equity Fund 4,209 2,233 1,302 6,730 453 8,563 --
The Funds have adopted a 12b-1 plan (the "Plan") which allows the payment of a
monthly service and distribution fee to the Distributor based on the average
daily net assets of each Fund at the following annual rates:
DISTRIBUTION FEE
-------------------------------------
CLASS A CLASS B CLASS C CLASS G
------- ------- ------- -------
Columbia Asset Allocation Fund .......... 0.10% 0.75% 0.75% 0.65%
Columbia Large Cap Growth Fund .......... 0.10% 0.75% 0.75% 0.65%
Columbia Disciplined Value Fund ......... 0.10% 0.75% 0.75% 0.65%
Columbia Common Stock Fund .............. 0.10% 0.75% 0.75% 0.65%
Columbia Small Cap Core Fund ............ 0.10% 0.75% 0.75% 0.65%
Columbia Small Company Equity Fund....... 0.10% 0.75% 0.75% 0.65%
SERVICE FEE
-------------------------------------
CLASS A CLASS B CLASS C CLASS G
------- ------- ------- -------
Columbia Asset Allocation Fund .......... 0.25% 0.25% 0.25% 0.50%
Columbia Large Cap Growth Fund .......... 0.25% 0.25% 0.25% 0.50%
Columbia Disciplined Value Fund ......... 0.25% 0.25% 0.25% 0.50%
Columbia Common Stock Fund .............. 0.25% 0.25% 0.25% 0.50%
Columbia Small Cap Core Fund ............ 0.25% 0.25% 0.25% 0.50%
Columbia Small Company Equity Fund ...... 0.25% 0.25% 0.25% 0.50%
The Funds do not intend to pay total distribution and service fees in excess of
0.25% and 0.95% annually for Class A and Class G shares of the Funds,
respectively. Of the 0.50% service fee for Class G shares, 0.25% relates to
shareholder liaison fees and 0.25% relates to administration support fees.
The CDSC and the distribution 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.
SHAREHOLDER SERVICES FEES
The Funds have adopted shareholder services plans that permit them to pay for
certain services provided to Class T and Class Z shareholders by their financial
advisors. Currently, the service plan has not been implemented with respect to
the Funds' Class Z shares. The annual service fee may equal up to 0.50% for
Class T shares. The Funds do not intend to pay more than 0.30% annually for
Class T shareholder services fees.
EXPENSE LIMITS AND FEE WAIVERS
Effective March 19, 2005, Columbia has contractually agreed to waive fees and
reimburse certain expenses to the extent that total expenses (exclusive of
distribution and service fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 0.84% and 0.89% annually of the average
daily net assets for the Columbia Large Cap Growth Fund and the Columbia Common
Stock Fund, respectively.
85
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
CUSTODY CREDITS
Each 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 Statements of Operations. The Funds could have invested a
portion of the assets utilized in connection with the expense offset arrangement
in an income-producing asset if they had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
With the exception of one officer, all officers of the Funds are employees of
Columbia or its affiliates and receive no compensation from the Funds. The Board
of Trustees appointed a Chief Compliance Officer to the Funds in accordance with
federal securities regulations. Each Fund, along with other affiliated funds,
pays its pro-rata share of the expenses associated with the Chief Compliance
Officer position. Each Fund's fee will not exceed $15,000 per year.
The Funds' 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
Funds' assets.
OTHER
Columbia provides certain services to the Funds related to Sarbanes-Oxley
compliance. These amounts are included in "Other expenses" on the Statements of
Operations. For the year ended September 30, 2005, the Funds paid fees to
Columbia for such services as follows:
Columbia Asset Allocation Fund................ $ 1,928
Columbia Large Cap Growth Fund................ 2,461
Columbia Disciplined Value Fund............... 1,950
Columbia Common Stock Fund.................... 1,887
Columbia Small Cap Core Fund.................. 3,202
Columbia Small Company Equity Fund............ 1,914
NOTE 5. PORTFOLIO INFORMATION
For the year ended September 30, 2005, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were as follows:
OTHER INVESTMENT SECURITIES
--------------------------------
PURCHASES SALES
--------------------------------
Columbia Asset Allocation Fund......... $ 277,477,845 $ 359,948,427
Columbia Large Cap Growth Fund......... 1,410,541,698 1,631,379,141
Columbia Disciplined Value Fund........ 407,735,267 465,178,227
Columbia Common Stock Fund............. 481,539,671 634,052,038
Columbia Small Cap Core Fund........... 237,161,800 467,858,669
Columbia Small Company Equity Fund..... 344,307,585 531,434,666
U.S. GOVERNMENT SECURITIES
--------------------------------
PURCHASES SALES
--------------------------------
Columbia Asset Allocation Fund......... $ 62,042,077 $ 62,670,654
86
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SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
NOTE 6. SHARES OF BENEFICIAL INTEREST
As of September 30, 2005, the following Funds had shareholders whose shares were
beneficially owned by participant accounts over which Bank of America and/or its
affiliates had either sole or joint investment discretion. Subscription and
redemption activity of these accounts may have a significant effect on the
operations of the Funds. The number of such accounts and the percentage of
shares of beneficial interest outstanding held therein are as follows:
NUMBER % OF SHARES
OF OUTSTANDING
SHAREHOLDERS HELD
-----------------------------------------------------------------
Columbia Asset
Allocation Fund................... 1 5.6%
Columbia Large Cap
Growth Fund....................... 2 39.8
Columbia Disciplined
Value Fund........................ 1 53.0
Columbia Common
Stock Fund........................ 1 23.6
Columbia Small Cap
Core Fund......................... 1 49.4
Columbia Small Company
Equity Fund....................... 1 51.1
NOTE 7. LINE OF CREDIT
The Funds 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 Statements
of Operations. For the year ended September 30, 2005, the Funds did not borrow
under this arrangement.
NOTE 8. OTHER RELATED PARTY TRANSACTIONS
During the year ended September 30, 2005, the Columbia Asset Allocation Fund,
Columbia Small Cap Core Fund and Columbia Small Company Equity Fund used Bank of
America Securities, a wholly-owned subsidiary of BOA, as a broker. Total
commissions paid to Bank of America Securities during the period were $55,
$13,690 and $12,685, respectively.
NOTE 9. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
FOREIGN SECURITIES
There are certain additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or other
foreign governmental laws or restrictions. In addition, the liquidity of foreign
securities may be more limited than that of domestic securities.
Investments in emerging market countries are subject to additional risk. The
risk of foreign investments is typically increased in less developed countries.
These countries are also more likely to experience high levels of inflation,
deflation or currency devaluation which could hurt their economies and
securities markets.
HIGH-YIELD SECURITIES
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk" bonds. Economic
downturns may disrupt the high yield market and impair the ability of issuers to
repay principal and interest. Also, an increase in interest rates would likely
have an adverse impact on the value of such obligations. Moreover, high-yield
securities may be less liquid to the extent that there is no established
secondary market.
INDUSTRY FOCUS
The Funds may focus their investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to collectively
as the
87
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
"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 Funds' 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 Funds 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 alleged 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 Funds and other affiliated funds
participated in securities class action settlements for which the funds were
eligible. Specifically, plaintiffs alleged 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. Plaintiffs
filed a notice of voluntary dismissal of the lawsuit as to all defendants and
all claims, without prejudice, which was so-ordered by the judge on or about
November 9, 2005.
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
88
________________________________________________________________________________
SEPTEMBER 30, 2005 COLUMBIA EQUITY FUNDS
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 Funds and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings (with
the exception of the January 11, 2005 "failure to participate" litigation, which
has been dismissed) are ongoing, however, based on currently available
information, Columbia believes that these lawsuits are without merit, that the
likelihood they will have a material adverse impact on any fund is remote, and
that the lawsuits are not likely to materially affect its ability to provide
investment management services to its clients, including the Funds.
For the year ended September 30, 2005, Columbia has assumed legal, consulting
services and Trustees' fees incurred by the Funds in connection with these
matters as follows:
Columbia Asset Allocation Fund................ $ 7,420
Columbia Large Cap Growth Fund................ 21,580
Columbia Disciplined Value Fund............... 7,982
Columbia Common Stock Fund.................... 8,084
Columbia Small Cap Core Fund.................. 29,179
Columbia Small Company Equity Fund............ 6,128
NOTE 10. BUSINESS COMBINATIONS AND MERGERS
As of the end of business on March 18, 2005, the Columbia Growth Fund, a series
of Columbia Fund Trust XI, merged into the Columbia Large Cap Growth Fund. The
Columbia Large Cap Growth Fund received a tax-free transfer of assets from the
Columbia Growth Fund as follows:
SHARES NET ASSETS UNREALIZED
ISSUED RECEIVED APPRECIATION 1
------------ ------------- --------------
34,544,160 $698,000,366 $75,087,939
NET ASSETS OF NET ASSETS OF
COLUMBIA COLUMBIA
NET ASSETS LARGE CAP LARGE CAP
OF COLUMBIA GROWTH FUND GROWTH FUND
GROWTH FUND IMMEDIATELY IMMEDIATELY
PRIOR TO PRIOR TO AFTER
COMBINATION COMBINATION COMBINATION
------------ ------------- --------------
$698,000,366 $902,362,481 $1,600,362,847
1 Unrealized appreciation is included in the Net Assets Received amount.
As of the end of business on March 18, 2005, the Columbia Common Stock Fund, a
series of Columbia Fund Trust XI, merged into the Columbia Large Cap Core Fund.
The Columbia Large Cap Core Fund received a tax-free transfer of assets from the
Columbia Common Stock Fund as follows:
SHARES NET ASSETS UNREALIZED
ISSUED RECEIVED APPRECIATION 1
------------ ------------- --------------
16,996,454 $213,171,601 $16,036,196
NET ASSETS OF NET ASSETS OF
NET ASSETS COLUMBIA COLUMBIA
OF COLUMBIA LARGE CAP LARGE CAP
COMMON CORE FUND CORE FUND
STOCK FUND IMMEDIATELY IMMEDIATELY
PRIOR TO PRIOR TO AFTER
COMBINATION COMBINATION COMBINATION
------------ ------------- --------------
$213,171,601 $367,205,776 $580,377,377
1 Unrealized appreciation is included in the Net Assets Received amount.
Also, on October 10, 2005, the Columbia Large Cap Core Fund was renamed as the
Columbia Common Stock Fund.
89
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, ---------------------------------
CLASS A SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.06 $ 14.01 $ 12.86 $ 14.95 $ 18.77 $ 17.73
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.27(d)(e) 0.21(d) 0.20(d) 0.26(f) 0.34(d) 0.39(d)
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts and foreign
capital gains tax 1.41 1.11 1.17 (2.12)(f) (3.06) 1.36
------- -------- ------- ------- ------- -------
Total from investment operations 1.68 1.32 1.37 (1.86) (2.72) 1.75
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.27) (0.27) (0.22) (0.23) (0.36) (0.40)
From net realized gains -- -- -- -- (0.74) (0.31)
------- -------- ------- ------- ------- -------
Total distributions declared
to shareholders (0.27) (0.27) (0.22) (0.23) (1.10) (0.71)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.47 $ 15.06 $ 14.01 $ 12.86 $ 14.95 $ 18.77
Total return (g)(h) 11.20% 9.46% 10.80%(i) (12.53)% (15.08)% 10.15%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.35% 1.43% 1.49%(k) 1.40% 1.26% 1.15%
Net investment income (j) 1.66% 1.43% 1.55%(k) 1.73%(f) 2.07% 2.15%
Waiver/reimbursement 0.01% --%(l) 0.01%(k) 0.13% 0.12% 0.15%
Portfolio turnover rate 86% 75% 122%(i) 40% 65% 59%
Net assets, end of period (000's) $ 4,206 $ 2,901 $ 1,211 $ 43 $ 60 $ 186
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime A shares
were redesignated Liberty Asset Allocation Fund, Class A shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the
year ended October 31, 2002 on the net investment income per share, net
realized and unrealized gain per share and the ratio of net investment
income to average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
90
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, ---------------------------------
CLASS B SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.06 $ 14.00 $ 12.85 $ 14.93 $ 18.75 $ 17.71
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.15(d)(e) 0.10(d) 0.12(d) 0.14(f) 0.22(d) 0.26(d)
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts and foreign
capital gains tax 1.41 1.11 1.17 (2.08)(f) (3.06) 1.35
------- -------- ------- ------- ------- -------
Total from investment operations 1.56 1.21 1.29 (1.94) (2.84) 1.61
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.15) (0.15) (0.14) (0.14) (0.24) (0.26)
From net realized gains -- -- -- -- (0.74) (0.31)
------- -------- ------- ------- ------- -------
Total distributions declared
to shareholders (0.15) (0.15) (0.14) (0.14) (0.98) (0.57)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.47 $ 15.06 $ 14.00 $ 12.85 $ 14.93 $ 18.75
Total return (g) 10.37%(h) 8.68%(h) 10.13%(h)(i) (13.06)% (15.68)%(h) 9.29%(h)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 2.10% 2.18% 2.17%(k) 2.06% 1.99% 1.89%
Net investment income (j) 0.91% 0.68% 0.95%(k) 1.07%(f) 1.34% 1.41%
Waiver/reimbursement 0.01% --%(l) 0.01%(k) -- 0.04% 0.17%
Portfolio turnover rate 86% 75% 122%(i) 40% 65% 59%
Net assets, end of period (000's) $ 7,166 $ 4,926 $ 2,539 $ 276 $ 389 $ 526
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Prime B shares
were redesignated Liberty Asset Allocation Fund, Class B shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the
year ended October 31, 2002 on the net investment income per share, net
realized and unrealized gain per share and the ratio of net investment
income to average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
91
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
----------------------- SEPTEMBER 30,
CLASS C SHARES 2005 2004 (a) 2003 (b)(c)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.06 $ 14.00 $ 13.08
- -------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.14(e) 0.10 0.10
Net realized and unrealized gain on
investments, foreign currency, futures
contracts and foreign capital gains tax 1.42 1.11 0.93
------- -------- -------
Total from investment operations 1.56 1.21 1.03
- -------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.15) (0.15) (0.11)
- -------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.47 $ 15.06 $ 14.00
Total return (f)(g) 10.37% 8.67% 7.93%(h)
- -------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 2.10% 2.19% 2.28%(j)
Net investment income (i) 0.91% 0.69% 0.85%(j)
Waiver/reimbursement 0.01% --%(k) 0.01%(j)
Portfolio turnover rate 86% 75% 122%(h)
Net assets, end of period (000's) $ 704 $ 514 $ 187
- -------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. 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) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
92
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, ------------------------------------
CLASS G SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.06 $ 14.00 $ 12.84 $ 14.92 $ 18.74 $ 17.70
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.16(d)(e) 0.11(d) 0.12(d) 0.14(f) 0.22(d) 0.24(d)
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts and foreign
capital gains tax 1.40 1.11 1.17 (2.08)(f) (3.06) 1.36
-------- -------- -------- -------- -------- --------
Total from investment operations 1.56 1.22 1.29 (1.94) (2.84) 1.60
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.16) (0.16) (0.13) (0.14) (0.24) (0.25)
From net realized gains -- -- -- -- (0.74) (0.31)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.16) (0.16) (0.13) (0.14) (0.98) (0.56)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.46 $ 15.06 $ 14.00 $ 12.84 $ 14.92 $ 18.74
Total return (g) 10.36%(h) 8.72%(h) 10.12%(h)(i) (13.08)%(h) (15.72)%(h) 9.20%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 2.05% 2.15% 2.19%(k) 2.09% 2.01% 1.99%
Net investment income (j) 0.98% 0.71% 1.02%(k) 1.04%(f) 1.33% 1.31%
Waiver/reimbursement 0.01% --%(l) 0.01%(k) 0.03% 0.01% --
Portfolio turnover rate 86% 75% 122%(i) 40% 65% 59%
Net assets, end of period (000's) $ 21,982 $ 39,892 $ 56,383 $ 73,183 $106,074 $105,980
- ---------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail B shares
were redesignated Liberty Asset Allocation Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the
year ended October 31, 2002 on the net investment income per share, net
realized and unrealized gain per share and the ratio of net investment
income to average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
93
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, ------------------------------------
CLASS T SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.07 $ 14.01 $ 12.87 $ 14.95 $ 18.79 $ 17.74
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.26(d)(e) 0.21(d) 0.21(d) 0.25(f) 0.33(d) 0.37(d)
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts and foreign
capital gains tax 1.41 1.11 1.16 (2.09)(f) (3.08) 1.36
-------- -------- -------- -------- -------- --------
Total from investment operations 1.67 1.32 1.37 (1.84) (2.75) 1.73
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.26) (0.26) (0.23) (0.24) (0.35) (0.37)
From net realized gains -- -- -- -- (0.74) (0.31)
-------- -------- -------- -------- -------- --------
Total distributions
declared to shareholders (0.26) (0.26) (0.23) (0.24) (1.09) (0.68)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.48 $ 15.07 $ 14.01 $ 12.87 $ 14.95 $ 18.79
Total return (g) 11.14%(h) 9.47%(h) 10.75%(h)(i) (12.45)%(h) (15.18)%(h) 9.98%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.40% 1.49% 1.49%(k) 1.37% 1.33% 1.29%
Net investment income (j) 1.62% 1.37% 1.73%(k) 1.76%(f) 2.01% 2.01%
Waiver/reimbursement 0.01% --%(l) 0.01%(k) 0.01% 0.01% --
Portfolio turnover rate 86% 75% 122%(i) 40% 65% 59%
Net assets, end of period (000's) $184,795 $183,438 $189,580 $198,154 $289,882 $371,590
- ---------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Retail A shares
were redesignated Liberty Asset Allocation Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the
year ended October 31, 2002 on the net investment income per share, net
realized and unrealized gain per share and the ratio of net investment
income to average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
94
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA ASSET ALLOCATION FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, ------------------------------------
CLASS Z SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.06 $ 14.01 $ 12.87 $ 14.94 $ 18.78 $ 17.73
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.31(d)(e) 0.25(d) 0.25(d) 0.29(f) 0.37(d) 0.41(d)
Net realized and unrealized gain (loss)
on investments, foreign currency,
futures contracts and foreign
capital gains tax 1.42 1.11 1.16 (2.09)(f) (3.08) 1.36
-------- -------- -------- -------- -------- --------
Total from investment operations 1.73 1.36 1.41 (1.80) (2.71) 1.77
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.31) (0.31) (0.27) (0.27) (0.39) (0.41)
From net realized gains -- -- -- -- (0.74) (0.31)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.31) (0.31) (0.27) (0.27) (1.13) (0.72)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.48 $ 15.06 $ 14.01 $ 12.87 $ 14.94 $ 18.78
Total return (g) 11.54%(h) 9.75%(h) 11.07%(h)(i) (12.23)%(h) (14.94)% 10.21%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.10% 1.19% 1.16%(k) 1.12% 1.11% 1.09%
Net investment income (j) 1.92% 1.67% 2.04%(k) 2.01%(f) 2.23% 2.21%
Waiver/reimbursement 0.01% --%(l) 0.01%(k) 0.03% -- --
Portfolio turnover rate 86% 75% 122%(i) 40% 65% 59%
Net assets, end of period (000's) $167,278 $191,556 $217,935 $163,934 $230,562 $290,970
- ---------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Asset Allocation Fund was renamed the
Columbia Asset Allocation Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Asset Allocation Fund, Trust shares were
redesignated Liberty Asset Allocation Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) The Fund adopted the provisions of the AICPA Audit Guide for Investment
Companies effective November 1, 2001. The effect of the changes for the
year ended October 31, 2002 on the net investment income per share, net
realized and unrealized gain per share and the ratio of net investment
income to average net assets is $(0.01), $0.01 and (0.05)%, respectively.
(g) Total return at net asset value assuming all distributions reinvested.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
95
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, -----------------------------------
CLASS A SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.57 $ 17.59 $ 16.06 $ 19.74 $ 32.31 $ 28.95
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.05(d)(e) (0.08)(d) (0.05)(d) 0.03(d) (0.02) (0.05)(d)
Net realized and unrealized gain
(loss) on investments 2.51 1.06 1.61 (3.71) (8.92) 5.13
-------- -------- -------- -------- -------- --------
Total from investment operations 2.56 0.98 1.56 (3.68) (8.94) 5.08
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.02) -- (0.03) -- -- --
From net realized gains -- -- -- -- (3.63) (1.72)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.02) -- (0.03) -- (3.63) (1.72)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 21.11 $ 18.57 $ 17.59 $ 16.06 $ 19.74 $ 32.31
Total return (f)(g) 13.80% 5.57% 9.72%(h) (18.64)% (30.43)% 18.36%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.11% 1.28% 1.30%(j) 1.12% 1.13% 1.12%
Net investment income (loss) (i) 0.25% (0.40)% (0.30)%(j) 0.14% (0.10)% (0.17)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.05% 0.03% 0.11%
Portfolio turnover rate 113% 126% 91%(h) 43% 48% 54%
Net assets, end of period (000's) $ 10,422 $ 3,867 $ 1,887 $ 56 $ 671 $ 142
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime A shares were
redesignated Liberty Equity Growth Fund, Class A shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
96
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ----------------------------------
CLASS B SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.76 $ 16.96 $ 15.57 $ 19.32 $ 31.94 $ 28.84
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.09)(d)(e) (0.21)(d) (0.14)(d) (0.14)(d) (0.19) (0.29)(d)
Net realized and unrealized
gain (loss) on investments 2.40 1.01 1.53 (3.61) (8.80) 5.11
-------- -------- -------- -------- -------- --------
Total from investment operations 2.31 0.80 1.39 (3.75) (8.99) 4.82
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (3.63) (1.72)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.07 $ 17.76 $ 16.96 $ 15.57 $ 19.32 $ 31.94
Total return (f)(g) 13.01% 4.72% 8.93%(h) (19.41)% (31.00)% 17.48%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.86% 2.03% 2.13%(j) 1.99% 1.95% 1.87%
Net investment loss (i) (0.48)% (1.15)% (0.97)%(j) (0.73)% (0.92)% (0.92)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.05% 0.03% 0.15%
Portfolio turnover rate 113% 126% 91%(h) 43% 48% 54%
Net assets, end of period (000's) $ 7,799 $ 3,195 $ 1,013 $ 207 $ 309 $ 450
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Prime B shares were
redesignated Liberty Equity Growth Fund, Class B shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
97
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
----------------------- SEPTEMBER 30,
CLASS C SHARES 2005 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.79 $ 16.98 $ 16.04
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.09)(e) (0.21) (0.13)
Net realized and unrealized gain on investments 2.40 1.02 1.07
------- -------- -------
Total from investment operations 2.31 0.81 0.94
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.10 $ 17.79 $ 16.98
Total return (f)(g) 12.98% 4.77% 5.86%(h)
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.86% 2.03% 2.00%(j)
Net investment loss (i) (0.45)% (1.15)% (0.92)%(j)
Waiver/reimbursement --%(k) --%(k) 0.02%(j)
Portfolio turnover rate 113% 126% 91%(h)
Net assets, end of period (000's) $ 1,419 $ 780 $ 524
- --------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. 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) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming no contingent deferred sales
charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
98
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ----------------------------------
CLASS G SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.21 $ 16.43 $ 15.11 $ 18.79 $ 31.22 $ 28.27
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.06)(d)(e) (0.20)(d) (0.15)(d) (0.17)(d) (0.21) (0.35)(d)
Net realized and unrealized
gain (loss) on investments 2.30 0.98 1.47 (3.51) (8.59) 5.02
-------- -------- -------- -------- -------- --------
Total from investment operations 2.24 0.78 1.32 (3.68) (8.80) 4.67
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (3.63) (1.72)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.45 $ 17.21 $ 16.43 $ 15.11 $ 18.79 $ 31.22
Total return (f)(g) 13.02% 4.75% 8.66%(h) (19.49)% (31.16)% 17.29%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.81% 2.02% 2.31%(j) 2.18% 2.11% 2.07%
Net investment loss (i) (0.33)% (1.14)% (1.02)%(j) (0.92)% (1.08)% (1.11)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.07% 0.02% 0.02%
Portfolio turnover rate 113% 126% 91%(h) 43% 48% 54%
Net assets, end of period (000's) $ 46,276 $ 46,328 $ 54,850 $ 64,156 $ 92,292 $130,347
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail B shares were
redesignated Liberty Equity Growth Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
99
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
----------------------- SEPTEMBER 30, -----------------------------------
CLASS T SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.46 $ 17.50 $ 15.98 $ 19.70 $ 32.31 $ 28.99
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07(d)(e) (0.09)(d) (0.02)(d) (0.02)(d) (0.07) (0.10)(d)
Net realized and unrealized
gain (loss) on investments 2.47 1.05 1.54 (3.70) (8.91) 5.14
-------- -------- -------- -------- -------- --------
Total from investment operations 2.54 0.96 1.52 (3.72) (8.98) 5.04
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.02) -- -- -- -- --
From net realized gains -- -- -- -- (3.63) (1.72)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.02) -- -- -- (3.63) (1.72)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 20.98 $ 18.46 $ 17.50 $ 15.98 $ 19.70 $ 32.31
Total return (f) 13.76%(g) 5.49%(g) 9.51%(g)(h) (18.88)%(g) (30.57)%(g) 18.18%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.16% 1.35% 1.45%(j) 1.34% 1.31% 1.28%
Net investment income (loss) (i) 0.33% (0.47)% (0.16)%(j) (0.08)% (0.28)% (0.33)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.07% 0.02% --
Portfolio turnover rate 113% 126% 91%(h) 43% 48% 54%
Net assets, end of period (000's) $218,095 $219,129 $235,849 $239,279 $346,214 $580,417
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Retail A shares were
redesignated Liberty Equity Growth Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
100
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA LARGE CAP GROWTH FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------- SEPTEMBER 30, -------------------------------------
CLASS Z SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.87 $ 17.84 $ 16.28 $ 19.99 $ 32.61 $ 29.15
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.11(d)(e) (0.03)(d) 0.05(d) 0.07(d) 0.02 0.01(d)
Net realized and unrealized
gain (loss) on investments 2.55 1.07 1.57 (3.78) (9.01) 5.18
---------- -------- -------- -------- -------- ----------
Total from investment operations 2.66 1.04 1.62 (3.71) (8.99) 5.19
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.03) (0.01) (0.06) -- -- (0.01)
From net realized gains -- -- -- -- (3.63) (1.72)
---------- -------- -------- -------- -------- ----------
Total distributions declared
to shareholders (0.03) (0.01) (0.06) -- (3.63) (1.73)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 21.50 $ 18.87 $ 17.84 $ 16.28 $ 19.99 $ 32.61
Total return (f) 14.12%(g) 5.83%(g) 9.93%(g)(h) (18.51)%(g) (30.29)%(g) 18.63%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 0.86% 1.03% 0.99%(j) 0.91% 0.93% 0.91%
Net investment income (loss) (i) 0.53% (0.15)% 0.30%(j) 0.35% 0.10% 0.04%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.05% 0.01% --
Portfolio turnover rate 113% 126% 91%(h) 43% 48% 54%
Net assets, end of period (000's) $1,242,736 $634,710 $670,649 $699,215 $845,887 $1,258,399
- ---------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Growth Fund was renamed the
Columbia Large Cap Growth Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Equity Growth Fund, Trust shares were
redesignated Liberty Equity Growth Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.09 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
101
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
----------------------- SEPTEMBER 30,
CLASS A SHARES 2005 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.71 $ 11.02 $ 10.06
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (d) 0.17(e) 0.17 0.04
Net realized and unrealized gain on investments 1.88 1.75 0.92
------- -------- ---------
Total from investment operations 2.05 1.92 0.96
- --------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.16) (0.23) --
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.60 $ 12.71 $ 11.02
Total return (f) 16.21%(g) 17.53% 9.54%(h)
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.23% 1.31% 1.31%(j)
Net investment income (i) 1.21% 1.34% 0.49%(j)
Waiver/reimbursement 0.01% -- --
Portfolio turnover rate 94% 101% 50%(h)
Net assets, end of period (000's) $ 4,269 $ 2,511 $ 903
- --------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class A shares were initially offered on November 25, 2002. 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) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
102
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
----------------------- SEPTEMBER 30,
CLASS B SHARES 2005 2004 (a) 2003 (b)(c)
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.16 $ 10.49 $ 9.67
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (d) 0.06(e) 0.07 (0.02)
Net realized and unrealized gain on investments 1.80 1.67 0.84
------- -------- ---------
Total from investment operations 1.86 1.74 0.82
- --------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.07) --
- --------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.96 $ 12.16 $ 10.49
Total return (f) 15.30%(g) 16.64% 8.48%(h)
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.98% 2.06% 2.26%(j)
Net investment income (loss) (i) 0.46% 0.60% (0.27)%(j)
Waiver/reimbursement 0.01% -- --
Portfolio turnover rate 94% 101% 50%(h)
Net assets, end of period (000's) $ 3,974 $ 2,370 $ 338
- --------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class B shares were initially offered on November 25, 2002. 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) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
103
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
----------------------- SEPTEMBER 30,
CLASS C SHARES 2005 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.14 $ 10.47 $ 9.67
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (d) 0.06(e) 0.07 (0.05)
Net realized and unrealized gain on investments 1.80 1.67 0.85
------- -------- ---------
Total from investment operations 1.86 1.74 0.80
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.07) --
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.94 $ 12.14 $ 10.47
Total return (f) 15.33%(g) 16.67% 8.27%(g)(h)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.98% 2.07% 2.49%(j)
Net investment income (loss) (i) 0.49% 0.63% (0.60)%(j)
Waiver/reimbursement 0.01% -- 0.49%(j)
Portfolio turnover rate 94% 101% 50%(h)
Net assets, end of period (000's) $ 453 $ 291 $ 24
- ----------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 25, 2002. 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) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
104
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS G SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.17 $ 10.50 $ 9.21 $ 12.10 $ 16.73 $ 18.08
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.08(d)(e) 0.08(d) (0.04)(d) (0.19) (0.10) (0.15)
Net realized and unrealized
gain (loss) on investments 1.78 1.67 1.33 (2.35) (1.64) 1.25
-------- -------- -------- -------- -------- --------
Total from investment operations 1.86 1.75 1.29 (2.54) (1.74) 1.10
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.06) (0.08) -- -- -- --
From net realized gains -- -- -- 0.35) (2.89) (2.45)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.06) (0.08) -- (0.35) (2.89) (2.45)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.97 $ 12.17 $ 10.50 $ 9.21 $ 12.10 $ 16.73
Total return (f) 15.35%(g) 16.67% 14.01%(h) (21.85)% (11.00)%(g) 7.12%(g)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.93% 2.06% 2.31%(j) 2.18% 2.13% 2.09%
Net investment income (loss) (i) 0.64% 0.64% (0.47)%(j) (1.15)% (0.91)% (0.83)%
Waiver/reimbursement 0.01% -- -- -- 0.02% 0.03%
Portfolio turnover rate 94% 101% 50%(h) 99% 127% 72%
Net assets, end of period (000's) $ 4,326 $ 7,502 $ 11,074 $ 16,791 $ 25,776 $ 30,555
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Retail B shares were
redesignated Liberty Equity Value Fund, Class G shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
105
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS T SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.72 $ 11.00 $ 9.58 $ 12.48 $ 17.05 $ 18.28
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.17(d)(e) 0.16(d) 0.03(d) (0.05) (0.02) (0.02)
Net realized and unrealized
gain (loss) on investments 1.86 1.76 1.39 (2.50) (1.66) 1.25
-------- -------- -------- -------- -------- --------
Total from investment operations 2.03 1.92 1.42 (2.55) (1.68) 1.23
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.15) (0.20) -- -- -- (0.01)
In excess of net investment income -- -- -- -- -- --(f)
From net realized gains -- -- -- (0.35) (2.89) (2.45)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.15) (0.20) -- (0.35) (2.89) (2.46)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.60 $ 12.72 $ 11.00 $ 9.58 $ 12.48 $ 17.05
Total return (g) 16.06%(h) 17.54% 14.82%(i) (21.31)% (10.27)%(h) 7.83%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (j) 1.28% 1.38% 1.50%(k) 1.41% 1.39% 1.36%
Net investment income (loss) (j) 1.22% 1.31% 0.35%(k) (0.38)% (0.17)% (0.10)%
Waiver/reimbursement 0.01% -- -- -- 0.01% --
Portfolio turnover rate 94% 101% 50%(i) 99% 127% 72%
Net assets, end of period (000's) $134,792 $133,094 $127,993 $123,085 $180,435 $226,836
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Retail A shares were
redesignated Liberty Equity Value Fund, Class T shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
106
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA DISCIPLINED VALUE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS Z SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.95 $ 11.24 $ 9.75 $ 12.65 $ 17.17 $ 18.35
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.21(d)(e) 0.20(d) 0.08(d) (0.02) 0.02 0.04
Net realized and unrealized
gain (loss) on investments 1.91 1.79 1.41 (2.53) (1.65) 1.25
-------- -------- -------- -------- -------- --------
Total from investment operations 2.12 1.99 1.49 (2.55) (1.63) 1.29
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.20) (0.28) -- -- -- (0.02)
In excess of net investment income -- -- -- -- -- --(f)
From net realized gains -- -- -- (0.35) (2.89) (2.45)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.20) (0.28) -- (0.35) (2.89) (2.47)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.87 $ 12.95 $ 11.24 $ 9.75 $ 12.65 $ 17.17
Total return (g) 16.43%(h) 17.86% 15.28%(i) (20.96)% (9.91)% 8.22%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (j) 0.98% 1.06% 1.04%(k) 0.98% 1.00% 1.00%
Net investment income (j) 1.53% 1.62% 0.82%(k) 0.05% 0.22% 0.26%
Waiver/reimbursement 0.01% -- -- -- -- --
Portfolio turnover rate 94% 101% 50%(i) 99% 127% 72%
Net assets, end of period (000's) $283,187 $283,469 $224,137 $167,867 $152,002 $164,864
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Equity Value Fund was renamed the
Columbia Disciplined Value Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 25, 2002, the Galaxy Equity Value Fund, Trust shares were
redesignated Liberty Equity Value Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.02 per share.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
107
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, -------------------------------------
CLASS A SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.01 $ 11.22 $ 10.08 $ 12.74 $ 16.41 $ 16.00
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07(e)(f) --(e)(g) 0.03(e) 0.03(e) 0.02 0.04
Net realized and unrealized
gain (loss) on investments 1.93 0.80 1.16 (2.23) (2.38) 1.34
-------- -------- -------- -------- -------- --------
Total from investment operations 2.00 0.80 1.19 (2.20) (2.36) 1.38
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.07) (0.01) (0.05) (0.02) (0.03) (0.06)
In excess of net investment income -- -- -- -- --(g) --
From net realized gains (0.35) -- -- (0.44) (1.28) (0.91)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.42) (0.01) (0.05) (0.46) (1.31) (0.97)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.59 $ 12.01 $ 11.22 $ 10.08 $ 12.74 $ 16.41
Total return (h) 16.98%(i) 7.09%(i) 11.82%(j) (18.14)%(i) (15.34)%(i) 9.27%(i)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (k) 1.24% 1.35% 1.48%(l) 1.28% 1.19% 1.14%
Net investment income (loss) (k) 0.59% (0.02)% 0.37%(l) 0.25% 0.22% 0.30%
Waiver/reimbursement 0.09% --%(m) -- 0.24% 0.03% 0.10%
Portfolio turnover rate 105% 115% 55%(j) 13% 19% 42%
Net assets, end of period (000's) $ 10,393 $ 9,304 $ 7,570 $ 15 $ 60 $ 156
- --------------------------------------------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On December 9, 2002, the Galaxy Growth & Income Fund, Prime A shares were
redesignated Liberty Large Cap Core Fund, Class A shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.05 per share.
(g) Rounds to less than $0.01 per share.
(h) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(i) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(j) Not annualized.
(k) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(l) Annualized.
(m) Rounds to less than 0.01%.
108
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, -------------------------------------
CLASS B SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.68 $ 10.99 $ 9.90 $ 12.59 $ 16.32 $ 15.97
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.04)(e)(f) (0.09)(e) (0.04)(e) (0.06)(e) (0.07) (0.07)
Net realized and unrealized
gain (loss) on investments 1.88 0.78 1.14 (2.19) (2.38) 1.33
-------- -------- -------- -------- -------- --------
Total from investment operations 1.84 0.69 1.10 (2.25) (2.45) 1.26
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.05) -- (0.01) -- -- --
From net realized gains (0.35) -- -- (0.44) (1.28) (0.91)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.40) -- (0.01) (0.44) (1.28) (0.91)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.12 $ 11.68 $ 10.99 $ 9.90 $ 12.59 $ 16.32
Total return (g) 16.02%(h) 6.28%(h) 11.12%(i) (18.75)%(h) (15.95)%(h) 8.38%(h)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (j) 1.99% 2.09% 2.19%(k) 2.02% 1.96% 1.89%
Net investment loss (j) (0.31)% (0.76)% (0.38)%(k) (0.49)% (0.55)% (0.45)%
Waiver/reimbursement 0.09% --%(l) -- 0.02% 0.04% 0.18%
Portfolio turnover rate 105% 115% 55%(i) 13% 19% 42%
Net assets, end of period (000's) $ 6,628 $ 3,425 $ 1,755 $ 55 $ 109 $ 129
- --------------------------------------------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On December 9, 2002, the Galaxy Growth & Income Fund, Prime B shares were
redesignated Liberty Large Cap Core Fund, Class B shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.05 per share.
(g) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
109
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
-------------------------- SEPTEMBER 30,
CLASS C SHARES 2005 (a) 2004 (b) 2003 (c)(d)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.68 $ 10.99 $ 10.21
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (e) (0.03)(f) (0.09) (0.04)
Net realized and unrealized gain on investments 1.88 0.78 0.83
Total from investment operations 1.85 0.69 0.79
- ----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.05) -- --
From net realized gains (0.35) -- (0.01)
Total distributions declared to shareholders (0.40) -- (0.01)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.13 $ 11.68 $ 10.99
Total return (g) 16.10%(h) 6.28%(h) 7.74%(i)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (j) 1.99% 2.09% 2.18%(k)
Net investment loss (j) (0.25)% (0.74)% (0.42)%(k)
Waiver/reimbursement 0.09% --%(l) --
Portfolio turnover rate 105% 115% 55%(i)
Net assets, end of period (000's) $ 605 $ 345 $ 223
- ----------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) Class C shares were initially offered on December 9, 2002. Per share data
and total return reflect activity from that date.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Net investment loss per share reflects a special dividend. The effect of
this dividend amounted to $0.05 per share.
(g) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
110
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
-------------------------- SEPTEMBER 30, ----------------------------------
CLASS G SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.57 $ 10.89 $ 9.82 $ 12.50 $ 16.23 $ 15.90
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) --(e)(f)(g) (0.09)(e) (0.02)(e) (0.06)(e) (0.09) (0.10)
Net realized and unrealized
gain (loss) on investments 1.83 0.77 1.10 (2.18) (2.36) 1.34
-------- -------- -------- -------- -------- --------
Total from investment operations 1.83 0.68 1.08 (2.24) (2.45) 1.24
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.05) -- (0.01) -- -- --
From net realized gains (0.35) -- -- (0.44) (1.28) (0.91)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.40) -- (0.01) (0.44) (1.28) (0.91)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.00 $ 11.57 $ 10.89 $ 9.82 $ 12.50 $ 16.23
Total return (h) 16.10%(i) 6.24%(i) 11.00%(i)(j) (18.80)%(i) (16.11)% 8.35%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (k) 1.94% 2.09% 2.19%(l) 2.08% 2.05% 2.04%
Net investment income (loss) (k) 0.03% (0.77)% (0.28)%(l) (0.55)% (0.64)% (0.60)%
Waiver/reimbursement 0.09% 0.02% 0.05%(l) 0.02% -- --
Portfolio turnover rate 105% 115% 55%(j) 13% 19% 42%
Net assets, end of period (000's) $ 9,218 $ 16,419 $ 28,917 $ 31,407 $ 48,512 $ 61,857
- --------------------------------------------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On December 9, 2002, the Galaxy Growth & Income Fund, Retail B shares were
redesignated Liberty Large Cap Core Fund, Class G shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share. (g) Net investment income per share
reflects a special dividend. The effect of this dividend amounted to $0.05
per share.
(h) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(i) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(j) Not annualized.
(k) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(l) Annualized.
111
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS T SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.95 $ 11.18 $ 10.05 $ 12.70 $ 16.37 $ 15.98
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.07(e)(f) (0.01)(e) 0.04(e) 0.02(e) 0.02 0.02
Net realized and unrealized
gain (loss) on investments 1.92 0.78 1.14 (2.22) (2.39) 1.33
-------- -------- -------- -------- -------- --------
Total from investment operations 1.99 0.77 1.18 (2.20) (2.37) 1.35
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.07) --(g) (0.05) (0.01) (0.02) (0.05)
In excess of net investment income -- -- -- -- --(g) --(g)
From net realized gains (0.35) -- -- (0.44) (1.28) (0.91)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.42) -- (0.05) (0.45) (1.30) (0.96)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.52 $ 11.95 $ 11.18 $ 10.05 $ 12.70 $ 16.37
Total return (h) 16.97%(i) 6.92%(i) 11.76%(j) (18.16)%(i) (15.46)%(i) 9.06%(i)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (k) 1.29% 1.40% 1.46%(l) 1.35% 1.34% 1.28%
Net investment income (loss) (k) 0.57% (0.07)% 0.45%(l) 0.18% 0.07% 0.16%
Waiver/reimbursement 0.09% --%(m) -- 0.01% 0.02% 0.09%
Portfolio turnover rate 105% 115% 55%(j) 13% 19% 42%
Net assets, end of period (000's) $180,345 $179,310 $185,938 $180,269 $259,884 $217,423
- --------------------------------------------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On December 9, 2002, the Galaxy Growth & Income Fund, Retail A shares were
redesignated Liberty Large Cap Core Fund, Class T shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.05 per share.
(g) Rounds to less than $0.01 per share.
(h) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(i) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(j) Not annualized.
(k) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(l) Annualized.
(m) Rounds to less than 0.01%.
112
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA COMMON STOCK FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS Z SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.05 $ 11.25 $ 10.11 $ 12.77 $ 16.43 $ 16.02
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.09(e)(f) 0.03(e) 0.08(e) 0.07(e) 0.06 0.08
Net realized and unrealized
gain (loss) on investments 1.95 0.79 1.15 (2.23) (2.39) 1.32
-------- -------- -------- -------- -------- --------
Total from investment operations 2.04 0.82 1.23 (2.16) (2.33) 1.40
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.08) (0.02) (0.09) (0.06) (0.05) (0.08)
In excess of net investment income -- -- -- -- --(g) --(g)
From net realized gains (0.35) -- -- (0.44) (1.28) (0.91)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (0.43) (0.02) (0.09) (0.50) (1.33) (0.99)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.66 $ 12.05 $ 11.25 $ 10.11 $ 12.77 $ 16.43
Total return (h) 17.25%(i) 7.28%(i) 12.20%(j) (17.85)%(i) (15.12)% 9.38%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (k) 0.99% 1.07% 1.03%(l) 0.97% 0.97% 1.00%
Net investment income (k) 0.67% 0.26% 0.89%(l) 0.56% 0.44% 0.44%
Waiver/reimbursement 0.09% --%(m) -- 0.03% -- --
Portfolio turnover rate 105% 115% 55%(j) 13% 19% 42%
Net assets, end of period (000's) $310,472 $175,124 $190,195 $340,496 $460,302 $678,398
- --------------------------------------------------------------------------------------------------------------------------------
(a) On September 23, 2005, the Columbia Large Cap Core Fund was renamed the
Columbia Common Stock Fund.
(b) On October 13, 2003, the Liberty Large Cap Core Fund was renamed the
Columbia Large Cap Core Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On December 9, 2002, the Galaxy Growth & Income Fund, Trust shares were
redesignated Liberty Large Cap Core Fund, Class Z shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Net investment income per share reflects a special dividend. The effect of
this dividend amounted to $0.05 per share.
(g) Rounds to less than $0.01 per share.
(h) Total return at net asset value assuming all distributions reinvested.
(i) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(j) Not annualized.
(k) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(l) Annualized.
(m) Rounds to less than 0.01%.
113
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS A SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.54 $ 15.30 $ 12.64 $ 14.05 $ 14.33 $ 13.04
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (e) (0.06) (0.07) (0.04) (0.03) 0.02 0.05
Net realized and unrealized
gain (loss) on investments 2.91 2.75 3.35 (0.07) 1.61 2.64
-------- -------- -------- -------- -------- --------
Total from investment operations 2.85 2.68 3.31 (0.10) 1.63 2.69
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- -- (0.04) (0.04)
From net realized gains (1.07) (0.44) (0.65) (1.31) (1.87) (1.36)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (1.07) (0.44) (0.65) (1.31) (1.91) (1.40)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.32 $ 17.54 $ 15.30 $ 12.64 $ 14.05 $ 14.33
Total return (f)(g) 16.69% 17.73% 27.25%(h) (1.73)% 12.87% 22.26%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.13% 1.15% 1.24%(j) 1.29% 1.23% 1.16%
Net investment income (loss) (i) (0.31)% (0.40)% (0.28)%(j) (0.19)% 0.17% 0.36%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.01% 0.04% 0.16%
Portfolio turnover rate 16% 26% 19%(h) 23% 46% 43%
Net assets, end of period (000's) $211,527 $211,502 $ 57,462 $ 210 $ 168 $ 189
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime A shares were
redesignated Liberty Small Cap Fund, Class A shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
114
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS B SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.89 $ 14.75 $ 12.31 $ 13.82 $ 14.19 $ 12.98
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (e) (0.19) (0.19) (0.15) (0.14) (0.10) (0.05)
Net realized and unrealized
gain (loss) on investments 2.81 2.67 3.24 (0.06) 1.60 2.62
-------- -------- -------- -------- -------- --------
Total from investment operations 2.62 2.48 3.09 (0.20) 1.50 2.57
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.95) (0.34) (0.65) (1.31) (1.87) (1.36)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.56 $ 16.89 $ 14.75 $ 12.31 $ 13.82 $ 14.19
Total return (f)(g) 15.87% 16.96% 26.14%(h) (2.55)% 11.91% 21.46%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.88% 1.90% 2.10%(j) 2.12% 2.08% 1.93%
Net investment loss (i) (1.06)% (1.15)% (1.14)%(j) (1.02)% (0.68)% (0.41)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.01% 0.07% 0.53%
Portfolio turnover rate 16% 26% 19%(h) 23% 46% 43%
Net assets, end of period (000's) $ 42,439 $ 40,170 $ 11,122 $ 282 $ 198 $ 170
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On November 18, 2002, the Galaxy Small Cap Value Fund, Prime B shares were
redesignated Liberty Small Cap Fund, Class B shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
115
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
-------------------------- SEPTEMBER 30,
CLASS C SHARES 2005 (a) 2004 (b) 2003 (c)(d)
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.91 $ 14.77 $ 12.55
- ------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (e) (0.19) (0.19) (0.14)
Net realized and unrealized gain on investments 2.80 2.67 3.01
--------- --------- ----------
Total from investment operations 2.61 2.48 2.87
- ------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.95) (0.34) (0.65)
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.57 $ 16.91 $ 14.77
Total return (f)(g) 15.79% 16.94% 23.90%(h)
- ------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (i) 1.88% 1.90% 2.03%(j)
Net investment loss (i) (1.06)% (1.15)% (1.10)%(j)
Waiver/reimbursement --%(k) --%(k) 0.02%(j)
Portfolio turnover rate 16% 26% 19%(h)
Net assets, end of period (000's) $ 56,163 $ 64,686 $ 12,670
- ------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) Class C shares were initially offered on November 18, 2002. Per share data
and total return reflect activity from that date.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
116
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS G SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.75 $ 14.63 $ 12.22 $ 13.72 $ 14.13 $ 12.96
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (e) (0.18) (0.18) (0.12) (0.14) (0.11) (0.10)
Net realized and unrealized
gain (loss) on investments 2.78 2.64 3.18 (0.05) 1.57 2.63
-------- -------- -------- -------- -------- --------
Total from investment operations 2.60 2.46 3.06 (0.19) 1.46 2.53
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains (0.95) (0.34) (0.65) (1.31) (1.87) (1.36)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.40 $ 16.75 $ 14.63 $ 12.22 $ 13.72 $ 14.13
Total return (f) 15.91%(g) 16.97%(g) 26.09%(g)(h) (2.49)%(g) 11.73% 21.06%(g)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.83% 1.87% 2.10%(j) 2.12% 2.21% 2.23%
Net investment loss (i) (1.01)% (1.11)% (1.03)%(j) (1.02)% (0.80)% (0.71)%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.01% -- 0.18%
Portfolio turnover rate 16% 26% 19%(h) 23% 46% 43%
Net assets, end of period (000's) $ 8,963 $ 10,952 $ 10,353 $ 9,046 $ 5,278 $ 2,838
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail B shares
were redesignated Liberty Small Cap Fund, Class G shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
117
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS T SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.40 $ 15.16 $ 12.55 $ 13.96 $ 14.25 $ 12.98
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (e) (0.07) (0.08) (0.03) (0.03) --(f) 0.01
Net realized and unrealized
gain (loss) on investments 2.88 2.74 3.29 (0.07) 1.59 2.63
-------- -------- -------- -------- -------- --------
Total from investment operations 2.81 2.66 3.26 (0.10) 1.59 2.64
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income -- -- -- -- (0.01) (0.01)
From net realized gains (1.06) (0.42) (0.65) (1.31) (1.87) (1.36)
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders (1.06) (0.42) (0.65) (1.31) (1.88) (1.37)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.15 $ 17.40 $ 15.16 $ 12.55 $ 13.96 $ 14.25
Total return (g) 16.58%(h) 17.73%(h) 27.03%(h)(i) (1.75)%(h) 12.66% 21.96%(h)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (j) 1.18% 1.21% 1.34%(k) 1.33% 1.42% 1.44%
Net investment income (loss) (j) (0.36)% (0.45)% (0.26)%(k) (0.23)% (0.02)% 0.08%
Waiver/reimbursement --%(l) --%(l) 0.02%(k) 0.01% -- 0.11%
Portfolio turnover rate 16% 26% 19%(i) 23% 46% 43%
Net assets, end of period (000's) $150,042 $146,752 $134,455 $115,468 $100,159 $ 87,457
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was redesignated the
Columbia Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On November 18, 2002, the Galaxy Small Cap Value Fund, Retail A shares
were renamed Liberty Small Cap Fund, Class T shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Rounds to less than $0.01 per share.
(g) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(h) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(i) Not annualized.
(j) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k) Annualized.
(l) Rounds to less than 0.01%.
118
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL CAP CORE FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
-------------------------- SEPTEMBER 30, ------------------------------------
CLASS Z SHARES 2005 (a) 2004 (b) 2003 (c)(d) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 17.73 $ 15.45 $ 12.75 $ 14.11 $ 14.38 $ 13.07
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (e) (0.01) (0.03) 0.02 0.03 0.07 0.08
Net realized and unrealized
gain (loss) on investments 2.94 2.80 3.34 (0.07) 1.60 2.65
---------- ---------- -------- -------- -------- --------
Total from investment operations 2.93 2.77 3.36 (0.04) 1.67 2.73
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income -- -- (0.01) (0.01) (0.07) (0.06)
From net realized gains (1.12) (0.49) (0.65) (1.31) (1.87) (1.36)
---------- ---------- -------- -------- -------- --------
Total distributions declared
to shareholders (1.12) (0.49) (0.66) (1.32) (1.94) (1.42)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.54 $ 17.73 $ 15.45 $ 12.75 $ 14.11 $ 14.38
Total return (f) 16.96%(g) 18.12%(g) 27.44%(g)(h) (1.26)%(g) 13.20% 22.62%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 0.88% 0.90% 0.92%(j) 0.90% 0.92% 0.94%
Net investment income (loss) (i) (0.06)% (0.15)% 0.14%(j) 0.20% 0.48% 0.58%
Waiver/reimbursement --%(k) --%(k) 0.02%(j) 0.01% -- --
Portfolio turnover rate 16% 26% 19%(h) 23% 46% 43%
Net assets, end of period (000's) $1,058,362 $1,101,312 $789,666 $485,197 $425,687 $332,703
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 7, 2005, the Columbia Small Cap Fund was renamed the Columbia
Small Cap Core Fund.
(b) On October 13, 2003, the Liberty Small Cap Fund was renamed the Columbia
Small Cap Fund.
(c) The Fund changed its fiscal year end from October 31 to September 30.
(d) On November 18, 2002, the Galaxy Small Cap Value Fund, Trust shares were
redesignated Liberty Small Cap Fund, Class Z shares.
(e) Per share data was calculated using average shares outstanding during the
period.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
119
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
-------------------------- SEPTEMBER 30,
CLASS A SHARES 2005 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.94 $ 14.10 $ 11.74
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.18) (0.19) (0.17)
Net realized and unrealized gain on investments 2.39 2.03 2.53
--------- --------- ----------
Total from investment operations 2.21 1.84 2.36
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.15 $ 15.94 $ 14.10
Total return (e) 13.86%(f) 13.05%(f) 20.10%(g)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 1.34% 1.35% 1.62%(i)
Net investment loss (h) (1.07)% (1.16)% (1.42)%(i)
Waiver/reimbursement 0.02% 0.01% --
Portfolio turnover rate 110% 54% 123%(g)
Net assets, end of period (000's) $ 5,287 $ 4,586 $ 384
- ----------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class A shares were initially offered on November 18, 2002. 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 no initial sales charge or
contingent deferred sales charge.
(f) Had the Investment Advisor and/or any of its affiliates 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.
120
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
-------------------------- SEPTEMBER 30,
CLASS B SHARES 2005 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.88 $ 13.26 $ 11.13
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.29) (0.29) (0.25)
Net realized and unrealized gain on investments 2.23 1.91 2.38
--------- --------- ----------
Total from investment operations 1.94 1.62 2.13
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.82 $ 14.88 $ 13.26
Total return (e) 13.04%(f) 12.22%(f) 19.14%(g)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.09% 2.47%(i)
Net investment loss (h) (1.82)% (1.90)% (2.24)%(i)
Waiver/reimbursement 0.02% 0.01% --
Portfolio turnover rate 110% 54% 123%(g)
Net assets, end of period (000's) $ 2,398 $ 1,826 $ 203
- ----------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class B shares were initially offered on November 18, 2002. 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 no contingent deferred sales
charge.
(f) Had the Investment Advisor and/or any of its affiliates 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.
121
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED
-------------------------- SEPTEMBER 30,
CLASS C SHARES 2005 2004 (a) 2003 (b)(c)
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.84 $ 13.22 $ 11.13
- ----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (d) (0.29) (0.29) (0.29)
Net realized and unrealized gain on investments 2.22 1.91 2.38
--------- --------- ----------
Total from investment operations 1.93 1.62 2.09
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.77 $ 14.84 $ 13.22
Total return (e) 13.01%(f) 12.25%(f) 18.78%(g)
- ----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Expenses (h) 2.09% 2.09% 2.84%(i)
Net investment loss (h) (1.82)% (1.90)% (2.59)%(i)
Waiver/reimbursement 0.02% 0.01% --
Portfolio turnover rate 110% 54% 123%(g)
Net assets, end of period (000's) $ 1,074 $ 982 $ 56
- ----------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) Class C shares were initially offered on November 18, 2002. 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 no contingent deferred sales
charge.
(f) Had the Investment Advisor and/or any of its affiliates 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.
122
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS G SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.85 $ 13.24 $ 10.65 $ 14.30 $ 21.10 $ 15.31
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.28)(d) (0.30)(d) (0.25)(d) (0.27)(d) (0.25) (0.37)
Net realized and unrealized gain
(loss) on investments 2.22 1.91 2.84 (3.38) (3.15) 6.16
-------- -------- -------- -------- -------- --------
Total from investment operations 1.94 1.61 2.59 (3.65) (3.40) 5.79
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (3.40) --
In excess of net realized gains -- -- -- -- --(e) --
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders -- -- -- -- (3.40) --
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.79 $ 14.85 $ 13.24 $ 10.65 $ 14.30 $ 21.10
Total return (f) 13.06%(g) 12.16%(g) 24.32%(h) (25.52)%(g) (17.66)% 37.82%(g)
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 2.04% 2.16% 2.53%(j) 2.29% 2.25% 2.24%
Net investment loss (i) (1.77)% (1.98)% (2.34)%(j) (1.97)% (1.74)% (1.79)%
Waiver/reimbursement 0.02% 0.01% -- 0.03% -- 0.01%
Portfolio turnover rate 110% 54% 123%(h) 96% 75% 91%
Net assets, end of period (000's) $ 3,676 $ 4,565 $ 6,651 $ 9,148 $ 15,190 $ 18,936
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail B
shares were redesignated Liberty Small Company Equity Fund, Class G
shares. (d) Per share data was calculated using average shares outstanding
during the period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
123
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS T SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.92 $ 14.09 $ 11.23 $ 14.95 $ 21.75 $ 15.66
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.19)(d) (0.20)(d) (0.15)(d) (0.16)(d) (0.17) (0.22)
Net realized and unrealized gain
(loss) on investments 2.38 2.03 3.01 (3.56) (3.23) 6.31
-------- -------- -------- -------- -------- --------
Total from investment operations 2.19 1.83 2.86 (3.72) (3.40) 6.09
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (3.40) --
In excess of net realized gains -- -- -- -- --(e) --
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders -- -- -- -- (3.40) --
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 18.11 $ 15.92 $ 14.09 $ 11.23 $ 14.95 $ 21.75
Total return (f) 13.76%(g) 12.99%(g) 25.47%(g)(h) (24.88)%(g) (17.03)% 38.89%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.39% 1.41% 1.54%(j) 1.46% 1.42% 1.44%
Net investment loss (i) (1.12)% (1.23)% (1.35)%(j) (1.14)% (0.91)% (0.99)%
Waiver/reimbursement 0.02% 0.02% 0.05%(j) 0.03% -- --
Portfolio turnover rate 110% 54% 123%(h) 96% 75% 91%
Net assets, end of period (000's) $ 67,374 $ 68,359 $ 66,780 $ 57,537 $ 84,332 $125,427
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Retail A
shares were redesignated Liberty Small Company Equity Fund, Class T
shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
124
FINANCIAL HIGHLIGHTS ___________________________________________________________
COLUMBIA SMALL COMPANY EQUITY FUND
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
YEAR ENDED
SEPTEMBER 30, PERIOD ENDED YEAR ENDED OCTOBER 31,
------------------------ SEPTEMBER 30, ------------------------------------
CLASS Z SHARES 2005 2004 (a) 2003 (b)(c) 2002 2001 2000
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.84 $ 14.85 $ 11.79 $ 15.63 $ 22.48 $ 16.13
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss (0.15)(d) (0.15)(d) (0.11)(d) (0.11)(d) (0.10) (0.12)
Net realized and unrealized gain
(loss) on investments 2.53 2.14 3.17 (3.73) (3.35) 6.47
-------- -------- -------- -------- -------- --------
Total from investment operations 2.38 1.99 3.06 (3.84) (3.45) 6.35
- --------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net realized gains -- -- -- -- (3.40) --
In excess of net realized gains -- -- -- -- --(e) --
-------- -------- -------- -------- -------- --------
Total distributions declared
to shareholders -- -- -- -- (3.40) --
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.22 $ 16.84 $ 14.85 $ 11.79 $ 15.63 $ 22.48
Total return (f) 14.13%(g) 13.40%(g) 25.95%(h) (24.62)%(g) (16.63)% 39.43%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL
DATA:
Expenses (i) 1.09% 1.08% 1.12%(j) 1.04% 1.03% 1.03%
Net investment loss (i) (0.82)% (0.90)% (0.93)%(j) (0.72)% (0.52)% (0.58)%
Waiver/reimbursement 0.02% 0.01% -- 0.01% -- --
Portfolio turnover rate 110% 54% 123%(h) 96% 75% 91%
Net assets, end of period (000's) $152,785 $300,109 $293,603 $217,377 $318,414 $422,579
- --------------------------------------------------------------------------------------------------------------------------------
(a) On October 13, 2003, the Liberty Small Company Equity Fund was renamed the
Columbia Small Company Equity Fund.
(b) The Fund changed its fiscal year end from October 31 to September 30.
(c) On November 18, 2002, the Galaxy Small Company Equity Fund, Trust shares
were redesignated Liberty Small Company Equity Fund, Class Z shares.
(d) Per share data was calculated using average shares outstanding during the
period.
(e) Rounds to less than $0.01 per share.
(f) Total return at net asset value assuming all distributions reinvested.
(g) Had the Investment Advisor and/or any of its affiliates not waived or
reimbursed a portion of expenses, total return would have been reduced.
(h) Not annualized.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
125
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM ______________________________________________
COLUMBIA EQUITY FUNDS
TO THE TRUSTEES OF COLUMBIA FUNDS TRUST XI AND THE SHAREHOLDERS OF:
COLUMBIA ASSET ALLOCATION FUND
COLUMBIA LARGE CAP GROWTH FUND
COLUMBIA DISCIPLINED VALUE FUND
COLUMBIA INTERNATIONAL EQUITY FUND
COLUMBIA COMMON STOCK FUND (FORMERLY COLUMBIA LARGE CAP CORE FUND)
COLUMBIA SMALL CAP CORE FUND (FORMERLY COLUMBIA SMALL CAP FUND)
COLUMBIA SMALL COMPANY EQUITY FUND
In our opinion, the accompanying statements of assets and liabilities, including
the investment portfolios, 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 the above Funds (the "Funds") at
September 30, 2005, the results of their operations, for the years then ended,
the changes in their net assets, and their financial highlights for each of the
two years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits 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 September 30, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.
The financial statements and financial highlights of the funds as of September
30, 2003 and for fiscal periods ending on or prior to September 30, 2003 were
audited by other independent accountants, whose report dated November 14, 2003
expressed an unqualified opinion on those statements and highlights.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 21, 2005
126
UNAUDITED INFORMATION __________________________________________________________
COLUMBIA EQUITY FUNDS
FEDERAL INCOME TAX INFORMATION
COLUMBIA ASSET ALLOCATION FUND
For the fiscal year ended September 30, 2005, the Fund designates long-term
capital gains of $27,645,883.
For non-corporate shareholders 58.39% 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 October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
41.75% of the ordinary income distributed by the Fund, for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
COLUMBIA LARGE CAP GROWTH FUND
For non-corporate shareholders 100.00% or the maximum amount allowable under the
Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by the
Fund for the period October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
100.00% of the ordinary income distributed by the Fund, for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
COLUMBIA DISCIPLINED VALUE FUND
For the fiscal year ended September 30, 2005, the Fund designates long-term
capital gains of $20,745,146.
For non-corporate shareholders 84.76% 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 October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
77.75% of the ordinary income distributed by the Fund, for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
COLUMBIA COMMON STOCK FUND
For the fiscal year ended September 30, 2005, the Fund designates long-term
capital gains of $10,012,054.
For non-corporate shareholders 46.98% 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 October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
45.27% of the ordinary income distributed by the Fund, for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
COLUMBIA SMALL CAP CORE FUND
For the fiscal year ended September 30, 2005, the Fund designates long-term
capital gains of $100,246,715.
For non-corporate shareholders 50.18% 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 October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
59.96% of the ordinary income distributed by the Fund, for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
COLUMBIA SMALL COMPANY EQUITY FUND
For the fiscal year ended September 30, 2005, the Fund designates long-term
capital gains of $15,404,488.
127
TRUSTEES _______________________________________________________________________
COLUMBIA EQUITY FUNDS
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 IN
YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) 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
Chicago, IL 60666 to December, 2002; Executive Vice President and Chief Financial Officer of
Trustee (since 1996) United Airlines from July, 1999 to September, 2001; Senior Vice
President-Finance from March, 1993 to July, 1999). Oversees 86, Nash Finch
Company (food distributor)
--------------------------------------------------------------------------------
JANET LANGFORD KELLY (Age 47) Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) since March,
9534 W. Gull Lake Drive 2005; Adjunct Professor of Law, Northwestern University, since September, 2004
Richland, MI 49083-8530 (formerly Chief Administrative Officer and Senior Vice President, Kmart Holding
Trustee (since 1996) Corporation (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 86 None
--------------------------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and Chief Executive
10701 Charleston Drive Officer, U.S. Plywood Corporation (building products manufacturer)). Oversees 89
Vero Beach, FL 32963 (3), None
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,
University of Washington since September, 1993 (formerly Director, Institute for Economic Research,
Seattle, WA 98195 University of Washington from September, 2001 to June, 2003); Adjunct Professor
Trustee (since 1981) of Statistics, University of Washington, since September, 1980; Associate
Editor, Journal of Money Credit and Banking, since September, 1993; consultant
on econometric and statistical matters. Oversees 86, 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 89 (3), Saucony, Inc. (athletic footwear)
Trustee (since 1985)
--------------------------------------------------------------------------------
128
________________________________________________________________________________
COLUMBIA EQUITY FUNDS
NAME, ADDRESS AND AGE, POSITION WITH FUNDS, PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS, NUMBER OF PORTFOLIOS IN
YEAR FIRST ELECTED OR APPOINTED TO OFFICE (1) COLUMBIA 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 86, 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 86, 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
Suite 285 Partners (private equity investing) from September, 1994 to September, 2004).
Greenwich, CT 06830 Oversees 86, Anixter International (network support equipment distributor);
Trustee and Chairman of the Ventas, Inc. (real estate investment trust); Jones Lang LaSalle (real estate
Board (4) (since 1996) management services) and Ambac Financial Group (financial guaranty insurance)
--------------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 60) Retired since 1997 (formerly General Manager, Global Education Industry, IBM
359 Stickney Hill Road Corporation (computer and technology) from 1994 to 1997). Oversees 86, Chairman
Hopkinton, NH 03229 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 86, 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,
Suite 3204 1999). Oversees 89 (3), Lee Enterprises (print media), WR Hambrecht + Co.
New York, NY 10022 (financial service provider); Reader's Digest (publishing); OPENFIELD Solutions
Trustee (since 1994) (retail 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 3 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.
129
OFFICERS _______________________________________________________________________
COLUMBIA EQUITY FUNDS
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 Managing Director of the Advisor
One Financial Center since September, 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; Director of FIM Funding, Inc. since January, 2005; Senior Vice President
of Columbia Management Distributors, Inc. since January, 2005; Director of
Columbia Management Services, Inc. since January, 2005 (formerly Senior Vice
President of Columbia Management from January, 2005 to August, 2005; Senior Vice
President of BACAP Distributors LLC from January, 2005 to July, 2005; 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; Managing Director of
Boston, MA 02111 the Advisor since September, 2005 (formerly Vice President of Columbia
Treasurer (since 2000) Management from April, 2003 to August, 2005; President of the Columbia Funds,
Liberty Funds 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 56) Senior Vice President and Chief Compliance Officer of the Columbia Funds,
100 Federal Street Liberty Funds, Stein Roe Funds and All-Star Funds since August, 2004; Chief
Boston, Ma 02110 Compliance Officer of the Columbia Management Multi-Strategy Hedge Fund, LLC
Senior Vice President and Chief Compliance since August 2004; Chief Compliance Officer of the BACAP Alternative
Officer (since 2004) Multi-Strategy Hedge Fund LLC since October 2004 (formerly Partner, Carter,
Ledyard & Milburn LLP from January, 2001 to August, 2004; Counsel, Carter,
Ledyard & Milburn LLP from November, 1999 to December, 2000; Vice President and
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
One Financial Center and All-Star Funds since October, 2004; Managing Director of the Advisor since
Boston, MA 02111 September, 2005 (formerly Controller of the Columbia Funds, Liberty Funds, Stein
Chief Accounting Officer (since 2004) Roe Funds and All-Star Funds from May, 2004 to October, 2004; Assistant
Treasurer from June, 2002 to May, 2004; Vice President, Product Strategy &
Development of the Liberty Funds and Stein Roe Funds from February, 2001 to
June, 2002; Assistant Treasurer of the Liberty Funds, Stein Roe Funds and the
All-Star Funds from August, 1999 to February, 2001; 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
Controller (since 2004) Funds 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
One Financial Center December, 2004 (formerly Of Counsel, Bingham McCutchen from April, 2001 to
Boston, MA 02111 September, 2004; Executive Director and General Counsel, Massachusetts Pension
Secretary (since 2004) Reserves Investment Management Board from September, 1997 to March, 2001).
--------------------------------------------------------------------------------
130
COLUMBIA FUNDS _________________________________________________________________
COLUMBIA EQUITY FUNDS
-------------------------------------------------
GROWTH FUNDS Columbia Acorn Fund
Columbia Acorn Select
Columbia Acorn USA
Columbia Growth Stock Fund
Columbia Large Cap Growth Fund
Columbia Marsico 21st Century Fund
Columbia Marsico Focused Equities Fund
Columbia Marsico Growth Fund
Columbia Marsico Mid Cap Growth Fund
Columbia Mid Cap Growth Fund
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund II
Columbia Small Company Equity Fund
Columbia Tax-Managed Growth Fund
-------------------------------------------------
CORE FUNDS Columbia Common Stock Fund
Columbia Large Cap Core Fund
Columbia Small Cap Core Fund
Columbia Young Investor Fund
-------------------------------------------------
VALUE FUNDS Columbia Disciplined Value Fund
Columbia Dividend Income Fund
Columbia Large Cap Value Fund
Columbia Mid Cap Value Fund
Columbia Small Cap Value Fund I
Columbia Small Cap Value Fund II
Columbia Strategic Investor
-------------------------------------------------
ASSET ALLOCATION/HYBRID FUNDS Columbia Asset Allocation Fund
Columbia Asset Allocation Fund II
Columbia Balanced Fund
Columbia Liberty Fund
Columbia LifeGoal TM Balanced Growth Portfolio
Columbia LifeGoal TM Growth Portfolio
Columbia LifeGoal TM Income Portfolio
Columbia LifeGoal TM Income and Growth Portfolio
Columbia Thermostat Fund
-------------------------------------------------
INDEX FUNDS Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Index Fund
Columbia Mid Cap Index Fund
Columbia Small Cap Index Fund
-------------------------------------------------
SPECIALTY FUNDS Columbia Convertible Securities Fund
Columbia Real Estate Equity Fund
Columbia Technology Fund
Columbia Utilities Fund
-------------------------------------------------
GLOBAL/INTERNATIONAL FUNDS Columbia Acorn International
Columbia Acorn International Select
Columbia Global Value Fund
Columbia Greater China Fund
Columbia International Stock Fund
Columbia International Value Fund
Columbia Marsico International Opportunities Fund
Columbia Multi-Advisor International Equity Fund
Columbia World Equity Fund
-------------------------------------------------
TAXABLE BOND FUNDS Columbia Conservative High Yield Fund
Columbia Core Bond Fund
Columbia Federal Securities Fund
Columbia High Income Fund
Columbia High Yield Opportunity Fund
Columbia Income Fund
Columbia Intermediate Bond Fund
Columbia Intermediate Core Bond Fund
Columbia Short Term Bond Fund
Columbia Strategic Income Fund
Columbia Total Return Bond
Columbia U.S. Treasury Index Fund
131
________________________________________________________________________________
COLUMBIA EQUITY FUNDS
-------------------------------------------------
TAX-EXEMPT BOND FUNDS Columbia California Tax-Exempt Fund
Columbia CA Intermediate Municipal Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia CT Intermediate Municipal Bond Fund
Columbia FL Intermediate Municipal Bond Fund
Columbia GA Intermediate Municipal Bond Fund
Columbia High Yield Municipal Fund
Columbia Intermediate Municipal Bond Fund
Columbia MA Intermediate Municipal Bond Fund
Columbia Massachusetts Tax-Exempt Fund
Columbia MD Intermediate Municipal Bond Fund
Columbia Municipal Income Fund
Columbia NC Intermediate Municipal Bond Fund
Columbia New York Tax-Exempt Fund
Columbia NJ Intermediate Municipal Bond Fund
Columbia NY Intermediate Municipal Bond Fund
Columbia OR Intermediate Municipal Bond Fund
Columbia RI Intermediate Municipal Bond Fund
Columbia SC Intermediate Municipal Bond Fund
Columbia Short Term Municipal Bond Fund
Columbia Tax-Exempt Fund
Columbia Tax-Exempt Insured Fund
Columbia TX Intermediate Municipal Bond Fund
Columbia VA Intermediate Municipal Bond Fund
-------------------------------------------------
MONEY MARKET FUNDS Columbia Cash Reserves
Columbia CA Tax-Exempt Reserves
Columbia Government Reserves
Columbia Government Plus Reserves
Columbia MA Municipal Reserves
Columbia Money Market Reserves
Columbia Municipal Reserves
Columbia NY Tax-Exempt Reserves
Columbia Prime Reserves
Columbia Tax-Exempt Reserves
Columbia Treasury Reserves
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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A., merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
132
IMPORTANT INFORMATION ABOUT THIS REPORT ________________________________________
COLUMBIA EQUITY FUNDS
TRANSFER AGENT 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
Columbia Management Services, Inc. additional reports will be sent to you.
P.O. Box 8081
Boston MA 02266-8081 This report has been prepared for shareholders of Columbia Equity Funds. This
800-345-6611 report may also be used as sales literature when preceded or accompanied by the
current prospectus which provides details of sales charges, investment
DISTRIBUTOR objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
Columbia Management
Distributors, Inc. A description of the policies and procedures that the funds use to determine how
One Financial Center to vote proxies relating to its portfolio securities and a copy of the funds'
Boston MA 02111 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
INVESTMENT ADVISOR charge, upon request, by calling 800-368-0346. Information regarding how the
funds voted proxies relating to portfolio securities during the 12-month period
Columbia Management Advisors, LLC ended June 30, is available from the SEC's website. Information regarding how
100 Federal Street the funds voted proxies relating to portfolio securities is also available from
Boston MA 02110 the funds' website.
INDEPENDENT REGISTERED The funds file a complete schedule of portfolio holdings with the SEC for the
PUBLIC ACCOUNTING FIRM 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
PricewaterhouseCoopers LLP the SEC's Public Reference Room in Washington, D.C. Information on the operation
125 High Street of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Boston MA 02110
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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of America,
N.A, merged on September 30, 2005. At that time, the newly combined advisor
changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will continue
to operate as a SEC-registered investment advisor, wholly owned subsidiary of
Bank of America, N.A. and part of Columbia Management.
133
- --------------------------------------------------------------------------------
[PHOTO OF 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 EQUITY FUNDS ANNUAL REPORT, SEPTEMBER 30, 2005 -------------
PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
-------------
COLUMBIA MANAGEMENT(R)
(c)2005 Columbia Management Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/90888-0905 (11/05) 05/8401
[GRAPHIC]
COLUMBIA DIVIDEND INCOME FUND
Annual Report
September 30, 2005
PRESIDENT'S MESSAGE
-----------------------------------------------------------
Columbia Dividend Income Fund
[PHOTO] Christopher L. Wilson
Dear Shareholder:
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 integrated various components of Nations Funds, Galaxy Funds and
Columbia Funds, resulting in a single fund family under the Columbia name 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. In addition to expanding the level of
services available to the funds, portfolio managers and shareholders, we have
been able to achieve significant cost savings for the funds by aggregating our
business.
In September, we made major inroads in the initiative to streamline our product
offerings. This included merging several funds and renaming Nations Funds as
Columbia Funds, as well as consolidating the Nations and Columbia web sites.
Over the summer, we completed the service provider consolidation for
shareholder servicing. As we work to complete the remaining product and service
provider consolidations by the end of 2005, we remain committed to building a
mutual fund business that helps you meet, and hopefully exceed, your personal
financial goals. 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 continually earned and
will remain focused on producing results for you. We will continue to strive
for the highest standards of performance and service excellence.
All of these efforts have been undertaken to enable you, as a shareholder, to
benefit from the execution of a consolidated business plan. We believe a more
streamlined fund family with consistent performance and lower fees will provide
the best opportunity for investment growth. We also believe that providing more
robust services to you through multiple channels (Web, phones, voice response)
will be beneficial to 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 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 financial goals on target in the years to come.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
President, Columbia Funds
Head of Mutual Funds, Columbia Management
Christopher L. Wilson is Head of Mutual Funds for Columbia Management and
responsible for the day-to-day delivery of mutual fund services to the firm's
investors. Working closely with the Legal and Compliance teams, Chris oversees
all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. As President and CEO
of Columbia Funds (formerly Nations, Galaxy and Columbia Funds), Chris serves
as the primary interface to the Fund Boards. Chris joined Bank of America in
2004.
Table of Contents
Performance Information.... 1
Fund Profile............... 2
Understanding Your Expenses 3
Economic Update............ 4
Portfolio Managers' Report. 5
Financial Statements....... 7
Investment Portfolio..... 8
Statement of Assets and Liabilities.. 13
Statement of Operations.............. 15
Statement of Changes in Net Assets... 16
Notes to Financial Statements........ 18
Financial Highlights................. 24
Report of Independent
Registered Public Accounting Firm...... 30
Unaudited Information.................. 31
Trustees............................... 32
Officers............................... 34
Columbia Funds......................... 35
Important Information
About This Report...................... 37
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.
--------------------------
Not FDIC May Lose Value
Insured -----------------
No Bank Guarantee
- -----------------
PERFORMANCE INFORMATION
-----------------------------
Columbia Dividend Income Fund
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
Performance of a $10,000 investment 03/04/98 - 09/30/05 ($)
sales charge: without with
----------------------------
Class A 15,570 14,675
----------------------------
Class B 14,806 14,806
----------------------------
Class C 14,794 14,794
----------------------------
Class G 14,800 14,800
----------------------------
Class T 15,542 14,649
----------------------------
Class Z 16,064 n/a
Growth of a $10,000 investment 03/04/98 - 09/30/05
[CHART]
Class A Class A
shares without shares with Russell 1000
sales charge sales charge Value Index
-------------- ------------- -------------
$10,000 $ 9,425 $10,000
03/05/1998 - 03/31/1998 10,230 9,642 10,565
04/01/1998 - 04/30/1998 10,170 9,585 10,636
05/01/1998 - 05/31/1998 9,760 9,199 10,478
06/01/1998 - 06/30/1998 9,635 9,081 10,612
07/01/1998 - 07/31/1998 9,425 8,883 10,426
08/01/1998 - 08/31/1998 7,864 7,412 8,874
09/01/1998 - 09/30/1998 8,555 8,063 9,384
10/01/1998 - 10/31/1998 9,625 9,071 10,111
11/01/1998 - 11/30/1998 9,835 9,269 10,582
12/01/1998 - 12/31/1998 10,262 9,672 10,942
01/01/1999 - 01/31/1999 10,302 9,710 11,030
02/01/1999 - 02/28/1999 10,072 9,492 10,874
03/01/1999 - 03/31/1999 10,489 9,885 11,099
04/01/1999 - 04/30/1999 11,351 10,698 12,136
05/01/1999 - 05/31/1999 11,431 10,774 12,002
06/01/1999 - 06/30/1999 11,693 11,021 12,350
07/01/1999 - 07/31/1999 11,251 10,604 11,988
08/01/1999 - 08/31/1999 10,759 10,141 11,544
09/01/1999 - 09/30/1999 10,097 9,516 11,141
10/01/1999 - 10/31/1999 9,936 9,365 11,783
11/01/1999 - 11/30/1999 9,885 9,317 11,691
12/01/1999 - 12/31/1999 10,266 9,676 11,747
01/01/2000 - 01/31/2000 9,876 9,308 11,364
02/01/2000 - 02/29/2000 9,704 9,146 10,519
03/01/2000 - 03/31/2000 11,088 10,450 11,803
04/01/2000 - 04/30/2000 11,191 10,548 11,666
05/01/2000 - 05/31/2000 11,409 10,753 11,788
06/01/2000 - 06/30/2000 10,965 10,335 11,250
07/01/2000 - 07/31/2000 10,839 10,216 11,390
08/01/2000 - 08/31/2000 11,460 10,801 12,024
09/01/2000 - 09/30/2000 11,481 10,821 12,134
10/01/2000 - 10/31/2000 12,033 11,341 12,433
11/01/2000 - 11/30/2000 11,665 10,994 11,971
12/01/2000 - 12/31/2000 12,549 11,828 12,571
01/01/2001 - 01/31/2001 13,644 12,859 12,619
02/01/2001 - 02/28/2001 13,227 12,467 12,268
03/01/2001 - 03/31/2001 12,856 12,117 11,835
04/01/2001 - 04/30/2001 13,677 12,891 12,415
05/01/2001 - 05/31/2001 13,856 13,060 12,694
06/01/2001 - 06/30/2001 13,565 12,785 12,413
07/01/2001 - 07/31/2001 13,530 12,752 12,386
08/01/2001 - 08/31/2001 12,804 12,067 11,890
09/01/2001 - 09/30/2001 11,590 10,923 11,053
10/01/2001 - 10/31/2001 11,935 11,249 10,958
11/01/2001 - 11/30/2001 12,971 12,225 11,594
12/01/2001 - 12/31/2001 13,555 12,775 11,868
01/01/2002 - 01/31/2002 13,135 12,379 11,777
02/01/2002 - 02/28/2002 13,160 12,403 11,795
03/01/2002 - 03/31/2002 13,737 12,947 12,353
04/01/2002 - 04/30/2002 13,502 12,726 11,930
05/01/2002 - 05/31/2002 13,317 12,552 11,989
06/01/2002 - 06/30/2002 12,168 11,468 11,301
07/01/2002 - 07/31/2002 11,081 10,444 10,250
08/01/2002 - 08/31/2002 11,218 10,573 10,328
09/01/2002 - 09/30/2002 9,759 9,198 9,180
10/01/2002 - 10/31/2002 10,564 9,956 9,860
11/01/2002 - 11/30/2002 11,237 10,590 10,481
12/01/2002 - 12/31/2002 10,759 10,140 10,026
01/01/2003 - 01/31/2003 10,449 9,848 9,783
02/01/2003 - 02/28/2003 9,879 9,311 9,522
03/01/2003 - 03/31/2003 9,882 9,313 9,538
04/01/2003 - 04/30/2003 10,616 10,005 10,378
05/01/2003 - 05/31/2003 11,449 10,791 11,048
06/01/2003 - 06/30/2003 11,700 11,027 11,186
07/01/2003 - 07/31/2003 11,612 10,944 11,353
08/01/2003 - 08/31/2003 11,775 11,098 11,530
09/01/2003 - 09/30/2003 11,611 10,943 11,417
10/01/2003 - 10/31/2003 12,037 11,345 12,116
11/01/2003 - 11/30/2003 12,125 11,428 12,281
12/01/2003 - 12/31/2003 13,028 12,279 13,037
01/01/2004 - 01/31/2004 13,179 12,422 13,266
02/01/2004 - 02/29/2004 13,469 12,695 13,550
03/01/2004 - 03/31/2004 13,383 12,614 13,431
04/01/2004 - 04/30/2004 13,130 12,375 13,103
05/01/2004 - 05/31/2004 13,155 12,399 13,237
06/01/2004 - 06/30/2004 13,453 12,679 13,549
07/01/2004 - 07/31/2004 13,338 12,571 13,358
08/01/2004 - 08/31/2004 13,554 12,775 13,548
09/01/2004 - 09/30/2004 13,771 12,979 13,758
10/01/2004 - 10/31/2004 13,873 13,075 13,986
11/01/2004 - 11/30/2004 14,485 13,652 14,694
12/01/2004 - 12/31/2004 14,927 14,068 15,186
01/01/2005 - 01/31/2005 14,697 13,852 14,916
02/01/2005 - 02/28/2005 15,221 14,346 15,410
03/01/2005 - 03/31/2005 14,999 14,137 15,199
04/01/2005 - 04/30/2005 14,896 14,039 14,927
05/01/2005 - 05/31/2005 15,127 14,257 15,286
06/01/2005 - 06/30/2005 15,157 14,285 15,453
07/01/2005 - 07/31/2005 15,480 14,590 15,900
08/01/2005 - 08/31/2005 15,376 14,492 15,831
09/01/2005 - 09/30/2005 15,570 14,675 16,052
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A shares of Columbia Dividend Income Fund during the stated 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, 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.
Index performance is from March 4, 1998.
Average annual total return as of 09/30/05 (%)
Share class A B C G T Z
- ---------------------------------------------------------------------------------------
Inception 11/25/02 11/25/02 11/25/02 03/04/98 03/04/98 03/04/98
- ---------------------------------------------------------------------------------------
Sales charge without with without with without with without with without with without
- ---------------------------------------------------------------------------------------
1-year 13.10 6.59 12.23 7.23 12.24 11.24 12.30 7.30 13.04 6.53 13.38
- ---------------------------------------------------------------------------------------
5-year 6.28 5.03 5.46 5.14 5.44 5.44 5.45 4.96 6.24 4.99 6.69
- ---------------------------------------------------------------------------------------
Life 6.02 5.19 5.32 5.32 5.31 5.31 5.31 5.31 5.99 5.17 6.46
- ---------------------------------------------------------------------------------------
THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A AND T SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF
5.00% FOR CLASS B AND G 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. PERFORMANCE FOR
DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND
FEES ASSOCIATED WITH EACH CLASS.
Class A, class B and class C are newer classes of shares. Their performance
information includes returns of the fund's class T shares (for class A) and
class G shares (for class B and class C) for periods prior to their inception.
The returns shown for class T and G shares include the returns of Retail A
shares (for class T) and Retail B shares (for class G) of the Galaxy fund for
periods prior to November 25, 2002, the date on which class A, B and C shares
were initially offered by the fund and the date the Galaxy fund merged into the
existing fund. The returns have not been restated to reflect any differences in
expenses between the predecessor shares and the newer classes of shares. If
differences in expenses had been reflected, the returns shown for periods prior
to the inception of the newer classes of shares would have been lower. The
returns for class G and class T shares include the returns of Retail A shares
(for class T shares) and Retail B shares (for class G shares) of the Galaxy
fund for periods prior to November 25, 2002, the date on which class T and
class G shares were initially offered by the fund.
Retail A shares and Retail B shares of the Galaxy fund were initially offered
on March 4, 1998. The returns for class Z shares include returns of Trust
shares of the Galaxy fund for periods prior to November 25, 2002, the date on
which class Z shares were initially offered by the fund. Trust shares were
initially offered by the Galaxy fund on March 4, 1998.
1
FUND PROFILE
-----------------------------
Columbia Dividend 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 10 holdings as of 09/30/05 (%)
Exxon Mobil 4.5
--------------------
General Electric 3.8
--------------------
Citigroup 3.3
--------------------
Pfizer 3.2
--------------------
GlaxoSmithKline 2.2
--------------------
Altria Group 2.1
--------------------
ChevronTexaco 2.1
--------------------
BP 2.0
--------------------
Hewlett-Packard 2.0
--------------------
Lincoln National 1.8
--------------------
Sectors as of 09/30/05 (%)
Financials 31.8
-------------------------------
Energy 12.1
-------------------------------
Health care 10.2
-------------------------------
Industrials 9.7
-------------------------------
Consumer staples 9.4
-------------------------------
Information technology 7.4
-------------------------------
Consumer discretionary 5.7
-------------------------------
Telecommunication services 5.2
-------------------------------
Utilities 4.9
-------------------------------
Materials 3.8
-------------------------------
Portfolio holdings are calculated as a percentage of net assets. Sector
breakdown is calculated as a percentage of total investments excluding
short-term investments.
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.
Summary
.. For the 12-month period ended September 30, 2005, the fund's class A shares
returned 13.10% without sales charge.
.. A generally favorable environment for value stocks helped the fund, its
benchmark and peer group to a double-digit return for the period.
.. We took a relatively cautious approach to energy and utilities stocks, which
were factors in the fund's shortfall relative to its benchmark, the Russell
1000 Value Index, and the average return of its peer group, the Lipper
Equity Income Funds Category.
.. We increased the fund's dividend by 17.6% over the previous one-year period.
[GRAPHIC]
Class A shares 13.10%
Russell 1000 Value Index 16.69%
Objective
Seeks current income and capital appreciation.
Total Net Assets
$509.4 million
Management style
[GRAPHIC]
2
UNDERSTANDING YOUR EXPENSES
---------------------------------------------------
Columbia Dividend Income Fund
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:
.. 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.
.. 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 ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the 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
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total
return for the period. The amount listed in the "hypothetical" column for each
share class assumes that the return each year is 5% before expenses and
includes the fund's actual expense ratio. You should not use the hypothetical
account values and expenses to estimate either your actual account balance at
the end of the period or the expenses you paid during this reporting period.
04/01/05 - 09/30/05
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
- -------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- -------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1,038.40 1,019.80 5.37 5.32 1.05
- -------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1,034.29 1,016.04 9.18 9.10 1.80
- -------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1,034.39 1,016.04 9.18 9.10 1.80
- -------------------------------------------------------------------------------------------------
Class G 1,000.00 1,000.00 1,034.59 1,016.29 8.93 8.85 1.75
- -------------------------------------------------------------------------------------------------
Class T 1,000.00 1,000.00 1,038.10 1,019.55 5.62 5.57 1.10
- -------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 1,039.61 1,021.06 4.09 4.05 0.80
- -------------------------------------------------------------------------------------------------
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.
Had the Investment Advisor and Transfer Agent not waived or reimbursed a
portion of expenses, total return would have been reduced.
It is important to note that the expense amounts shown in the table are meant
to highlight only ongoing costs of investing in the 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 shares of 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 Dividend Income Fund
The US economy moved ahead at a healthy pace during the 12-month period that
began October 1, 2004 and ended September 30, 2005. Gross domestic product
(GDP) expanded at an annualized rate of 3.8% as job growth helped sustain
consumer spending and rising profits boosted business spending. Employment data
was solid, even in light of Hurricanes Katrina and Rita, which disrupted the
labor market near the end of the period. During the first 11 months of the
period, the economy added an average of 185,000 new jobs each month. In
September, 8,000 jobs were lost as a direct result of the Gulf Coast floods,
and the unemployment rate rose from 4.9% to 5.1%. However, the number of jobs
lost was lower than originally estimated -- and considerably lower than
expected.
Energy prices weighed on economic growth as the period wore on. The first signs
of relief came in September as the price of crude oil retreated from a record
high of $69.81 a barrel. Signs of slower growth cropped up in retail spending.
And, consumer confidence readings dipped in July and fell sharply in September.
The decline was the largest in 25 years, according to the University of
Michigan's monthly survey.
Despite these setbacks, the latest data on the economy suggest that it has
retained momentum. Manufacturing activity remained strong, and business
activity in non-manufacturing industries continued to expand, although the pace
slowed in September.
Despite volatility, stocks moved ahead
The S&P 500 Index -- a broad measure of large company stock market performance
- -- returned 12.25% for this reporting period. The double-digit gain masked
considerable volatility. Early in the period, stocks rallied after the
presidential election then again in response to positive economic news midway
through the period and in the aftermath of two hurricanes. These rallies,
however, alternated with declines linked to higher energy prices, rising
interest rates and weakening consumer confidence. Small- and mid-cap stocks
outperformed large-cap stocks. Value stocks led growth stocks except among
small caps, where growth gained a small advantage over value.
Bonds delivered modest gains
The US bond market delivered positive but modest returns despite steadily
rising short-term interest rates and higher long-term rates in the final months
of the period. Interest rates and bond prices move in opposite directions. The
Lehman Brothers Aggregate Bond Index, a broad measure of the performance of
investment-grade bonds returned 2.80% for the 12-month period. The yield on the
10-year US Treasury note, a bellwether for the bond market, ended the period at
just over 4.3% -- slightly higher than where it started the period. High-yield
bonds led the fixed income markets. The Merrill Lynch US High Yield, Cash Pay
Index returned 6.69%.
Short-term interest rates moved higher
The Federal Reserve Board (the Fed) raised the federal funds rate, a key
short-term rate, from 1.75% to 3.75% during the period. In the wake of
Hurricanes Katrina and Rita, some market observers speculated that the Fed
might curtail its rate hikes. However, Fed Chairman Greenspan indicated that
inflation was a greater concern than the sustainability of economic growth and
we believe that the Fed is likely to continue to raise short-term interest
rates into the first half of 2006.
Summary
For the 12-month period ended September 30, 2005
.. Despite bouts of volatility, the broad stock market generated a double-digit
return for the period. The S&P 500 Index returned 12.25%. As the economy
expanded, small-cap stocks outperformed large-cap stocks, as measured by the
Russell 2000 Index.
[GRAPHIC]
.. 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.
[GRAPHIC]
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
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, and
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.
4
PORTFOLIO MANAGERS' REPORT
----------------------------------------------------
Columbia Dividend Income Fund
For the 12-month period ended September 30, 2005, class A shares of Columbia
Dividend Income Fund returned 13.10% without sales charge. The fund's
benchmark, the Russell 1000 Value Index, returned 16.69% for the same period.
The average return of its peer group, the Lipper Equity Income Funds Category,
was 13.69%./1/ Compared to its benchmark, the fund had less exposure to the
top-performing energy and utility stocks, which held back results.
Energy and utility holdings reduced after strong performance
Growing corporate earnings drove stocks higher during the first half of the
period, but the rally stalled when investors paused to assess the economic
impacts of costly energy and higher interest rates. In this environment, we
decided to cut back on the fund's energy holdings because valuations were high
and yields were declining. This move was a factor in the fund's performance
shortfall relative to the index. However, we believe it was a prudent move,
especially in light of declining oil and gas prices at the end of the period.
An underweight in the strong-performing utilities area also detracted somewhat
from results.
Within the energy sector, Exxon Mobil and ConocoPhillips were solid
contributors. We sold most of the fund's stake in oil services giant
Halliburton following a dramatic price rise and realized profits for the fund.
In the utility sector, TXU and Public Service Enterprise Group also delivered
outstanding performances.
In search of value in health care
As we moved away from energy, we found attractive valuations in health care,
where we doubled the fund's exposure during the period. We emphasized European
drug manufacturers, notably Novartis and GlaxoSmithKline, whose dividend yields
and growth rates appeared attractive; both stocks made positive contributions
to the fund's return. Health insurer Aetna rose sharply. Pfizer and Merck & Co.
were disappointments for the period. However, we maintained our positions
because we believe that current valuations fail to reflect the long-term
potential of both stocks.
We also doubled the fund's technology investments, and this move benefited the
fund's results. Shares of Hewlett-Packard rose as new management sharpened the
company's competitive stance by focusing on costs and core competencies. Cell
phone maker Nokia's operational turnaround pushed its shares higher.
Within the consumer discretionary sector, we did well to avoid auto and media
stocks, which were weak during the period. We took some profits in J.C. Penney
Co. because we believe that future earnings gains may be harder to achieve if
consumer spending growth slows. Within the consumer staples sector, the fund's
position in Altria Group, parent of
/1/Lipper Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives as
those of the fund.
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 09/30/05 ($)
Class A 12.01
-------------
Class B 11.77
-------------
Class C 11.76
-------------
Class G 11.76
-------------
Class T 12.01
-------------
Class Z 12.01
Distributions declared per share 10/01/04 - 09/30/05 ($)
Class A 0.20
------------
Class B 0.11
------------
Class C 0.11
------------
Class G 0.12
------------
Class T 0.19
------------
Class Z 0.23
5
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Kraft Foods and Philip Morris, benefited from reduced litigation costs.
Gillette rose as approval of its acquisition by a leading consumer products
company was approved. However, PepsiCo failed to advance despite the company's
good operating results.
In financials, gains among insurers outweighed declines in banks and
brokerages. Chubb and Travelers Property Casualty recorded sharp gains but
JPMorgan Chase fell as integration of its BankOne acquisition progressed slowly.
Looking ahead
Over the past year, the US economy expanded despite sharply increased energy
costs and a string of interest-rate hikes. The economic outlook going forward
is less clear, and the key to growth is likely to lie in the hands -- and the
spending habits -- of American consumers. With this environment in mind, we
plan to continue lowering the fund's risk exposure and focusing on companies
with good balance sheets, strong cash flow and the demonstrated potential to
increase their dividends. The strong growth in corporate profits over the past
several years suggests that many companies could have the ability to increase
their dividend payouts. In fact, payout ratios of dividends-to-corporate
earnings have hit an all-time low.
Dividends have historically made a significant contribution to investor
returns. And in the current environment of generally modest returns, we believe
that a fund with an emphasis on dividends can continue to play an important
role in an investor's portfolio. As a result of the change in the fund's
objective regarding dividends, the dividend paid by the fund increased 55% in
fiscal year 2004 and 17.6% in fiscal year 2005.
Scott Davis has co-managed Columbia Dividend Income Fund since November 2001
and has been with the advisor or its predecessors or affiliate organizations
since 1985.
/s/ Scott L. Davis
Richard Dahlberg, CFA, has co-managed the fund since October 2003 and has been
with the advisor or its predecessors or affiliate organizations since September
2003.
/s/ Richard E. Dahlberg
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Value stocks are securities of companies that may have experienced adverse
business or industry developments or may be subject to special risks that have
caused the stocks to be out of favor. If the advisor's assessment of a
company's prospects is wrong, the price of its stock may not approach the value
the advisor has placed on it.
Holdings discussed
in this report as of 09/30/05 (%)
Exxon Mobil 4.5
-----------------------------------
ConocoPhillips 0.8
-----------------------------------
Halliburton 0.3
-----------------------------------
TXU 0.8
-----------------------------------
Public Service Enterprise Group 1.2
-----------------------------------
Novartis 1.6
-----------------------------------
GlaxoSmithKline 2.2
-----------------------------------
Aetna 0.8
-----------------------------------
Pfizer 3.2
-----------------------------------
Merck & Co. 0.5
-----------------------------------
Hewlett-Packard 2.0
-----------------------------------
Nokia 1.2
-----------------------------------
J.C. Penney Co. 1.3
-----------------------------------
Altria Group 2.1
-----------------------------------
Gillette 0.7
-----------------------------------
PepsiCo 0.8
-----------------------------------
Chubb 1.0
-----------------------------------
Travelers Property Casualty 0.6
-----------------------------------
JPMorgan Chase 1.7
Your fund is actively managed and the composition of its portfolio will change
over time. Information provided is calculated as a percentage of net assets.
In the current environment of generally modest returns, we believe that a fund
with an emphasis on dividends can continue to play an important role in an
investor's portfolio.
6
FINANCIAL STATEMENTS
----------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
A guide to understanding your fund's financial statements
---------------------------------------------------------------------------
Investment Portfolio The investment portfolio details all of the fund's holdings and their
market value as of the last day of the reporting period. Portfolio
holdings are organized by type of asset, industry, country or geographic
region (if applicable) to demonstrate areas of concentration and
diversification.
---------------------------------------------------------------------------
Statement of Assets and Liabilities This statement details the fund's assets, liabilities, net assets and
share price for each share class as of the last day of the reporting
period. Net assets are calculated by subtracting all the fund's
liabilities (including any unpaid expenses) from the total of the fund's
investment and non-investment assets. The share price for each class is
calculated by dividing net assets for that class by the number of shares
outstanding in that class as of the last day of the reporting period.
---------------------------------------------------------------------------
Statement of Operations This statement details income earned by the fund and the expenses accrued
by the fund during the reporting period. The Statement of Operations also
shows any net gain or loss the fund realized on the sales of its holdings
during the period, as well as any unrealized gains or losses recognized
over the period. The total of these results represents the fund's net
increase or decrease in net assets from operations.
---------------------------------------------------------------------------
Statement of Changes in Net Assets This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder
transactions (e.g., subscriptions, redemptions and dividend reinvestments)
during the reporting period. The Statement of Changes in Net Assets also
details changes in the number of shares outstanding.
---------------------------------------------------------------------------
Notes to Financial Statements These notes disclose the organizational background of the fund, its
significant accounting policies (including those surrounding security
valuation, income recognition and distributions to shareholders), federal
tax information, fees and compensation paid to affiliates and significant
risks and contingencies.
---------------------------------------------------------------------------
Financial Highlights The financial highlights demonstrate how the fund's net asset value per
share was affected by the fund's operating results. The financial
highlights table also discloses the classes' performance and certain key
ratios (e.g., class expenses and net investment income as a percentage of
average net assets).
7
INVESTMENT PORTFOLIO
----------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Common Stocks - 91.7%
CONSUMER DISCRETIONARY - 5.5% Shares Value ($)
- ------------------------------------ ----------------------------------- --------- ----------
Hotels, Restaurants & Leisure - 1.2% McDonald's Corp. 186,525 6,246,722
Hotels, Restaurants & Leisure Total 6,246,722
----------------------------------- --------- ----------
Media - 1.9% McGraw-Hill Companies, Inc. 56,000 2,690,240
Meredith Corp. 48,000 2,394,720
Time Warner, Inc. 261,000 4,726,710
Media Total 9,811,670
----------------------------------- --------- ----------
Multiline Retail - 1.9% Federated Department Stores, Inc. 38,000 2,541,060
J.C. Penney Co., Inc. 144,500 6,852,190
Multiline Retail Total 9,393,250
----------------------------------- --------- ----------
Specialty Retail - 0.5% Sherwin-Williams Co. 56,000 2,467,920
Specialty Retail Total 2,467,920
----------
CONSUMER DISCRETIONARY TOTAL 27,919,562
CONSUMER STAPLES - 9.2%
- ------------------------------------ ----------------------------------- --------- ----------
Beverages - 2.7% Anheuser-Busch Companies, Inc. 34,000 1,463,360
Diageo PLC, ADR 140,500 8,150,405
PepsiCo, Inc. 74,500 4,224,895
Beverages Total 13,838,660
----------------------------------- --------- ----------
Food Products - 0.9% General Mills, Inc. 50,000 2,410,000
Kraft Foods, Inc., Class A 72,000 2,202,480
Food Products Total 4,612,480
----------------------------------- --------- ----------
Household Products - 1.5% Clorox Co. 44,000 2,443,760
Kimberly-Clark Corp. 86,000 5,119,580
Household Products Total 7,563,340
----------------------------------- --------- ----------
Personal Products - 0.7% Gillette Co. 60,000 3,492,000
Personal Products Total 3,492,000
----------------------------------- --------- ----------
Tobacco - 3.4% Altria Group, Inc. 148,500 10,945,935
Reynolds American, Inc. 44,000 3,652,880
UST, Inc. 60,000 2,511,600
Tobacco Total 17,110,415
----------
CONSUMER STAPLES TOTAL 46,616,895
ENERGY - 11.7%
- ------------------------------------ ----------------------------------- --------- ----------
Energy Equipment & Services - 0.3% Halliburton Co. 20,000 1,370,400
Energy Equipment & Services Total 1,370,400
----------------------------------- --------- ----------
Oil, Gas & Consumable Fuels - 11.4% BP PLC, ADR 146,500 10,379,525
ChevronTexaco Corp. 164,500 10,648,085
ConocoPhillips 60,000 4,194,600
Exxon Mobil Corp. 359,000 22,810,860
Kinder Morgan, Inc. 58,000 5,577,280
Royal Dutch Shell PLC, Class A, ADR 72,500 4,758,900
Oil, Gas & Consumable Fuels Total 58,369,250
----------
ENERGY TOTAL 59,739,650
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Common Stocks - (continued)
FINANCIALS - 26.2% Shares Value ($)
- --------------------------------------- ------------------------------------ ------- -----------
Capital Markets - 3.4% Bank of New York Co., Inc. 119,500 3,514,495
Federated Investors, Inc., Class B 240,000 7,975,200
Morgan Stanley 102,500 5,528,850
Capital Markets Total 17,018,545
------------------------------------ ------- -----------
Commercial Banks - 5.5% National City Corp. 159,650 5,338,696
PNC Financial Services Group, Inc. 42,250 2,451,345
U.S. Bancorp 263,000 7,385,040
Wachovia Corp. 150,500 7,162,295
Wells Fargo & Co. 97,500 5,710,575
Commercial Banks Total 28,047,951
------------------------------------ ------- -----------
Consumer Finance - 0.8% MBNA Corp. 162,000 3,991,680
Consumer Finance Total 3,991,680
------------------------------------ ------- -----------
Diversified Financial Services - 5.0% Citigroup, Inc. 371,000 16,887,920
JPMorgan Chase & Co. 254,000 8,618,220
Diversified Financial Services Total 25,506,140
------------------------------------ ------- -----------
Insurance - 8.2% Allstate Corp. 50,000 2,764,500
Arthur J. Gallagher & Co. 201,000 5,790,810
Chubb Corp. 55,000 4,925,250
Lincoln National Corp. 175,500 9,129,510
MBIA, Inc. 85,000 5,152,700
St. Paul Travelers Companies, Inc. 136,500 6,124,755
UnumProvident Corp. 255,000 5,227,500
Willis Group Holdings Ltd. 72,500 2,722,375
Insurance Total 41,837,400
------------------------------------ ------- -----------
Real Estate - 2.4% Archstone-Smith Trust, REIT 45,000 1,794,150
AvalonBay Communities, Inc., REIT 11,000 942,700
Equity Office Properties Trust, REIT 64,000 2,093,440
Kimco Realty Corp., REIT 72,000 2,262,240
New Plan Excel Realty Trust, REIT 183,000 4,199,850
Vornado Realty Trust, REIT 10,500 909,510
Real Estate Total 12,201,890
------------------------------------ ------- -----------
Thrifts & Mortgage Finance - 0.9% Freddie Mac 84,500 4,770,870
Thrifts & Mortgage Finance Total 4,770,870
-----------
FINANCIALS TOTAL 133,374,476
HEALTH CARE - 9.8%
- --------------------------------------- ------------------------------------ ------- -----------
Health Care Providers & Services - 0.8% Aetna, Inc. 46,000 3,962,440
Health Care Providers & Services Total 3,962,440
------------------------------------ ------- -----------
Pharmaceuticals - 9.0% Abbott Laboratories 130,500 5,533,200
Bristol-Myers Squibb Co. 112,000 2,694,720
GlaxoSmithKline PLC, ADR 216,000 11,076,480
Merck & Co., Inc. 88,500 2,408,085
Novartis AG, ADR 155,500 7,930,500
Pfizer, Inc. 662,000 16,530,140
Pharmaceuticals Total 46,173,125
-----------
HEALTH CARE TOTAL 50,135,565
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Common Stocks - (continued)
INDUSTRIALS - 9.4% Shares Value ($)
- --------------------------------------------- ------------------------------------------------- ------- ----------
Aerospace & Defense - 1.7% Boeing Co. 60,000 4,077,000
United Technologies Corp. 84,500 4,380,480
Aerospace & Defense Total 8,457,480
------------------------------------------------- ------- ----------
Building Products - 0.9% Masco Corp. 155,500 4,770,740
Building Products Total 4,770,740
------------------------------------------------- ------- ----------
Commercial Services & Supplies - 1.2% Waste Management, Inc. 206,000 5,893,660
Commercial Services & Supplies Total 5,893,660
------------------------------------------------- ------- ----------
Industrial Conglomerates - 4.8% General Electric Co. 582,000 19,595,940
Textron, Inc. 68,500 4,912,820
Industrial Conglomerates Total 24,508,760
------------------------------------------------- ------- ----------
Machinery - 0.8% Deere & Co. 66,500 4,069,800
Machinery Total 4,069,800
----------
INDUSTRIALS TOTAL 47,700,440
INFORMATION TECHNOLOGY - 7.1%
- --------------------------------------------- ------------------------------------------------- ------- ----------
Communications Equipment - 1.2% Nokia Oyj, ADR 351,500 5,943,865
Communications Equipment Total 5,943,865
------------------------------------------------- ------- ----------
Computers & Peripherals - 2.8% Diebold, Inc. 117,194 4,038,505
Hewlett-Packard Co. 348,000 10,161,600
Computers & Peripherals Total 14,200,105
------------------------------------------------- ------- ----------
IT Services - 0.9% Automatic Data Processing, Inc. 110,500 4,755,920
IT Services Total 4,755,920
------------------------------------------------- ------- ----------
Semiconductors & Intel Corp. 191,000 4,708,150
Semiconductor Equipment - 2.2% KLA-Tencor Corp. 36,000 1,755,360
Taiwan Semiconductor Manufacturing Co., Ltd., ADR 602,500 4,952,550
Semiconductors & Semiconductor Equipment Total 11,416,060
----------
INFORMATION TECHNOLOGY TOTAL 36,315,950
MATERIALS - 3.1%
- --------------------------------------------- ------------------------------------------------- ------- ----------
Chemicals - 2.3% Dow Chemical Co. 115,000 4,792,050
E.I. du Pont de Nemours & Co. 106,000 4,152,020
Lyondell Chemical Co. 96,000 2,747,520
Chemicals Total 11,691,590
------------------------------------------------- ------- ----------
Paper & Forest Products - 0.8% Weyerhaeuser Co. 56,000 3,850,000
Paper & Forest Products Total 3,850,000
----------
MATERIALS TOTAL 15,541,590
TELECOMMUNICATION SERVICES - 5.0%
- --------------------------------------------- ------------------------------------------------- ------- ----------
Diversified Telecommunication Services - 4.2% BellSouth Corp. 263,000 6,916,900
SBC Communications, Inc. 297,000 7,119,090
Verizon Communications, Inc. 231,000 7,551,390
Diversified Telecommunication Services Total 21,587,380
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Common Stocks - (continued)
TELECOMMUNICATION SERVICES - (continued) Shares Value ($)
- ------------------------------------------ ------------------------------------------------ ------- -----------
Wireless Telecommunication Services - 0.8% Vodafone Group PLC, ADR 158,000 4,103,260
Wireless Telecommunication Services Total 4,103,260
-----------
TELECOMMUNICATION SERVICES TOTAL 25,690,640
UTILITIES - 4.7%
- ------------------------------------------ ------------------------------------------------ ------- -----------
Electric Utilities - 0.7% Southern Co. 92,000 3,289,920
Electric Utilities Total 3,289,920
------------------------------------------------ ------- -----------
Independent Power TXU Corp. 38,000 4,289,440
Producers & Energy Traders - 0.8% Independent Power Producers & Energy Traders Total 4,289,440
------------------------------------------------ ------- -----------
Multi-Utilities - 3.2% Consolidated Edison, Inc. 20,000 971,000
Dominion Resources, Inc. 70,500 6,072,870
Public Service Enterprise Group, Inc. 96,000 6,178,560
Sempra Energy 70,000 3,294,200
Multi-Utilities Total 16,516,630
-----------
UTILITIES TOTAL 24,095,990
Total Common Stocks
(cost of $423,628,468) 467,130,758
Convertible Preferred Stocks - 5.3%
FINANCIALS - 4.6%
- ------------------------------------------ ------------------------------------------------ ------- -----------
Diversified Financial Services - 0.5% Merrill Lynch & Co., Inc., 6.750% 74,500 2,812,375
Diversified Financial Services Total 2,812,375
------------------------------------------------ ------- -----------
Insurance - 4.1% Hartford Financial Services Group, Inc., 7.000% 44,000 3,086,600
Travelers Property Casualty Corp., 4.500% 132,500 3,187,950
XL Capital Ltd., 6.500% 263,000 6,004,290
UnumProvident Corp., 8.250% 144,500 5,720,466
Genworth Financial, Inc., 6.000% 74,000 2,656,600
Insurance Total 20,655,906
-----------
FINANCIALS TOTAL 23,468,281
MATERIALS - 0.7%
- ------------------------------------------ ------------------------------------------------ ------- -----------
Metals & Mining - 0.7% Freeport-McMoRan Copper & Gold, Inc., 5.500% (a) 2,425 2,678,412
Freeport-McMoRan Copper & Gold, Inc., 5.500% 575 635,088
Metals & Mining Total 3,313,500
-----------
MATERIALS TOTAL 3,313,500
Total Convertible Preferred Stocks
(cost of $25,287,559) 26,781,781
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Short-Term Obligation - 3.0% Par ($) Value ($)
- ---------------------------- -------------------------------------------------- ---------- -----------
Repurchase agreement with State Street Bank &
Trust Co., dated 09/30/05, due 10/03/05 at 3.150%,
collateralized by a U.S. Treasury Bond maturing
08/15/19, market value of $15,594,159 (repurchase
proceeds $15,287,012) 15,283,000 15,283,000
Total Short-Term Obligation
(cost of $15,283,000) 15,283,000
Total Investments - 100.0%
(cost of $464,199,027) (b) 509,195,539
Other Assets & Liabilities, Net - 0.0% 221,037
Net Assets - 100.0% 509,416,576
NOTES TO INVESTMENT PORTFOLIO:
(a)Security exempt from registration pursuant
to Rule 144A under the Securities Act of
1933. This security may be resold in
transactions exempt from registration,
normally to qualified institutional buyers.
At September 30, 2005, this security, which
is not illiquid, amounted to $2,678,412,
which represents 0.5% of net assets.
(b)Cost for federal income tax purposes is
$464,845,505.
At September 30, 2005, the Fund held
investments in the following sectors:
SECTOR (UNAUDITED) % OF NET ASSETS
-----------------------------------------------
Financials 30.8%
Energy 11.7
Health Care 9.8
Industrials 9.4
Consumer Staples 9.2
Information Technology 7.1
Consumer Discretionary 5.5
Telecommunication Services 5.0
Utilities 4.7
Materials 3.8
Short-Term Obligation 3.0
Other Assets & Liabilities, Net 0.0
-----
100.0%
-----
ACRONYM NAME
------------------------------------
ADR American Depositary Receipt
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
12
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
($)
- ------------------------- ------------------------------------------------- -----------
Assets Investments, at cost 464,199,027
-----------
Investments, at value 509,195,539
Cash 72,432
Receivable for:
Fund shares sold 2,179,186
Interest 1,337
Dividends 1,163,919
Foreign tax reclaims 3,157
Expense reimbursement due from Investment Advisor 73,989
Deferred Trustees' compensation plan 22,691
-----------
Total Assets 512,712,250
------------------------------------------------- -----------
Liabilities Payable for:
Investments purchased 74,200
Fund shares repurchased 1,041,499
Distributions 1,700,815
Investment advisory fee 283,366
Administration fee 26,528
Transfer agent fee 36,685
Pricing and bookkeeping fees 7,757
Trustees' fees 1,000
Custody fee 1,900
Distribution and service fees 49,719
Chief compliance officer expenses and fees 1,325
Deferred Trustees' fees 22,691
Other liabilities 48,189
-----------
Total Liabilities 3,295,674
Net Assets 509,416,576
------------------------------------------------- -----------
Composition of Net Assets Paid-in capital 489,482,202
Undistributed net investment income 691,668
Accumulated net realized loss (25,753,806)
Net unrealized appreciation on investments 44,996,512
-----------
Net Assets 509,416,576
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
($)
------- -------------------------------------------------------- -----------
Class A Net assets 27,533,814
Shares outstanding 2,291,918
Net asset value per share 12.01(a)
Maximum offering price per share ($12.01/0.9425) 12.74(b)
-------------------------------------------------------- -----------
Class B Net assets 17,359,442
Shares outstanding 1,474,474
Net asset value and offering price per share 11.77(a)
-------------------------------------------------------- -----------
Class C Net assets 3,959,346
Shares outstanding 336,560
Net asset value and offering price per share 11.76(a)
-------------------------------------------------------- -----------
Class G Net assets 3,291,196
Shares outstanding 279,791
Net asset value and offering price per share 11.76(a)
-------------------------------------------------------- -----------
Class T Net assets 99,147,649
Shares outstanding 8,253,636
Net asset value per share 12.01(a)
Maximum offering price per share ($12.01/0.9425) 12.74(b)
-------------------------------------------------------- -----------
Class Z Net assets 358,125,129
Shares outstanding 29,812,803
Net asset value, offering and redemption price per share 12.01
(a)Redemption price per share is equal to net
asset value less any applicable contingent
deferred sales charge.
(b)On sales of $50,000 or more the offering
price is reduced.
See Accompanying Notes to Financial Statements.
14
STATEMENT OF OPERATIONS
-------------------------------------------------------
For the Year Ended September 30, 2005 Columbia Dividend Income Fund
($)
- --------------------------------------- -------------------------------------------------------------------- ----------
Investment Income Dividends 11,310,319
Interest 488,364
----------
Total Investment Income (net of foreign taxes withheld of $97,457) 11,798,683
-------------------------------------------------------------------- ----------
Expenses Investment advisory fee 2,620,258
Administration fee 249,737
Distribution fee:
Class B 101,801
Class C 23,255
Class G 32,558
Service fee:
Class A 45,248
Class B 33,934
Class C 7,747
Class G 15,027
Shareholder service fee - Class T 305,335
Transfer agent fee 444,428
Pricing and bookkeeping fees 60,286
Trustees' fees 12,894
Custody fee 21,045
Chief compliance officer expenses and fees (See Note 4) 4,154
Non-recurring costs (See Note 8) 6,687
Other expenses 248,738
----------
Total Operating Expenses 4,233,132
Fees and expenses waived or reimbursed by Investment Advisor (640,062)
Fees waived by Transfer Agent (36,389)
Non-recurring costs assumed by Investment Advisor (See Note 8) (6,687)
Custody earnings credit (878)
----------
Net Expenses 3,549,116
----------
Net Investment Income 8,249,567
-------------------------------------------------------------------- ----------
Net Realized and Unrealized Gain (Loss) Net realized gain on investments 8,581,689
on Investments Net change in unrealized appreciation (depreciation) on investments 22,296,364
----------
Net Gain 30,878,053
----------
Net Increase in Net Assets from Operations 39,127,620
See Accompanying Notes to Financial Statements.
15
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------
Columbia Dividend Income Fund
Year Ended September 30,
-------------------------
Increase (Decrease) in Net Assets: 2005 ($) 2004 ($)
- -------------------------------------- ---------------------------------------------------- ----------- -----------
Operations Net investment income 8,249,567 3,438,007
Net realized gain (loss) on investments 8,581,689 (2,366,483)
Net change in unrealized appreciation (depreciation)
on investments 22,296,364 32,219,303
----------- -----------
Net Increase from Operations 39,127,620 33,290,827
---------------------------------------------------- ----------- -----------
Distributions Declared to Shareholders From net investment income:
Class A (357,318) (74,299)
Class B (142,463) (40,442)
Class C (32,507) (9,211)
Class G (47,160) (73,058)
Class T (1,662,095) (1,626,505)
Class Z (5,177,094) (1,531,132)
----------- -----------
Total Distributions Declared to Shareholders (7,418,637) (3,354,647)
---------------------------------------------------- ----------- -----------
Share Transactions Class A:
Subscriptions 21,781,034 9,356,105
Distributions reinvested 220,237 66,013
Redemptions (3,073,652) (2,933,744)
----------- -----------
Net Increase 18,927,619 6,488,374
Class B:
Subscriptions 9,590,976 8,241,367
Distributions reinvested 117,335 34,605
Redemptions (2,399,995) (1,056,587)
----------- -----------
Net Increase 7,308,316 7,219,385
Class C:
Subscriptions 2,188,684 2,110,907
Distributions reinvested 21,719 6,757
Redemptions (562,289) (333,548)
----------- -----------
Net Increase 1,648,114 1,784,116
Class G:
Subscriptions 133,105 107,766
Distributions reinvested 44,844 71,095
Redemptions (3,469,119) (5,168,967)
----------- -----------
Net Decrease (3,291,170) (4,990,106)
Class T:
Subscriptions 3,886,648 5,028,502
Distributions reinvested 1,603,116 1,571,011
Redemptions (18,016,121) (17,969,184)
----------- -----------
Net Decrease (12,526,357) (11,369,671)
Class Z:
Subscriptions 280,460,678 32,779,209
Distributions reinvested 625,654 346,486
Redemptions (30,665,757) (28,389,060)
----------- -----------
Net Increase 250,420,575 4,736,635
Net Increase from Share Transactions 262,487,097 3,868,733
----------- -----------
Total Increase in Net Assets 294,196,080 33,804,913
---------------------------------------------------- ----------- -----------
Net Assets Beginning of period 215,220,496 181,415,583
End of period 509,416,576 215,220,496
Undistributed (overdistributed) net investment
income, at end of period 691,668 (9,785)
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Year Ended September 30,
-----------------------
2005 2004
- ----------------- ------------------------------------- ---------- ----------
Changes in Shares Class A:
Subscriptions 1,856,286 891,438
Issued for distributions reinvested 18,682 6,319
Redemptions (260,817) (280,897)
---------- ----------
Net Increase 1,614,151 616,860
Class B:
Subscriptions 842,820 807,527
Issued for distributions reinvested 10,161 3,385
Redemptions (210,560) (103,938)
---------- ----------
Net Increase 642,421 706,974
Class C:
Subscriptions 192,318 207,466
Issued for distributions reinvested 1,883 660
Redemptions (49,277) (33,197)
---------- ----------
Net Increase 144,924 174,929
Class G:
Subscriptions 11,785 10,547
Issued for distributions reinvested 3,910 7,037
Redemptions (302,708) (514,799)
---------- ----------
Net Decrease (287,013) (497,215)
Class T:
Subscriptions 332,237 487,272
Issued for distributions reinvested 136,534 151,877
Redemptions (1,550,861) (1,739,989)
---------- ----------
Net Decrease (1,082,090) (1,100,840)
Class Z:
Subscriptions 24,000,232 3,178,656
Issued for distributions reinvested 53,224 33,472
Redemptions (2,601,629) (2,764,193)
---------- ----------
Net Increase 21,451,827 447,935
See Accompanying Notes to Financial Statements.
17
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Note 1. Organization
Columbia Dividend Income Fund (the "Fund"), a series of Columbia Funds Trust XI
(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 Goals
The Fund seeks current income and capital appreciation.
Fund Shares
The Fund may issue an unlimited number of shares and offers six classes of
shares: Class A, Class B, Class C, Class G, Class T and Class Z. Each share
class has its own sales charge and expense structure.
Class A and Class T shares are subject to a front-end sales charge based on the
amount of initial investment. Class A and Class T shares purchased without an
initial sales charge in accounts aggregating up to $50 million at the time of
purchase are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within twelve months of the time of purchase. Class B and Class G
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 G shares will convert to Class T shares in eight years
after purchase. 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 that 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.
18
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and
dividend income are recorded on the ex-date, except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware
of such, net of non-reclaimable tax withholdings. Awards from class action
litigation are recorded as a reduction of cost if the Fund still owns the
applicable securities on the payment date. If the Fund no longer owns the
applicable securities, the proceeds are recorded as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns
the applicable securities, any distributions received in excess of income are
recorded as realized gains.
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 September 30, 2005, permanent book and tax basis differences
resulting primarily from differing treatments for REIT dividends were
identified and reclassified among the components of the Fund's net assets as
follows:
Undistributed Accumulated
Net Investment Net Realized Paid-In
Income Loss Capital
-------------------------------------
$(129,477) $146,742 $(17,265)
-------------------------------------
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 September 30,
2005 and September 30, 2004 was as follows:
September 30, September 30,
2005 2004
----------------------------------------------------
Distributions paid from:
----------------------------------------------------
Ordinary income* $7,418,637 $3,354,647
----------------------------------------------------
*For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
As of September 30, 2005, the components of distributable earnings on a tax
basis were as follows:
Undistributed Undistributed
Ordinary Long-Term Net Unrealized
Income Capital Gains Appreciation*
------------------------------------------
$2,560,499 $-- $44,350,034
------------------------------------------
*The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to deferral of losses from wash sales, capital loss
carryovers, non-deductible deferred trustees fees and current year income
distributions.
Unrealized appreciation and depreciation at September 30, 2005, based on cost
of investments for federal income tax purposes was:
Unrealized appreciation $ 65,270,573
------------------------------------------
Unrealized depreciation (20,920,539)
------------
Net unrealized appreciation $ 44,350,034
------------------------------------------
19
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
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
-----------------------
2009 $13,541,445
-----------------------
2010 2,470,255
-----------------------
2011 9,095,627
------------
$25,107,327
-----------------------
Of the capital loss carryforwards attributable to the Fund, $13,862,173
($13,541,445 expiring 09/30/09 and $320,728 expiring 09/30/10) remain from the
Fund's merger with Galaxy Equity Income Fund. Utilization of these losses could
be subject to limitations imposed by the Internal Revenue Code.
Capital loss carryforwards of $6,223,285 were utilized during the year ended
September 30, 2005.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia Management Advisors, LLC ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund. On September 30, 2005, Columbia Management Advisors, Inc. changed its
name 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 0.70%
----------------------------------------------
$500 million to $1 billion 0.65%
----------------------------------------------
$1 billion to $1.5 billion 0.60%
----------------------------------------------
$1.5 billion to $3 billion 0.55%
----------------------------------------------
$3 billion to $6 billion 0.53%
----------------------------------------------
Over $6 billion 0.51%
----------------------------------------------
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 $500 million 0.75%
----------------------------------------------
$500 million to $1 billion 0.70%
----------------------------------------------
$1 billion to $1.5 billion 0.65%
----------------------------------------------
$1.5 billion to $2 billion 0.60%
----------------------------------------------
Over $2 billion 0.55%
----------------------------------------------
For the year ended September 30, 2005, the Fund's effective investment advisory
fee rate was 0.70%.
Administration Fee
Columbia provides administrative and other services to the Fund for a monthly
administration fee at the annual rate of 0.067% of the Fund's average daily net
assets.
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
collected to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives an
annual fee based on the average daily net assets of the Fund at the following
annual rates:
Average Daily Net Assets Annual Fee Rate
------------------------------------------
Under $50 million $ 25,000
------------------------------------------
Over $50 million but
less than $200 million $ 35,000
------------------------------------------
Over $200 million but
less than $500 million $ 50,000
------------------------------------------
Over $500 million but
less than $1 billion $ 85,000
------------------------------------------
Over $1 billion $125,000
------------------------------------------
An additional annual fee of $10,000 is charged to the Fund due to its multiple
class structure. The Fund also pays additional fees for pricing services based
on the number of securities held by the Fund.
For the year ended September 30, 2005, the effective pricing and bookkeeping
fee rate for the Fund, inclusive of out-of-pocket expenses, was 0.016%.
20
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
Transfer Agent Fee
Columbia Management 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. On
August 22, 2005, Columbia Funds Services, Inc. changed its name to Columbia
Management Services, Inc. For its services, the Transfer Agent receives a fee,
paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent
also receives reimbursement for certain out-of-pocket expenses.
For the period from October 1, 2004 through September 30, 2005, the Transfer
Agent has voluntarily agreed to waive a portion of its transfer agent fee for
the Fund. This arrangement will be discontinued by the Transfer Agent effective
November 1, 2005. In addition, for the period from September 1, 2005 through
October 31, 2005, the Transfer Agent has voluntarily agreed to waive a portion
of its fees to reflect reduced contractual fees that will be charged to the
Fund effective November 1, 2005. For the year ended September 30, 2005, the
Transfer Agent waived fees of $36,389 for the Fund.
For the year ended September 30, 2005, the Fund's effective transfer agent fee
rate, inclusive of out-of-pocket expenses and net of fee waivers, was 0.11%.
Underwriting Discounts, Service and Distribution Fees
Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of
Columbia, is the principal underwriter of the Fund. On August 22, 2005,
Columbia Funds Distributor, Inc. changed its name to Columbia Management
Distributors, Inc. For the year ended September 30, 2005, the Distributor has
retained net underwriting discounts of $39,016 and $2,608 on sales of the
Fund's Class A and Class T shares. For the same period, the Distributor
received net CDSC fees of $686, $24,838, $2,485 and $9,268 on Class A, Class B,
Class C and Class G share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan"), which allows the payment of a
monthly distribution and service fee to the Distributor at an annual fee rate
as follows:
Distribution Fee Service Fee
---------------------------------------------------------------
Class A Class B Class C Class G Class A Class B Class C Class G
---------------------------------------------------------------
0.10% 0.75% 0.75% 0.65% 0.25% 0.25% 0.25% 0.50%
---------------------------------------------------------------
The Fund does not intend to pay total distribution and service fees in excess
of 0.25% and 0.95% annually for Class A and Class G shares of the Fund,
respectively. Of the 0.50% service fee for Class G shares, 0.25% relates to
shareholder liaison fees and 0.25% relates to administration support fees.
The CDSC and the distribution 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.
Shareholder Services Fees
The Fund has adopted a shareholder services plan that permits it to pay for
certain services provided to Class T and Class Z shareholders by their
financial advisor. Currently, the service plan has not been implemented with
respect to the Fund's Class Z shares. The annual service fee may equal up to
0.50% for Class T shares. The Fund does not intend to pay more than 0.30%
annually for Class T shareholder services fees.
Expense Limits and Fee Reimbursements
Columbia has contractually agreed to waive fees and reimburse the Fund through
December 31, 2006 for certain expenses to the extent that total expenses
(exclusive of distribution and service fees, brokerage commissions, interest,
taxes and extraordinary expenses, if any) exceed 0.80% annually of the Fund's
average daily net assets.
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset
arrangement in an income-producing asset if it had not entered into such an
agreement.
Fees Paid to Officers and Trustees
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. 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
21
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
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 September 30, 2005, the Fund paid $1,803 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 September 30, 2005, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $319,466,360 and
$63,396,024, 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 September 30, 2005, the Fund did
not borrow under this arrangement.
Note 7. Shares of Beneficial Interest
As of September 30, 2005, the Fund had shareholders whose shares were
beneficially owned by participant accounts over which Bank of America and/or
its affiliates had either sole or joint investment discretion. Subscription and
redemption activity of these accounts may have a significant effect on the
operations of the Fund. The number of such accounts and the percentage of
shares of beneficial interest outstanding held therein are as follows:
Number of % of Shares
Accounts Outstanding Held
--------------------------
2 67.8%
--------------------------
Note 8. Disclosure of Significant Risks and Contingencies
Legal Proceedings
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to
collectively as the "Settlements". The Settlements contain substantially the
same terms and conditions as outlined in the agreements in principle which
Columbia Group entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution
consultant (see below). The Columbia Funds have also 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 Funds' independent trustees and not
22
- --------------------------------------------------------------------------------
September 30, 2005 Columbia Dividend Income Fund
unacceptable to the staff of the SEC. At this time, the distribution plan is
still under development. As such, any gain to the Funds 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 alleged 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 Funds and other affiliated
funds participated in securities class action settlements for which the funds
were eligible. Specifically, plaintiffs alleged 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.
Plaintiffs filed a notice of voluntary dismissal of the lawsuit as to all
defendants and all claims without prejudice, which was so-ordered by the judge
on or about November 9, 2005.
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 Funds and 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 (with the
exception of the January 11, 2005 "failure to participate" litigation, which
has been dismissed) are ongoing, however, based on currently available
information, Columbia believes that these lawsuits are without merit, that the
likelihood they will have a material adverse impact on any fund is remote, and
that the lawsuits are not likely to materially affect its ability to provide
investment management services to its clients, including the Funds.
For the year ended September 30, 2005, Columbia has assumed $6,687 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
23
FINANCIAL HIGHLIGHTS
----------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Year Ended September 30, Ended
------------------------- September 30,
Class A Shares 2005 2004(a) 2003(b)(c)
- ---------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 10.80 $ 9.26 $ 9.01
- --------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.25 0.18 0.11
Net realized and unrealized gain on investments 1.16 1.53 0.25
--------- -------- -------------
Total from Investment Operations 1.41 1.71 0.36
- --------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.20) (0.17) (0.11)
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.01 $ 10.80 $ 9.26
Total return (e)(f) 13.10% 18.60% 4.02%(g)
- --------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.05% 1.36% 1.42%(i)
Net investment income (h) 2.11% 1.71% 1.38%(i)
Waiver/reimbursement 0.18% 0.06% --%(i)(j)
Portfolio turnover rate 18% 44% 33%(g)
Net assets, end of period (000's) $27,534 $ 7,319 $ 564
- --------------------------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)Class A shares were initially offered on November 25, 2002. 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 and no
initial sales charge or contingent deferred sales charge.
(f)Had the Investment Advisor and/or any of its affiliates not waived 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.
(j)Rounds to less than 0.01%.
24
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Year Ended September 30, Ended
------------------------- September 30,
Class B Shares 2005 2004(a) 2003(b)(c)
- ---------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 10.59 $ 9.08 $ 8.82
- --------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.16 0.10 0.05
Net realized and unrealized gain on investments 1.13 1.50 0.26
--------- -------- -------------
Total from Investment Operations 1.29 1.60 0.31
- --------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.11) (0.09) (0.05)
- --------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.77 $ 10.59 $ 9.08
Total return (e)(f) 12.23% 17.69% 3.51%(g)
- --------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.80% 2.11% 2.34%(i)
Net investment income (h) 1.36% 0.94% 0.47%(i)
Waiver/reimbursement 0.18% 0.06% --%(i)(j)
Portfolio turnover rate 18% 44% 33%(g)
Net assets, end of period (000's) $17,359 $ 8,808 $ 1,136
- --------------------------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)Class B shares were initially offered on November 25, 2002. 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 and no
contingent deferred sales charge.
(f)Had the Investment Advisor and/or any of its affiliates not waived 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.
(j)Rounds to less than 0.01%.
25
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Year Ended September 30, Ended
------------------------- September 30,
Class C Shares 2005 2004(a) 2003(b)(c)
- ---------------------------------------------------------------------------
Net Asset Value, Beginning of Period $10.58 $ 9.07 $ 8.82
- -------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (d) 0.16 0.10 0.07
Net realized and unrealized gain on investments 1.13 1.50 0.23
--------- --------- -------------
Total from Investment Operations 1.29 1.60 0.30
- -------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.11) (0.09) (0.05)
- -------------------------------------------------------------------------------------------
Net Asset Value, End of Period $11.76 $10.58 $ 9.07
Total return (e)(f) 12.24% 17.70% 3.41%(g)
- -------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.80% 2.11% 2.18%(i)
Net investment income (h) 1.36% 0.94% 0.95%(i)
Waiver/reimbursement 0.18% 0.06% --%(i)(j)
Portfolio turnover rate 18% 44% 33%(g)
Net assets, end of period (000's) $3,959 $2,027 $ 152
- -------------------------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)Class C shares were initially offered on November 25, 2002. 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 and no
contingent deferred sales charge.
(f)Had the Investment Advisor and/or any of its affiliates not waived 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.
(j)Rounds to less than 0.01%.
26
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Ended
Year Ended September 30, September 30, Year Ended October 31,
- --------------------------------------
Class G Shares 2005 2004(a) 2003(b)(c) 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 10.58 $ 9.07 $ 8.36 $ 9.87 $ 10.37 $ 9.84
- ------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) 0.16(d) 0.10(d) 0.05(d) (0.07)(d) (0.06)(d) (0.04)
Net realized and unrealized
gain (loss) on investments 1.14 1.50 0.71 (1.05)(e) (0.11) 1.75
------- ------- ------------- ------- ------- -------
Total from Investment Operations 1.30 1.60 0.76 (1.12) (0.17) 1.71
- ------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment income (0.12) (0.09) (0.05) -- -- --(f)
From net realized gains -- -- -- (0.39) (0.33) (1.18)
------- ------- ------------- ------- ------- -------
Total Distributions Declared
to Shareholders (0.12) (0.09) (0.05) (0.39) (0.33) (1.18)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 11.76 $ 10.58 $ 9.07 $ 8.36 $ 9.87 $ 10.37
Total return (g)(h) 12.30% 17.71% 9.08%(i) (12.16)% (1.71)% 20.33%
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses (j) 1.75% 2.14% 2.21%(k) 2.17% 2.02% 1.95%
Net investment income (loss) (j) 1.38% 0.97% 0.71%(k) (0.72)% (0.53)% (0.35)%
Waiver/reimbursement 0.18% 0.03% --%(k)(l) 0.25% 0.24% 0.40%
Portfolio turnover rate 18% 44% 33%(i) 65%(m) 81% 81%
Net assets, end of
period (000's) $ 3,291 $ 5,995 $ 9,650 $ 2,093 $ 2,286 $ 1,555
- ------------------------------------------------------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)On November 25, 2002, Galaxy Strategic Equity Fund, Retail B shares were
redesignated Liberty Strategic Equity Fund, Class G shares.
(d)Per share data was calculated using average shares outstanding during the
period.
(e)The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing of
repurchases of Fund shares in relation to fluctuating market values of the
investments of the Fund.
(f)Rounds to less than $0.01 per share.
(g)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(h)Had the Investment Advisor and/or any of its affiliates not waived a portion
of expenses, total return would have been reduced.
(i)Not annualized.
(j)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k)Annualized.
(l)Rounds to less than 0.01%.
(m)Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
27
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Ended
Year Ended September 30, September 30,
-
Class T Shares 2005 2004(a) 2003(b)(c)
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 10.80 $ 9.26 $ 8.54
- ------------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.24(d) 0.17(d) 0.11(d)
Net realized and unrealized
gain (loss) on investments 1.16 1.54 0.73
------------------- -------- -------------------
Total from Investment Operations 1.40 1.71 0.84
- ------------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment income (0.19) (0.17) (0.12)
From net realized gains -- -- --
------------------- -------- -------------------
Total Distributions Declared
to Shareholders (0.19) (0.17) (0.12)
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.01 $ 10.80 $ 9.26
Total return (f)(g) 13.04% 18.50% 9.86%(h)
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental
Data:
Expenses (i) 1.10% 1.45% 1.49%(j)
Net investment income (i) 2.04% 1.64% 1.42%(j)
Waiver/reimbursement 0.18% 0.04% 0.01%(j)
Portfolio turnover rate 18% 44% 33%(h)
Net assets, end of
period (000's) $ 99,148 $100,803 $ 96,638
- ------------------------------------------------------------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------
Class T Shares 2002 2001 2000
- --------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 10.02 $ 10.46 $ 9.89
- --------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.01(d) 0.03(d) 0.04
Net realized and unrealized
gain (loss) on investments (1.08)(e) (0.11) 1.75
-------- -------- --------
Total from Investment Operations (1.07) (0.08) 1.79
- --------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment income (0.02) (0.03) (0.04)
From net realized gains (0.39) (0.33) (1.18)
-------- -------- --------
Total Distributions Declared
to Shareholders (0.41) (0.36) (1.22)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.54 $ 10.02 $ 10.46
Total return (f)(g) (11.50)% (0.83)% 21.09%
- --------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental
Data:
Expenses (i) 1.40% 1.24% 1.20%
Net investment income (i) 0.05% 0.25% 0.40%
Waiver/reimbursement 0.29% 0.26% 0.40%
Portfolio turnover rate 65%(k) 81% 81%
Net assets, end of
period (000's) $ 6,578 $ 8,400 $ 8,505
- --------------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)On November 25, 2002, Galaxy Strategic Equity Fund, Retail A shares were
redesignated Liberty Strategic Equity Fund, Class T shares.
(d)Per share data was calculated using average shares outstanding during the
period.
(e)The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing of
repurchases of Fund shares in relation to fluctuating market values of the
investments of the Fund.
(f)Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g)Had the Investment Advisor and/or any of its affiliates not waived a portion
of expenses, total return would have been reduced.
(h)Not annualized.
(i)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j)Annualized.
(k)Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
28
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Selected data for a share outstanding throughout each period is as follows:
Period
Ended
Year Ended September 30, September 30,
-
Class Z Shares 2005 2004(a) 2003(b)(c)
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 10.80 $ 9.26 $ 8.56
- ---------------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.28(d) 0.21(d) 0.15(d)
Net realized and unrealized
gain (loss) on investments 1.16 1.53 0.72
------------------- -------- -------------------
Total from Investment Operations 1.44 1.74 0.87
- ---------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment income (0.23) (0.20) (0.17)
From net realized gains -- -- --
------------------- -------- -------------------
Total Distributions Declared
to Shareholders (0.23) (0.20) (0.17)
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.01 $ 10.80 $ 9.26
Total return (f)(g) 13.38% 18.93% 10.22%(h)
- ---------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses (i) 0.80% 1.10% 1.02%(j)
Net investment income (i) 2.37% 1.98% 1.89%(j)
Waiver/reimbursement 0.18% 0.05% 0.02%(j)
Portfolio turnover rate 18% 44% 33%(h)
Net assets, end of
period (000's) $358,125 $ 90,269 $ 73,276
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended October 31,
--------------------------------------
Class Z Shares 2002 2001 2000
- -------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 10.03 $ 10.48 $ 9.90
- -------------------------------------------------------------------------
Income from Investment Operations:
Net investment income 0.06(d) 0.08(d) 0.08
Net realized and unrealized
gain (loss) on investments (1.07)(e) (0.12) 1.76
-------- -------- --------
Total from Investment Operations (1.01) (0.04) 1.84
- -------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment income (0.07) (0.08) (0.08)
From net realized gains (0.39) (0.33) (1.18)
-------- -------- --------
Total Distributions Declared
to Shareholders (0.46) (0.41) (1.26)
- -------------------------------------------------------------------------
Net Asset Value, End of Period $ 8.56 $ 10.03 $ 10.48
Total return (f)(g) (11.07)% (0.43)% 21.69%
- -------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses (i) 0.82% 0.75% 0.78%
Net investment income (i) 0.63% 0.74% 0.83%
Waiver/reimbursement 0.24% 0.21% 0.20%
Portfolio turnover rate 65%(k) 81% 81%
Net assets, end of
period (000's) $ 19,896 $102,909 $ 93,558
- -------------------------------------------------------------------------
(a)On October 13, 2003, the Liberty Strategic Equity Fund was renamed Columbia
Strategic Equity Fund. On October 27, 2003, the Columbia Strategic Equity
Fund was renamed Columbia Dividend Income Fund.
(b)The Fund changed its fiscal year end from October 31 to September 30.
(c)On November 25, 2002, Galaxy Strategic Equity Fund, Trust shares were
redesignated Liberty Strategic Equity Fund, Class Z shares.
(d)Per share data was calculated using average shares outstanding during the
period.
(e)The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period due to the timing of
repurchases of Fund shares in relation to fluctuating market values of the
investments of the Fund.
(f)Total return at net asset value assuming all distributions reinvested.
(g)Had the Investment Advisor and/or any of its affiliates not waived a portion
of expenses, total return would have been reduced.
(h)Not annualized.
(i)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j)Annualized.
(k)Portfolio turnover rate excludes securities delivered from processing a
redemption-in-kind.
29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-----------------------------
Columbia Dividend Income Fund
To the Trustees of Columbia Funds Trust XI and the Shareholders of Columbia
Dividend 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 Dividend Income Fund (the
"Fund") (a series of Columbia Funds Trust XI) at September 30, 2005, the
results of its operations for the year then ended, and the changes in its net
assets, and its financial highlights for each of the two years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
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). Those standards require that we
plan and perform the audits 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 September 30, 2005 by correspondence with the custodian and
brokers, provides a reasonable basis for our opinion.
The financial statements and financial highlights of the Fund as of September
30, 2003 and for fiscal periods ending on or prior to September 30, 2003 were
audited by other independent accountants whose report dated November 14, 2003
expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 21, 2005
30
UNAUDITED INFORMATION
-----------------------------
Columbia Dividend Income Fund
Federal Income Tax Information
For non-corporate shareholders, 100.00%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period October 1, 2004 to September 30, 2005 may represent
qualified dividend income. Final information will be provided in your 2005
1099-Div Form.
100.00% of the ordinary income distributed by the Fund for the year ended
September 30, 2005, qualifies for the corporate dividends received deduction.
31
TRUSTEES
-----------------------------
Columbia Dividend 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, Year Principal occupation(s) during past five years, Number of portfolios in
first elected or appointed to office/1/ 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
P.O. Box 66100 December, 2002 (formerly President of UAL Loyalty Services (airline) from
Chicago, IL 60666 September, 2001 to December, 2002; Executive Vice President and Chief
Trustee (since 1996) Financial Officer of United Airlines from July, 1999 to September, 2001;
Senior Vice President-Finance from March, 1993 to July, 1999). Oversees
86, Nash Finch Company (food distributor)
---------------------------------------------------------------------------
JANET LANGFORD KELLY (Age 47) Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law firm) since
9534 W. Gull Lake Drive March, 2005; Adjunct Professor of Law, Northwestern University, since
Richland, MI 49083-8530 September, 2004 (formerly Chief Administrative Officer and Senior Vice
Trustee (since 1996) President, Kmart Holding Corporation (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 86, None
---------------------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and Chief Executive
10701 Charleston Drive Officer, U.S. Plywood Corporation (building products manufacturer)).
Vero Beach, FL 32963 Oversees 89(3), None
Trustee (since 1995)
---------------------------------------------------------------------------
CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since January, 1976;
Department of Economics Ford and Louisa Van Voorhis Professor of Political Economy, University of
University of Washington Washington, since September, 1993 (formerly Director, Institute for
Seattle, WA 98195 Economic Research, University of Washington from September, 2001 to June,
Trustee (since 1981) 2003); Adjunct Professor of Statistics, University of Washington, since
September, 1980; Associate Editor, Journal of Money Credit and Banking,
since September, 1993; consultant on econometric and statistical matters.
Oversees 86, None
---------------------------------------------------------------------------
JOHN J. NEUHAUSER (Age 63) Academic Vice President and Dean of Faculties since August, 1999, Boston
84 College Road College (formerly Dean, Boston College School of Management from
Chestnut Hill, MA 02467-3838 September, 1977 to August, 1999). Oversees 89, Saucony, Inc. (athletic
Trustee (since 1985) footwear)
---------------------------------------------------------------------------
/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.
32
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
Name, address and age, Position with funds, Year Principal occupation(s) during past five years, Number of portfolios in
first elected or appointed to office/1/ Columbia 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 86, 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
2208 Tawny Woods Place 1999, College of Business, Boise State University); Chartered Financial
Boise, ID 83706 Analyst. Oversees 86, None
Trustee (since 1998)
---------------------------------------------------------------------------
THOMAS C. THEOBALD (Age 68) Partner and Senior Advisor, Chicago Growth Partners (private equity
8 Sound Shore Drive, investing) since September, 2004 (formerly Managing Director, William
Suite 285 Blair Capital Partners (private equity investing) from September, 1994 to
Greenwich, CT 06830 September, 2004). Oversees 86, Anixter International (network support
Trustee and Chairman equipment distributor); Ventas, Inc. (real estate investment trust); Jones
of the Board/4/ Lang LaSalle (real estate management services) and Ambac Financial Group
(financial guaranty insurance)
---------------------------------------------------------------------------
ANNE-LEE VERVILLE (Age 60) Retired since 1997 (formerly General Manager, Global Education Industry,
359 Stickney Hill Road IBM Corporation (computer and technology) from 1994 to 1997). Oversees 86,
Hopkinton, NH 03229 Chairman of the Board of Directors, Enesco Group, Inc. (designer, importer
Trustee (since 1998) and distributor of giftware and collectibles)
---------------------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 64) Retired since December 2003 (formerly Chairman and Chief Executive
100 S.W. Market Street Officer, The Regence Group (regional health insurer); Chairman and Chief
#1500 Executive Officer, BlueCross BlueShield of Oregon; Certified Public
Portland, OR 97207 Accountant, Arthur Young & Company). Oversees 86, Northwest Natural Gas
Trustee (since 1991) 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
Suite 3204 February, 1999). Oversees 89/3/, Lee Enterprises (print media), WR
New York, NY 10022 Hambrecht + Co. (financial service provider); Reader's Digest
Trustee (since 1994) (publishing); OPENFIELD Solutions (retail 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 3
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.
33
OFFICERS
-----------------------------
Columbia Dividend Income Fund
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.
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 Managing Director of the
One Financial Center Advisor since September, 2005; President of the Columbia Funds, Liberty
Boston, MA 02111 Funds and Stein Roe Funds since October, 2004; President and Chief
President (since 2004) Executive Officer of the 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; Director of FIM Funding,
Inc. since January, 2005; Senior Vice President of Columbia Management
Distributors, Inc. since January, 2005; Director of Columbia Management
Services, Inc. since January, 2005 (formerly Senior Vice President of
Columbia Management from January, 2005 to August, 2005; Senior Vice
President of BACAP Distributors LLC from January, 2005 to July, 2005;
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
One Financial Center Funds, Stein Roe Funds and All-Star Funds since December, 2000; Managing
Boston, MA 02111 Director of the Advisor since September, 2005 (formerly Vice President of
Treasurer (since 2000) Columbia Management from April, 2003 to August, 2005; President of the
Columbia Funds, Liberty Funds 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 56) Senior Vice President and Chief Compliance Officer of the Columbia Funds,
100 Federal Street Liberty Funds, Stein Roe Funds and All-Star Funds since August, 2004;
Boston, MA 02110 Chief Compliance Officer of the Columbia Management Multi-Strategy Hedge
Senior Vice President and Fund, LLC since August; 2004. Chief Compliance Officer of the BACAP
Chief Compliance Officer (since 2004) Alternative Multi-Strategy Hedge Fund LLC since October 2004 (formerly
Partner, Carter, Ledyard & Milburn LLP from January, 2001 to August, 2004;
Counsel, Carter, Ledyard & Milburn LLP from November, 1999 to December,
2000; Vice President and 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
One Financial Center Funds and All-Star Funds since October, 2004; Managing Director of the
Boston, MA 02111 Advisor since September, 2005 (formerly Controller of the Columbia Funds,
Chief Accounting Officer (since 2004) Liberty Funds, Stein Roe Funds and All-Star Funds from May, 2004 to
October, 2004; Assistant Treasurer from June, 2002 to May, 2004; Vice
President, Product Strategy & Development of the Liberty Funds and Stein
Roe Funds from February, 2001 to June, 2002; Assistant Treasurer of the
Liberty Funds, Stein Roe Funds and the All- Star Funds from August, 1999
to February, 2001; 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
One Financial Center All-Star Funds since October, 2004 (formerly Vice President of CDC IXIS
Boston, MA 02111 Asset Management Services, Inc. and Deputy Treasurer of the CDC Nvest
Controller (since 2004) Funds and Loomis Sayles Funds 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
One Financial Center December, 2004 (formerly Of Counsel, Bingham McCutchen from April, 2001 to
Boston, MA 02111 September, 2004; Executive Director and General Counsel, Massachusetts
Secretary (since 2004) Pension Reserves Investment Management Board from September, 1997 to
March, 2001).
---------------------------------------------------------------------------
34
COLUMBIA FUNDS
-----------------------------
Columbia Dividend Income Fund
- ------------------------------ ---------------------------------------------------------------------------
Growth funds Columbia Acorn Fund
Columbia Acorn Select
Columbia Acorn USA
Columbia Growth Stock Fund
Columbia Large Cap Growth Fund
Columbia Marsico 21st Century Fund
Columbia Marsico Focused Equities Fund
Columbia Marsico Growth Fund
Columbia Marsico Mid Cap Growth Fund
Columbia Mid Cap Growth Fund
Columbia Small Cap Growth Fund I
Columbia Small Cap Growth Fund II
Columbia Small Company Equity Fund
Columbia Tax-Managed Growth Fund
---------------------------------------------------------------------------
Core funds Columbia Common Stock Fund
Columbia Large Cap Core Fund
Columbia Small Cap Core Fund
Columbia Young Investor Fund
---------------------------------------------------------------------------
Value funds Columbia Disciplined Value Fund
Columbia Dividend Income Fund
Columbia Large Cap Value Fund
Columbia Mid Cap Value Fund
Columbia Small Cap Value Fund I
Columbia Small Cap Value Fund II
Columbia Strategic Investor
---------------------------------------------------------------------------
Asset Allocation/Hybrid funds Columbia Asset Allocation Fund
Columbia Asset Allocation Fund II
Columbia Balanced Fund
Columbia Liberty Fund
Columbia LifeGoal(TM) Balanced Growth Portfolio
Columbia LifeGoal(TM) Growth Portfolio
Columbia LifeGoal(TM) Income Portfolio
Columbia LifeGoal(TM) Income and Growth Portfolio
Columbia Thermostat Fund
---------------------------------------------------------------------------
Index funds Columbia Large Cap Enhanced Core Fund
Columbia Large Cap Index Fund
Columbia Mid Cap Index Fund
Columbia Small Cap Index Fund
---------------------------------------------------------------------------
Specialty funds Columbia Convertible Securities Fund
Columbia Real Estate Equity Fund
Columbia Technology Fund
Columbia Utilities Fund
---------------------------------------------------------------------------
Global/International funds Columbia Acorn International
Columbia Acorn International Select
Columbia Global Value Fund
Columbia Greater China Fund
Columbia International Stock Fund
Columbia International Value Fund
Columbia Marsico International Opportunities Fund
Columbia Multi-Advisor International Equity Fund
Columbia World Equity Fund
35
- --------------------------------------------------------------------------------
Columbia Dividend Income Fund
- ---------------------- ---------------------------------------------------------------------------
Taxable Bond funds Columbia Conservative High Yield Fund
Columbia Core Bond Fund
Columbia Federal Securities Fund
Columbia High Income Fund
Columbia High Yield Opportunity Fund
Columbia Income Fund
Columbia Intermediate Bond Fund
Columbia Intermediate Core Bond Fund
Columbia Short Term Bond Fund
Columbia Strategic Income Fund
Columbia Total Return Bond
Columbia U.S. Treasury Index Fund
---------------------------------------------------------------------------
Tax-Exempt Bond funds Columbia California Tax-Exempt Fund
Columbia CA Intermediate Municipal Bond Fund
Columbia Connecticut Tax-Exempt Fund
Columbia CT Intermediate Municipal Bond Fund
Columbia FL Intermediate Municipal Bond Fund
Columbia GA Intermediate Municipal Bond Fund
Columbia High Yield Municipal Fund
Columbia Intermediate Municipal Bond Fund
Columbia MA Intermediate Municipal Bond Fund
Columbia Massachusetts Tax-Exempt Fund
Columbia MD Intermediate Municipal Bond Fund
Columbia Municipal Income Fund
Columbia NC Intermediate Municipal Bond Fund
Columbia New York Tax-Exempt Fund
Columbia NJ Intermediate Municipal Bond Fund
Columbia NY Intermediate Municipal Bond Fund
Columbia OR Intermediate Municipal Bond Fund
Columbia RI Intermediate Municipal Bond Fund
Columbia SC Intermediate Municipal Bond Fund
Columbia Short Term Municipal Bond Fund
Columbia Tax-Exempt Fund
Columbia Tax-Exempt Insured Fund
Columbia TX Intermediate Municipal Bond Fund
Columbia VA Intermediate Municipal Bond Fund
---------------------------------------------------------------------------
Money Market funds Columbia Cash Reserves
Columbia CA Tax-Exempt Reserves
Columbia Government Reserves
Columbia Government Plus Reserves
Columbia MA Municipal Reserves
Columbia Money Market Reserves
Columbia Municipal Reserves
Columbia NY Tax-Exempt Reserves
Columbia Prime Reserves
Columbia Tax-Exempt Reserves
Columbia Treasury Reserves
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. and Banc of America Capital
Management, LLC, both SEC registered
investment advisors and wholly owned
subsidiaries of Bank of America, N.A, merged
on September 30, 2005. At that time, the
newly combined advisor changed its name to
Columbia Management Advisors, LLC ("CMA").
CMA will continue to operate as a
SEC-registered investment advisor, wholly
owned subsidiary of Bank of America, N.A.
and part of Columbia Management.
36
IMPORTANT INFORMATION ABOUT THIS REPORT
-----------------------------
Columbia Dividend 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 fund mails 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 Dividend 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 fund and with the most
recent copy of the Columbia Funds Performance Update.
A description of the fund's proxy voting policies and procedures is available
(i) on the fund's website, www.columbiamanagement.com; (ii) on the Securities
and Exchange Commission's website at www.sec.gov, and (iii) without charge,
upon request, by calling 800-368-0346. Information regarding how the fund voted
proxies relating to portfolio securities during the 12-month period ended
June 30 is available from the SEC's website. Information regarding how the fund
voted proxies relating to portfolio securities is also available from the
fund's website.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q
is available on the SEC's website at www.sec.gov and may be reviewed and copied
at the SEC's Public Reference Room in Washington, DC. 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. and Banc of America Capital Management, LLC, both SEC
registered investment advisors and wholly owned subsidiaries of Bank of
America, N.A, merged on September 30, 2005. At that time, the newly combined
advisor changed its name to Columbia Management Advisors, LLC ("CMA"). CMA will
continue to operate as a SEC-registered investment advisor, wholly owned
subsidiary of Bank of America, N.A. and part of Columbia Management.
37
[GRAPHIC APPEARS HERE]
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by eletronic 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 Dividend Income Fund Annual Report, September 30, 2005
Columbia Management(R)
(C)2005 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-42/90889-0905 (11/05) 05/8400
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 nine series of the registrant whose
report to stockholders is included in this annual filing, as well as the three
series of the registrant whose report to stockholders would have been included
in this filing had they not liquidated during the period. Effective March 1,
2004, seven of the series of the registrant included in this filing engaged new
independent accountants. Unless otherwise noted, fees disclosed below represent
fees paid or accrued to the current and predecessor principal accountants while
each was engaged by the registrant.
(a) Aggregate Audit Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2005 and September
30, 2004 are approximately as follows:
2005 2004
$220,300 $253,400
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed by the principal accountant for
professional services rendered during the fiscal years ended September 30, 2005
and September 30, 2004 are approximately as follows:
2005 2004
$69,700 $42,000
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 and agreed-upon
procedures related to fund liquidations.
(c) Aggregate Tax Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2005 and September
30, 2004 are approximately as follows:
2005 2004
$44,300 $32,300
Tax Fees in both fiscal years 2005 and 2004 consist primarily of the review of
annual tax returns and the review of calculations of required shareholder
distributions. Tax fees include amounts for professional services by the
principal accountant for tax compliance, tax advice and tax planning. Fiscal
year 2005 also includes agreed-upon procedures related to fund liquidations and
the review of final tax returns.
(d) Aggregate All Other Fees billed by the principal accountant for professional
services rendered during the fiscal years ended September 30, 2005 and September
30, 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 minimis" 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
September 30, 2005 and September 30, 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 September 30, 2005 and
September 30, 2004 are disclosed in (b) through (d) of this Item.
During the fiscal years ended September 30, 2005 and September 30, 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 September 30, 2005 and
September 30, 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
September 30, 2005 and September 30, 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 XI
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By (Signature and Title) /s/ Christopher L. Wilson
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Christopher L. Wilson, President
Date November 28, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Christopher L. Wilson
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Christopher L. Wilson, President
Date November 28, 2005
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By (Signature and Title) /s/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date November 28, 2005
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