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 811-5696
RIVERSOURCE GLOBAL SERIES, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: October 31
Date of reporting period: October 31, 2010
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA ABSOLUTE
RETURN CURRENCY AND INCOME FUND
(FORMERLY KNOWN AS RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND SEEKS TO PROVIDE SHAREHOLDERS
WITH POSITIVE ABSOLUTE RETURN.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 5
The Fund's Long-term Performance... 10
Fund Expenses Example.............. 12
Portfolio of Investments........... 14
Statement of Assets and
Liabilities...................... 20
Statement of Operations............ 21
Statements of Changes in Net
Assets........................... 22
Financial Highlights............... 24
Notes to Financial Statements...... 30
Report of Independent Registered
Public Accounting Firm........... 45
Federal Income Tax Information..... 47
Board Members and Officers......... 48
Proxy Voting....................... 53
</Table>
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Absolute Return Currency and Income Fund (the Fund) Class A shares
gained 0.71% (excluding sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Citigroup 3-Month U.S. Treasury Bill
Index, which rose 0.12% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 3 YEARS 06/15/06
- ------------------------------------------------------------------
Columbia Absolute Return Currency and
Income Fund Class A (excluding sales
charge) +0.71% +0.09% +2.81%
- ------------------------------------------------------------------
Citigroup 3-month U.S. Treasury Bill
Index (unmanaged) +0.12% +0.90% +2.20%
- ------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 3.00% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The index does not reflect the effects of sales charges, expenses and taxes. It
is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR 3 YEARS INCEPTION
Class A (inception 6/15/06) +0.71% +0.09% +2.81%
- ------------------------------------------------------------------
Class B (inception 6/15/06) +0.00%* -0.64% +2.12%
- ------------------------------------------------------------------
Class C (inception 6/15/06) -0.10% -0.66% +2.10%
- ------------------------------------------------------------------
Class I (inception 6/15/06) +1.10% +0.47% +3.23%
- ------------------------------------------------------------------
Class W (inception 12/1/06) +0.71% +0.03% +2.30%
- ------------------------------------------------------------------
Class Z (inception 9/27/10) N/A N/A -0.88%**
- ------------------------------------------------------------------
With sales charge
Class A (inception 6/15/06) -2.32% -0.92% +2.09%
- ------------------------------------------------------------------
Class B (inception 6/15/06) -5.00% -1.59% +1.70%
- ------------------------------------------------------------------
Class C (inception 6/15/06) -1.10% -0.66% +2.10%
- ------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 3.00%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class W and Class Z shares. Class I is
available to qualifying institutional investors only. Class W shares are offered
through qualifying discretionary accounts. Class Z shares are offered to certain
eligible investors.
*Rounds to less than 0.01%.
**Not annualized.
- --------------------------------------------------------------------------------
4 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
MANAGER COMMENTARY ------------------------------------------------------------
Effective Sept. 27, 2010, RiverSource Absolute Return Currency and Income Fund
was renamed Columbia Absolute Return Currency and Income Fund.
Dear Shareholders,
Columbia Absolute Return Currency and Income Fund (the Fund) Class A shares
gained 0.71% (excluding sales charge) for the 12 months ended Oct. 31, 2010. The
Fund outperformed its benchmark, the Citigroup 3-month U.S. Treasury Bill Index
(Citigroup Index), which rose 0.12% during the same period.
SIGNIFICANT PERFORMANCE FACTORS
We use a two-part investment process to seek to achieve the Fund's investment
objective. The first component consists of investments in primarily high
quality, short-term fixed income securities with minimal interest rate risk.
This component seeks to build a base of consistent income. These short-term
investments are also designated, as necessary, to cover obligations invested in
through the second component of our process, which is based on a proprietary
quantitative currency model.
PORTFOLIO BREAKDOWN(1) (at Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
Asset-Backed 2.9%
- ------------------------------------------------
Commercial Mortgage-Backed 1.6%
- ------------------------------------------------
FDIC-Insured Debt(2) 2.3%
- ------------------------------------------------
Financials 1.3%
- ------------------------------------------------
Foreign Government 1.2%
- ------------------------------------------------
Industrials 2.6%
- ------------------------------------------------
Residential Mortgage-Backed 0.0%*
- ------------------------------------------------
Other(3) 88.1%
- ------------------------------------------------
</Table>
* Rounds to less than 0.1%
(1) Portfolio holdings include industry sectors that can be comprised of
securities in several industries.
Please refer to the section entitled "Portfolio of Investments" for a
complete listing. No single industry exceeded 25% of portfolio assets.
Percentages indicated are based upon total investments. The Fund's
composition is subject to change.
(2) Debt guaranteed under the FDIC's Temporary Liquidity Guarantee Program
(TLGP).
(3) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY (continued) ------------------------------------------------
The model uses various fundamental and technical factors, including current and
historical data, to rank the anticipated value of nine different currencies from
developed countries, relative to the U.S. dollar. Based on these rankings, we
enter into long forward currency contracts for the three most attractive
currencies and enter into short forward currency contracts for the three least
attractive currencies, all relative to the U.S. dollar. The Fund experiences
profits or losses to the extent the values of the currencies appreciate or
depreciate relative to the U.S. dollar.
During the annual period, we were able to generate positive total return from
both the Fund's investment in short-term fixed income securities and our
proprietary quantitative currency model. The Fund's positioning in the
Australian dollar, New Zealand dollar, Norwegian krone, British pound, and
Swedish krona benefited its results for the 12 months ended Oct. 31, 2010. On
the other hand, positioning in the Canadian dollar, Swiss franc, Japanese yen,
and the euro detracted from Fund performance.
QUALITY BREAKDOWN(1) (at Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
AAA rating 8.2%
- ------------------------------------------------
AA rating 1.0%
- ------------------------------------------------
A rating 2.7%
- ------------------------------------------------
Non-investment grade 0.0%*
- ------------------------------------------------
A1/P1/F1 short-term securities 88.1%
- ------------------------------------------------
</Table>
* Rounds to less than 0.1%.
(1) Percentages indicated are based upon total fixed income securities.
Ratings apply to the underlying holdings of the Fund and not the Fund
itself. Whenever possible, the Standard and Poor's rating is used to
determine the credit quality of a security. Standard and Poor's rates the
creditworthiness of corporate bonds, with 15 categories, ranging from AAA
(highest) to D (lowest). Ratings from AA to CCC may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within
the major rating categories. If Standard and Poor's doesn't rate a security,
then Moody's rating is used. Columbia Management Investment Advisers, LLC
(formerly known as RiverSource Investments, LLC) (the Investment Manager),
rates a security using an internal rating system when Moody's doesn't
provide a rating. Rating for 0.1% of the bond portfolio assets were
determined through internal analysis. For short-term securities, A1/P1/F1
represents the rating designation with the highest quality within the
Standard and Poor's, Moody, and Fitch short-term credit rating scales,
respectively.
- --------------------------------------------------------------------------------
6 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
OUR CURRENT INVESTMENT STRATEGY
We run our quantitative model weekly and reset currency positions as needed,
applying the output of this model on a systematic basis. We generally seek
neutral exposure to the U.S. dollar, the base currency. In our view, remaining
neutral to the U.S. dollar as part of our strategy helps control overall
volatility. We also use an externally developed but fully integrated, risk
management system to help us monitor and mitigate market risk. We believe the
Fund is designed to do well in either rising or falling U.S. dollar
environments.
OUR FUTURE STRATEGY
We intend to stay disciplined to our systematic investment strategy. Through the
use of our proprietary quantitative model, which determines the Fund's positions
in forward foreign currency contracts relative to the U.S. dollar, we will
continue to seek an absolute return that is unrelated to general movements in
the U.S. dollar and other types of financial assets. Overall, we will continue
to seek to generate positive total returns from the income produced by the
Fund's investments in short-term debt obligations, plus the gains, or minus the
losses, resulting from the fluctuations in the values of various foreign
currencies relative to the U.S. dollar.
The Fund does not actually take ownership of foreign currencies or sell actual
foreign currencies. Rather, forward currency contracts are used to gain
comparable currency exposure. Because the establishment of the Fund's forward
foreign currency contracts requires little cash outlay, the Fund's assets will
consist primarily of short-term investment grade U.S. dollar-denominated assets
(if unrated, securities will be of comparable
During the annual period, we were able to generate positive total return from
both the Fund's investment in short-term fixed income securities and our
proprietary quantitative currency model.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) ------------------------------------------------
quality, as determined by the investment manager). Currently, a significant
majority of the underlying portfolio is invested in Columbia Short-Term Cash
Fund in an effort to reduce volatility.
Nicolas Pifer, CFA(R)
Portfolio Manager
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
8 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Absolute Return Currency and Income Fund Class A shares
(from 06/15/06 to 10/31/10) as compared to the performance of the Citigroup 3-
month U.S. Treasury Bill Index. In comparing the Fund's Class A shares to this
index, you should take into account the fact that the Fund's performance
reflects a maximum sales charge of 3.00%, while such charges are not reflected
in the performance of the index. Returns for the Fund include the reinvestment
of any distributions paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
SINCE
INCEPTION
1 YEAR 3 YEARS 6/15/06
COLUMBIA ABSOLUTE RETURN AND CURRENCY INCOME FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $9,769 $9,727 $10,949
- ---------------------------------------------------------------------------------
Average annual total return -2.32% -0.92% +2.09%
- ---------------------------------------------------------------------------------
CITIGROUP 3-MONTH U.S. TREASURY BILL INDEX(1)
Cumulative value of $10,000 $10,012 $10,271 $10,980
- ---------------------------------------------------------------------------------
Average annual total return +0.12% +0.90% +2.20%
- ---------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
10 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA ABSOLUTE RETURN CURRENCY
AND INCOME FUND LINE GRAPH)
<Table>
<Caption>
COLUMBIA ABSOLUTE
RETURN CURRENCY
AND INCOME CITIGROUP 3-MONTH
FUND CLASS U.S. TREASURY
A (INCLUDES BILL
SALES CHARGE) INDEX(1)
----------------- -----------------
6/15/06 $ 9,700 $10,000
7/06 9,697 10,060
10/06 9,930 10,186
1/07 10,226 10,314
4/07 10,513 10,441
7/07 10,655 10,569
10/07 10,918 10,690
1/08 10,729 10,788
4/08 10,535 10,848
7/08 10,631 10,891
10/08 10,856 10,937
1/09 10,817 10,952
4/09 10,719 10,958
7/09 10,773 10,962
10/09 10,872 10,966
1/10 10,981 10,969
4/10 10,981 10,971
7/10 11,047 10,975
10/10 10,949 10,980
</Table>
(1) The Citigroup 3-month U.S. Treasury Bill Index, an unmanaged index,
represents the performance of three-month Treasury bills. The index reflects
reinvestment of all distributions and changes in market prices.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 11
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
12 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 997.00 $ 7.47 1.50%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.45 $ 7.54 1.50%
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 993.90 $11.18 2.25%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.71 $11.30 2.25%
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 992.90 $11.18 2.25%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.71 $11.30 2.25%
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 999.00 $ 5.48 1.10%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.45 $ 5.54 1.10%
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $ 997.00 $ 7.62 1.53%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.30 $ 7.70 1.53%
- -------------------------------------------------------------------------------------------
Class Z
- -------------------------------------------------------------------------------------------
Actual(d) $1,000 $ 991.20 $ 1.34 1.54%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.25 $ 7.75 1.54%
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class Z is as of Sept. 27, 2010 (when shares
became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class Z are equal to the annualized expense ratio for the class as
indicated above, multiplied by the average account value over the period,
multiplied by 32/365 (to reflect the number of days in the period).
(c) Based on the actual return for the six months ended Oct. 31, 2010: -0.30%
for Class A, -0.61% for Class B, -0.71% for Class C, -0.10% for Class I and
-0.30% for Class W.
(d) Based on the actual return for the period from Sept. 27, 2010 (when shares
became available) to Oct. 31, 2010 of -0.88% for Class Z.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
BONDS (9.7%)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
SUPRANATIONAL (1.2%)(c)
Inter-American Development Bank
Senior Unsecured
03-16-11 0.492% $2,000,000(g) $2,001,972
- -------------------------------------------------------------------------------------
ASSET-BACKED (2.8%)
Countrywide Home Equity Loan Trust
Series 2005-H Class 2A (FGIC)
12-15-35 0.496 128,746(e,g) 51,371
Northstar Education Finance, Inc.
Series 2007-1 Class A2
01-29-46 0.308 750,000(g) 684,375
SLM Student Loan Trust
Series 2005-5 Class A2
10-25-21 0.368 730,941(g) 728,115
SLM Student Loan Trust
Series 2005-8 Class A2
07-25-22 0.378 982,004(g) 979,900
SLM Student Loan Trust
Series 2006-A Class A2
12-15-20 0.372 971,010(g) 963,006
SLM Student Loan Trust
Series 2006-C Class A2
09-15-20 0.342 711,702(g) 702,137
SLM Student Loan Trust
Series 2007-2 Class A2
07-25-17 0.288 869,606(g) 862,742
---------------
Total 4,971,646
- -------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED (1.7%)(f)
GS Mortgage Securities Corp. II
Series 2007-EOP Class A2
03-06-20 0.383 1,200,000(d,g) 1,149,103
GS Mortgage Securities Corp. II
Series 2007-EOP Class A3
03-06-20 0.433 1,770,000(d,g) 1,669,049
---------------
Total 2,818,152
- -------------------------------------------------------------------------------------
RESIDENTIAL MORTGAGE-BACKED (--%)(f)
Downey Savings & Loan Association Mortgage Loan Trust
CMO Series 2006-AR2 Class 2AB1
11-19-37 0.346 3,070(g) 3,054
- -------------------------------------------------------------------------------------
BANKING (1.2%)
The Royal Bank of Scotland PLC
Government Liquid Guaranteed
05-11-12 1.098 2,000,000(c,d,g) 2,010,680
- -------------------------------------------------------------------------------------
BROKERAGE (0.1%)
Lehman Brothers Holdings, Inc.
Senior Unsecured
10-22-08 0.000 640,000(b,h) 136,000
- -------------------------------------------------------------------------------------
CONSTRUCTION MACHINERY (2.7%)
John Deere Capital Corp.
Senior Unsecured
01-18-11 0.989 4,500,000(g) 4,506,960
- -------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $17,156,833) $16,448,464
- -------------------------------------------------------------------------------------
<Caption>
FDIC-INSURED DEBT (2.4%)(i)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
U.S. AGENCIES
Bank of America Corp.
FDIC Government Guaranty
06-22-12 0.490% $2,000,000(g) $2,008,498
General Electric Capital Corp.
FDIC Government Guaranty
03-11-11 0.373 2,000,000(g) 2,001,558
- -------------------------------------------------------------------------------------
TOTAL FDIC-INSURED DEBT
(Cost: $4,000,000) $4,010,056
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
14 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
MONEY MARKET FUND (88.7%)
SHARES VALUE(a)
Columbia Short-Term
Cash Fund, 0.241% 150,791,858(j) $150,791,858
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $150,791,858) $150,791,858
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $171,948,691)(k) $171,250,378
=====================================================================================
</Table>
INVESTMENTS IN DERIVATIVES
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT OCT. 31, 2010
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
COUNTERPARTY EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- ------------------------------------------------------------------------------------------
HSBC Securities Nov. 10, 2010 16,127,000 16,580,706 $194,431 $--
(USA), Inc. (CHF) (USD)
- ------------------------------------------------------------------------------------------
UBS Securities Nov. 10, 2010 17,617,000 24,096,885 -- (411,846)
(EUR) (USD)
- ------------------------------------------------------------------------------------------
UBS Securities Nov. 10, 2010 186,000 259,727 964 --
(EUR) (USD)
- ------------------------------------------------------------------------------------------
Goldman, Sachs & Nov. 10, 2010 3,345,818,000 40,532,667 -- (1,047,677)
Co. (JPY) (USD)
- ------------------------------------------------------------------------------------------
State Street Bank Nov. 10, 2010 24,742,291 25,674,000 382,150 --
& Trust Company (USD) (AUD)
- ------------------------------------------------------------------------------------------
State Street Bank Nov. 10, 2010 15,908,916 16,023,000 -- (228,894)
& Trust Company (USD) (AUD)
- ------------------------------------------------------------------------------------------
HSBC Securities Nov. 10, 2010 16,469,170 96,065,000 -- (71,758)
(USA), Inc. (USD) (NOK)
- ------------------------------------------------------------------------------------------
Barclays Bank PLC Nov. 10, 2010 24,719,605 163,779,000 -- (210,061)
(USD) (SEK)
- ------------------------------------------------------------------------------------------
Total $577,545 $(1,970,236)
- ------------------------------------------------------------------------------------------
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
AUD -- Australian Dollar
CHF -- Swiss Franc
CMO -- Collateralized Mortgage Obligation
EUR -- European Monetary Unit
JPY -- Japanese Yen
NOK -- Norwegian Krone
SEK -- Swedish Krona
</Table>
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted. At Oct. 31, 2010, the value of foreign securities, excluding short-
term securities, represented 2.36% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At Oct. 31, 2010,
the value of these securities amounted to $4,828,832 or 2.84% of net
assets.
(e) The following abbreviation is used in the portfolio security description to
identify the insurer and/or guarantor of the issue:
<Table>
FGIC -- Financial Guaranty Insurance Company
</Table>
(f) Mortgage-backed securities represent direct or indirect participations in,
or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, or by private
issuers, generally originators and investors in mortgage loans, including
savings associations, mortgage bankers, commercial banks, investment
bankers and special purpose entities. The maturity dates shown represent
the original maturity of the underlying obligation. Actual maturity may
vary based upon prepayment activity on these obligations. Unless otherwise
noted, the coupon rates presented are fixed rates.
(g) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Oct. 31,
2010.
(h) This position is in bankruptcy.
(i) This debt is guaranteed under the FDIC's (Federal Deposit Insurance
Corporation) Temporary Liquidity Guarantee Program (TLGP) and is backed by
the full faith and credit of the United States.
(j) Affiliated Money Market Fund - See Note 7 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(k) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $171,948,691 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $58,603
Unrealized depreciation (756,916)
----------------------------------------------------------
Net unrealized depreciation $(698,313)
----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
16 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in valuations may
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
include, but are not limited to, financial statement analysis, capital account
balances, discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCT. 31, 2010
---------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(B) INPUTS TOTAL
- --------------------------------------------------------------------------------------------
Bonds
Foreign Government
Obligations &
Agencies $-- $2,001,972 $-- $2,001,972
Asset-Backed Securities -- 4,971,646 -- 4,971,646
Commercial Mortgage-
Backed Securities -- 2,818,152 -- 2,818,152
Residential Mortgage-
Backed Securities -- 3,054 -- 3,054
Corporate Debt
Securities -- 6,653,640 -- 6,653,640
- --------------------------------------------------------------------------------------------
Total Bonds -- 16,448,464 -- 16,448,464
- --------------------------------------------------------------------------------------------
Other
FDIC-Insured Debt
Securities -- 4,010,056 -- 4,010,056
Affiliated Money Market
Fund 150,791,858 -- -- 150,791,858
- --------------------------------------------------------------------------------------------
Total Other 150,791,858 4,010,056 -- 154,801,914
- --------------------------------------------------------------------------------------------
Investments in Securities 150,791,858 20,458,520 -- 171,250,378
Derivatives(c)
Assets
Forward Foreign
Currency Exchange
Contracts -- 577,545 -- 577,545
Liabilities
Forward Foreign
Currency Exchange
Contracts -- (1,970,236) -- (1,970,236)
- --------------------------------------------------------------------------------------------
Total $150,791,858 $19,065,829 $-- $169,857,687
- --------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
18 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 19
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $21,156,833) $ 20,458,520
Affiliated money market fund (identified cost $150,791,858) 150,791,858
- --------------------------------------------------------------------------------------
Total investments in securities (identified cost $171,948,691) 171,250,378
Capital shares receivable 274,424
Dividends and accrued interest receivable 39,715
Receivable for investment securities sold 936,846
Unrealized appreciation on forward foreign currency exchange contracts 577,545
- --------------------------------------------------------------------------------------
Total assets 173,078,908
- --------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 584,520
Payable for investment securities purchased 393,385
Unrealized depreciation on forward foreign currency exchange contracts 1,970,236
Accrued investment management services fees 4,157
Accrued distribution fees 1,020
Accrued transfer agency fees 14,312
Accrued administrative services fees 374
Other accrued expenses 91,765
- --------------------------------------------------------------------------------------
Total liabilities 3,059,769
- --------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $170,019,139
- --------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 169,805
Additional paid-in capital 172,248,377
Accumulated net investment loss (8,707)
Accumulated net realized gain (loss) (299,332)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (2,091,004)
- --------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $170,019,139
- --------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $62,208,913 6,219,687 $10.00(1)
Class B $ 1,006,359 102,217 $ 9.85
Class C $ 4,702,587 478,184 $ 9.83
Class I $38,718,422 3,837,044 $10.09
Class W $63,368,675 6,341,968 $ 9.99
Class Z $ 14,183 1,405 $10.09
- -----------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.31. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 3.00%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
20 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Interest $ 186,608
Income distributions from affiliated money market fund 392,201
- ------------------------------------------------------------------------------
Total income 578,809
- ------------------------------------------------------------------------------
Expenses:
Investment management services fees 1,811,957
Distribution fees
Class A 209,776
Class B 13,998
Class C 60,110
Class W 191,732
Transfer agency fees
Class A 130,467
Class B 2,288
Class C 9,534
Class R4 4
Class R5 4
Class W 148,469
Administrative services fees 162,872
Plan administration services fees -- Class R4 21
Compensation of board members 6,058
Custodian fees 4,877
Printing and postage 60,520
Registration fees 72,194
Professional fees 40,340
Other 14,098
- ------------------------------------------------------------------------------
Total expenses 2,939,319
- ------------------------------------------------------------------------------
Investment income (loss) -- net (2,360,510)
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 26,935
Foreign currency transactions 7,249,532
- ------------------------------------------------------------------------------
Net realized gain (loss) on investments 7,276,467
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (2,799,721)
- ------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 4,476,746
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ 2,116,236
- ------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 21
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ (2,360,510) $ (3,979,874)
Net realized gain (loss) on investments 7,276,467 (11,823,260)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies (2,799,721) 9,397,281
- -----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 2,116,236 (6,405,853)
- -----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A -- (3,686)
Class I -- (38,612)
Class R4 -- (1)
Class R5 -- (2)
Net realized gain
Class A -- (1,035,644)
Class B -- (22,568)
Class C -- (55,949)
Class I -- (1,077,400)
Class R4 -- (115)
Class R5 -- (51)
Class W -- (1,582,466)
- -----------------------------------------------------------------------------------------
Total distributions -- (3,816,494)
- -----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 16,677,282 $ 77,249,711
Class B shares 432,110 1,997,878
Class C shares 768,647 4,071,796
Class I shares 14,194,788 22,509,441
Class R4 shares -- 11,804
Class W shares 22,211,948 37,138,223
Class Z shares 14,224 N/A
Reinvestment of distributions at net asset value
Class A shares -- 1,016,629
Class B shares -- 22,416
Class C shares -- 48,467
Class I shares -- 1,115,956
Class R4 shares -- 61
Class W shares -- 1,582,439
Conversions from Class B to Class A
Class A shares 359,706 613,986
Class B shares (359,706) (613,986)
Payments for redemptions
Class A shares (69,908,500) (138,504,444)
Class B shares (1,096,703) (2,582,407)
Class C shares (3,691,116) (5,828,137)
Class I shares (4,817,932) (192,632,580)
Class R4 shares (10,199) (22,927)
Class R5 shares (9,694) --
Class W shares (46,679,746) (251,615,251)
- -----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (71,914,891) (444,420,925)
- -----------------------------------------------------------------------------------------
Total increase (decrease) in net assets (69,798,655) (454,643,272)
Net assets at beginning of year 239,817,794 694,461,066
- -----------------------------------------------------------------------------------------
Net assets at end of year $170,019,139 $ 239,817,794
- -----------------------------------------------------------------------------------------
Accumulated net investment loss/excess of distributions over
net investment income $ (8,707) $ (7,797)
- -----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 23
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A ------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $9.93 $9.97 $10.58 $10.09 $9.98
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.12) (.08) .15 .41 .12
Net gains (losses) (both realized and
unrealized) .19 .09 (.22) .57 .11
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .07 .01 (.07) .98 .23
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.00)(b) (.18) (.39) (.12)
Distributions from realized gains -- (.05) (.36) (.10) --
- ---------------------------------------------------------------------------------------------------------
Total distributions -- (.05) (.54) (.49) (.12)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.00 $9.93 $9.97 $10.58 $10.09
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN .71% .15% (.57%) 9.96%(c) 2.37%
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Gross expenses prior to expense
waiver/reimbursement 1.47% 1.38% 1.39% 1.36% 1.59%(f)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(g) 1.47% 1.38% 1.39% 1.36% 1.37%(f)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.19%) (.83%) 1.50% 3.98% 3.89%(f)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $62 $114 $176 $9 $10
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate --% 16% 39% 36% 12%
- ---------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
24 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $9.85 $9.96 $10.58 $10.09 $9.97
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.19) (.16) .04 .34 .09
Net gains (losses) (both realized and
unrealized) .19 .10 (.18) .59 .12
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .00 (.06) (.14) .93 .21
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (.12) (.34) (.09)
Distributions from realized gains -- (.05) (.36) (.10) --
- ----------------------------------------------------------------------------------------------------------
Total distributions -- (.05) (.48) (.44) (.09)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.85 $9.85 $9.96 $10.58 $10.09
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN .00%(d) (.56%) (1.35%) 9.38%(c) 2.16%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Gross expenses prior to expense
waiver/reimbursement 2.23% 2.14% 2.16% 2.10% 2.38%(f)
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(g) 2.23% 2.14% 2.16% 2.10% 2.16%(f)
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.95%) (1.59%) .38% 3.26% 3.11%(f)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $2 $3 $-- $--
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate --% 16% 39% 36% 12%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 25
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $9.84 $9.95 $10.57 $10.09 $9.97
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.19) (.16) .06 .34 .09
Net gains (losses) (both realized and
unrealized) .18 .10 (.20) .58 .12
- ----------------------------------------------------------------------------------------------------------
Total from investment operations (.01) (.06) (.14) .92 .21
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (.12) (.34) (.09)
Distributions from realized gains -- (.05) (.36) (.10) --
- ----------------------------------------------------------------------------------------------------------
Total distributions -- (.05) (.48) (.44) (.09)
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.83 $9.84 $9.95 $10.57 $10.09
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN (.10%) (.56%) (1.31%) 9.37%(c) 2.16%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Gross expenses prior to expense
waiver/reimbursement 2.22% 2.14% 2.15% 2.12% 2.38%(f)
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(g) 2.22% 2.14% 2.15% 2.12% 2.16%(f)
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.94%) (1.60%) .66% 3.42% 3.11%(f)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $8 $9 $-- $--
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate --% 16% 39% 36% 12%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
26 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I ------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $9.98 $9.98 $10.59 $10.10 $9.98
- ---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.08) (.04) .21 .44 .13
Net gains (losses) (both realized and
unrealized) .19 .10 (.24) .59 .12
- ---------------------------------------------------------------------------------------------------------
Total from investment operations .11 .06 (.03) 1.03 .25
- ---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.01) (.22) (.44) (.13)
Distributions from realized gains -- (.05) (.36) (.10) --
- ---------------------------------------------------------------------------------------------------------
Total distributions -- (.06) (.58) (.54) (.13)
- ---------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.09 $9.98 $9.98 $10.59 $10.10
- ---------------------------------------------------------------------------------------------------------
TOTAL RETURN 1.10% .56% (.25%) 10.49%(c) 2.56%
- ---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Gross expenses prior to expense
waiver/reimbursement 1.07% 1.01% 1.03% 1.07% 1.34%(f)
- ---------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(g) 1.07% 1.01% 1.03% 1.07% 1.12%(f)
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) (.79%) (.40%) 2.10% 4.30% 4.37%(f)
- ---------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $39 $29 $202 $122 $68
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate --% 16% 39% 36% 12%
- ---------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS W ------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(h)
Net asset value, beginning of period $9.92 $9.97 $10.58 $10.13
- ---------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.12) (.08) .11 .36
Net gains (losses) (both realized and
unrealized) .19 .08 (.19) .55
- ---------------------------------------------------------------------------------------------
Total from investment operations .07 .00 (.08) .91
- ---------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- (.17) (.36)
Distributions from realized gains -- (.05) (.36) (.10)
- ---------------------------------------------------------------------------------------------
Total distributions -- (.05) (.53) (.46)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $9.99 $9.92 $9.97 $10.58
- ---------------------------------------------------------------------------------------------
TOTAL RETURN .71% .04% (.66%) 9.21%(c)
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Total expenses 1.51% 1.46% 1.50% 1.54%(f)
- ---------------------------------------------------------------------------------------------
Net investment income (loss) (1.23%) (.86%) 1.09% 3.88%(f)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $63 $87 $304 $--
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate --% 16% 39% 36%
- ---------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
28 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS Z OCT. 31,
PER SHARE DATA 2010(i)
Net asset value, beginning of period $10.18
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and
unrealized) (.08)
- -------------------------------------------------------------
Total from investment operations (.09)
- -------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income --
Distributions from realized gains --
- -------------------------------------------------------------
Total distributions --
- -------------------------------------------------------------
Net asset value, end of period $10.09
- -------------------------------------------------------------
TOTAL RETURN (.88%)
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(e)
Total expenses 1.54%(f)
- -------------------------------------------------------------
Net investment income (loss) (1.20%)(f)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------
Portfolio turnover rate --%
- -------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from June 15, 2006 (when shares became available) to Oct. 31,
2006.
(b) Rounds to less than $0.01 per share.
(c) During the year ended Oct. 31, 2007, Ameriprise Financial reimbursed the
Fund for a loss on a trading error. Had the Fund not received this
reimbursement, total return figures would have been lower by 0.05%.
(d) Rounds to less than 0.01%.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(f) Annualized.
(g) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds).
(h) For the period from Dec. 1, 2006 (when shares became available) to Oct. 31,
2007.
(i) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 29
NOTES TO FINANCIAL STATEMENTS -------------------------------------------------
1. ORGANIZATION
Columbia Absolute Return Currency and Income Fund (formerly known as RiverSource
Absolute Return Currency and Income Fund) (the Fund) is a series of RiverSource
Global Series, Inc. (the Corporation) and is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end
management investment company. The Corporation has 10 billion authorized shares
of capital stock that can be allocated among the separate series as designated
by the Corporation's Board of Directors (the Board).
The Fund offers Class A, Class B, Class C, Class I, Class W and Class Z shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class W shares are offered without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
- - Class Z shares are offered without a front-end sales charge or CDSC to
certain eligible investors. Class Z shares became effective Sept. 27, 2010.
At Aug. 27, 2010, all Class R4 and Class R5 shares were liquidated. The shares
in these classes had consisted solely of seed capital from Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager).
- --------------------------------------------------------------------------------
30 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
At Oct. 31, 2010, the Investment Manager and affiliated funds-of-funds owned
100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 31
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Financial, Inc. (Ameriprise Financial), parent company of the Investment
Manager, as administrator to the Fund, will fair value foreign securities
pursuant to procedures adopted by the Board, including utilizing a third party
pricing service to determine these fair values. These procedures take into
account multiple factors, including movements in the U.S. securities markets, to
determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the NYSE. The fair value of a security is likely
to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all
- --------------------------------------------------------------------------------
32 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared and payable monthly, when
available, are reinvested in additional shares of the Fund at net asset value or
payable in cash. Capital gains, when available, are normally distributed along
with the last income dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk and credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts to shift
investment exposure from one currency to another and to implement a long/short
currency trading strategy that, when combined with underlying U.S. dollar
cash instruments in the Fund, is designed to produce an absolute return profile
with moderate risk.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
- --------------------------------------------------------------------------------
34 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Unrealized Unrealized
appreciation on depreciation on
forward foreign forward foreign
Foreign exchange currency exchange currency exchange
contracts contracts $577,545 contracts $1,970,236
- -------------------------------------------------------------------------------------------
</Table>
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $7,249,532
- --------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $(3,023,337)
- --------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The gross notional amount of contracts outstanding was approximately $163.3
million at Oct. 31, 2010. The monthly average gross notional amount for these
contracts was $197.1 million for the year ended Oct. 31, 2010. The fair value of
such contracts at Oct. 31, 2010 is set forth in the table above.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 0.89% to 0.70% as the Fund's net assets increase. The
management fee for the year ended Oct. 31, 2010 was 0.89% of the Fund's average
daily net assets.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $493.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable to Class W shares. In addition, the Transfer Agent charged an
annual fee per inactive account and received reimbursement from the Fund for
certain out-of-pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's
- --------------------------------------------------------------------------------
36 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
shares maintained in each such omnibus account (other than omnibus accounts for
which American Enterprise Investment Services, Inc. is the broker of record or
accounts where the beneficial shareholder is a customer of Ameriprise Financial
Services, Inc., which are paid a per account fee). The Transfer Agent pays the
fees of BFDS for services as sub-transfer agent and is not entitled to
reimbursement for such fees from the Fund.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.16%
Class B.............................................. 0.16
Class C.............................................. 0.16
Class W.............................................. 0.19
Class Z.............................................. 0.06*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares and a fee at an annual rate of up to 1.00% of the Fund's average
daily net assets attributable to Class B and Class C shares. For Class B and
Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution
expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $58,000 and $19,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of July 31, 2010, and may be recovered from
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $14,395 for Class A, $205 for Class B and $1,540
for Class C for the year ended Oct. 31, 2010.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $0 and $16,507,982, respectively, for the year ended
Oct. 31, 2010. Realized gains and losses are determined on an identified cost
basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
CLASS A
Sold 1,663,071 7,828,875
Converted from Class B(a) 35,650 62,397
Reinvested distributions -- 103,312
Redeemed (6,983,449) (14,115,766)
- ------------------------------------------------------------------
Net increase (decrease) (5,284,728) (6,121,182)
- ------------------------------------------------------------------
CLASS B
Sold 43,555 202,702
Reinvested distributions -- 2,280
Converted to Class A(a) (36,151) (62,780)
Redeemed (110,895) (264,660)
- ------------------------------------------------------------------
Net increase (decrease) (103,491) (122,458)
- ------------------------------------------------------------------
CLASS C
Sold 77,784 414,719
Reinvested distributions -- 4,936
Redeemed (373,130) (597,391)
- ------------------------------------------------------------------
Net increase (decrease) (295,346) (177,736)
- ------------------------------------------------------------------
CLASS I
Sold 1,414,313 2,280,706
Reinvested distributions -- 113,149
Redeemed (476,312) (19,747,663)
- ------------------------------------------------------------------
Net increase (decrease) 938,001 (17,353,808)
- ------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
38 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
CLASS R4
Sold -- 1,202
Reinvested distributions -- 6
Redeemed (1,000) (2,336)
- ------------------------------------------------------------------
Net increase (decrease) (1,000) (1,128)
- ------------------------------------------------------------------
CLASS R5
Redeemed (942) --
- ------------------------------------------------------------------
Net increase (decrease) (942) --
- ------------------------------------------------------------------
CLASS W
Sold 2,221,309 3,773,483
Reinvested distributions -- 160,817
Redeemed (4,647,352) (25,660,216)
- ------------------------------------------------------------------
Net increase (decrease) (2,426,043) (21,725,916)
- ------------------------------------------------------------------
CLASS Z(b)
Sold 1,405 N/A
- ------------------------------------------------------------------
Net increase (decrease) 1,405 N/A
- ------------------------------------------------------------------
</Table>
(a) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
(b) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $49,274,330 and $100,244,235, respectively, for the year
ended Oct. 31, 2010. The income distributions received with respect to the
Fund's investment in Columbia Short-Term Cash Fund can be found in the Statement
of Operations and the Fund's invested balance in Columbia Short-Term Cash Fund
at Oct. 31, 2010, can be found in the Portfolio of Investments.
8. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
managed by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
9. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains were recorded by the
Fund.
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, excess of distributions over net investment income has been
decreased by $2,359,600 resulting in a net reclassification adjustment to
decrease paid-in capital by $2,359,600.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ---------------------------------------------------------------
Ordinary income.............................. $-- $1,060,104
Long-term capital gain....................... -- 2,756,390
</Table>
- --------------------------------------------------------------------------------
40 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income.................... $ --
Undistributed accumulated long-term gain......... $ --
Accumulated realized loss........................ $(1,692,023)
Unrealized appreciation (depreciation)........... $ (707,020)
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$1,692,023 at Oct. 31, 2010, that if not offset by capital gains will expire in
2017. For the year ended Oct. 31, 2010, $4,253,130 of capital loss carry-over
was utilized. It is unlikely the Board will authorize a distribution of any net
realized capital gains until the available capital loss carry-over has been
offset or expires. There is no assurance that the Fund will be able to utilize
all of its capital loss carry-over before it expires.
10. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN CURRENCY RISK
The Fund's exposure to foreign currencies subjects the Fund to constantly
changing exchange rates and the risk that those currencies will decline in value
relative to the U.S. dollar, or, in the case of short positions, that the U.S.
dollar will decline in value relative to the currency being sold forward.
Currency rates in foreign countries may fluctuate significantly over short
periods of time for a number of reasons, including changes in interest rates and
economic or political developments in the U.S. or abroad. As a result, the
Fund's exposure to foreign currencies may reduce the returns of the Fund.
Trading of foreign currencies also includes the risk of clearing and settling
trades which, if prices are volatile, may be difficult.
GEOGRAPHIC CONCENTRATION RISK
The Fund may be particularly susceptible to economic, political or regulatory
events affecting companies and countries within the specific geographic region
in which the Fund focuses its investments. Currency devaluations could occur in
countries that have not yet experienced currency devaluation to date, or could
continue to occur in countries that have already experienced such devaluations.
As a result, the Fund may be more volatile than a more geographically
diversified fund.
COUNTERPARTY RISK
The risk that a counterparty to a financial instrument entered into by the Fund
or held by a special purpose or structured vehicle becomes bankrupt or otherwise
fails to perform its obligations due to financial difficulties. The Fund may
experience significant delays in obtaining any recovery in a bankruptcy or other
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
reorganization proceeding. The Fund may obtain only limited recovery or may
obtain no recovery in such circumstances. The Fund will typically enter into
financial instrument transactions with counterparties whose credit rating is
investment grade, or, if unrated, determined to be of comparable quality by the
Investment Manager.
11. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
12. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to
- --------------------------------------------------------------------------------
42 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
the Eighth Circuit for further consideration in light of the Supreme Court's
decision in Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit
remanded the Gallus case to the District Court for further consideration in
light of the Supreme Court's decision in Jones v. Harris Associates. On Dec. 9,
2010, the District Court reinstated its July 9, 2007 summary judgment order in
favor of the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
are unable to estimate the possible loss or range of loss that may result. An
adverse outcome in one or more of these proceedings could result in adverse
judgments, settlements, fines, penalties or other relief that could have a
material adverse effect on the consolidated financial condition or results of
operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
44 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Absolute Return Currency and Income
Fund (formerly known as RiverSource Absolute Return Currency and Income Fund)
(the Fund) (one of the portfolios constituting the RiverSource Global Series,
Inc.) as of October 31, 2010, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
four years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights of the Fund for the period ended
October 31, 2006, were audited by other auditors whose report dated December 20,
2006, expressed an unqualified opinion on those financial highlights.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 45
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) -----------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Columbia Absolute Return Currency and Income Fund of the RiverSource
Global Series, Inc. at October 31, 2010, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
-s- Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
46 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
Fiscal year ended Oct. 31, 2010
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 47
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
48 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 49
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
50 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 51
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007 -- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002 -- Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND -- 2010 ANNUAL REPORT 53
COLUMBIA ABSOLUTE RETURN CURRENCY AND INCOME FUND
(formerly known as RiverSource Absolute Return Currency and Income Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6502 J (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA
EMERGING MARKETS BOND FUND
(FORMERLY KNOWN AS RIVERSOURCE EMERGING MARKETS BOND FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA EMERGING MARKETS BOND FUND SEEKS TO PROVIDE SHAREHOLDERS WITH HIGH
TOTAL RETURN THROUGH CURRENT INCOME AND, SECONDARILY, THROUGH CAPITAL
APPRECIATION.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 5
The Fund's Long-term Performance... 12
Fund Expenses Example.............. 14
Portfolio of Investments........... 17
Statement of Assets and
Liabilities...................... 25
Statement of Operations............ 27
Statements of Changes in Net
Assets........................... 29
Financial Highlights............... 31
Notes to Financial Statements...... 38
Report of Independent Registered
Public Accounting Firm........... 58
Federal Income Tax Information..... 60
Board Members and Officers......... 61
Proxy Voting....................... 66
</Table>
- --------------------------------------------------------------------------------
2 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Emerging Markets Bond Fund (the Fund) Class A shares gained 20.75%
(excluding sales charge) for the 12 months ended October 31, 2010.
> The Fund outperformed its benchmark, the J.P. Morgan Emerging Markets Bond
Index-Global (J.P. Morgan EMBI-Global), which rose 17.70% for the 12-month
period.
> The Fund also outperformed its peer group, as represented by the Lipper
Emerging Markets Debt Funds Index, which advanced 18.27% for the same period.
ANNUALIZED TOTAL RETURNS (for period ended October 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 3 YEAR 2/16/06
- ------------------------------------------------------------------
Columbia Emerging Markets Bond Fund
Class A (excluding sales charge) +20.75% +10.20% +9.74%
- ------------------------------------------------------------------
J.P. Morgan EMBI-Global (unmanaged) +17.70% +9.95% +9.20%
- ------------------------------------------------------------------
Lipper Emerging Markets Debt Funds
Index (unmanaged) +18.27% +7.70% +8.22%
- ------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCTOBER 31, 2010
SINCE
Without sales charge 1 YEAR 3 YEARS INCEPTION
Class A (inception 2/16/06) +20.75% +10.20% +9.74%
- -----------------------------------------------------------------
Class B (inception 2/16/06) +19.76% +9.34% +8.91%
- -----------------------------------------------------------------
Class C (inception 2/16/06) +19.87% +9.40% +8.91%
- -----------------------------------------------------------------
Class I (inception 2/16/06) +21.19% +10.66% +10.17%
- -----------------------------------------------------------------
Class R4 (inception 2/16/06) +20.75% +10.50% +9.96%
- -----------------------------------------------------------------
Class W (inception 12/1/06) +20.68% +10.21% +10.00%
- -----------------------------------------------------------------
Class Z (inception 9/27/10) N/A N/A +2.68%*
- -----------------------------------------------------------------
With sales charge
Class A (inception 2/16/06) +15.02% +8.43% +8.61%
- -----------------------------------------------------------------
Class B (inception 2/16/06) +14.76% +8.50% +8.60%
- -----------------------------------------------------------------
Class C (inception 2/16/06) +18.87% +9.40% +8.91%
- -----------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R4, Class W and Class Z shares. Class I
and Class R4 are available to qualifying institutional investors only. Class W
shares are offered through qualifying discretionary accounts. Class Z shares are
available to certain eligible investors.
* Not annualized.
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 11.4 years
- --------------------------------------
Effective duration(2) 6.9 years
- --------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
- --------------------------------------------------------------------------------
4 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
MANAGER COMMENTARY -------------------------------------------------------------
Effective September 27, 2010, RiverSource Emerging Markets Bond Fund was renamed
Columbia Emerging Markets Bond Fund.
At October 31, 2010, approximately 33% of the Fund's shares were owned in
aggregate by affiliated funds-of-funds managed by Columbia Management Investment
Advisers, LLC (Columbia Management). As a result of asset allocation decisions
by Columbia Management, it is possible Columbia Emerging Markets Bond Fund may
experience relatively large purchases or redemptions from affiliated funds-of-
funds (see page 30, Class I capital share transactions for related activity
during the most recent fiscal period). Columbia Management seeks to minimize the
impact of these transactions by structuring them over a reasonable period of
time. Columbia Emerging Markets Bond Fund may experience increased expenses as
it buys and sells securities as a result of purchases or redemptions by
affiliated funds-of-funds. For more information on the Fund's expenses, see the
discussions beginning on pages 14 and 47.
Dear Shareholders,
Columbia Emerging Markets Bond Fund (the Fund) Class A shares gained 20.75%
(excluding sales charge) for the 12 months ended October 31, 2010. The Fund
outperformed its benchmark, the J.P. Morgan Emerging Markets Bond Index-Global
(J.P. Morgan EMBI-Global), which rose 17.70%. The Fund also outperformed the
Lipper Emerging Markets Debt Funds Index, representing the Fund's peer group,
which advanced 18.27%, during the same period.
COUNTRY BREAKDOWN(1) (at October 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Argentina 7.1%
- ------------------------------------------------
Brazil 10.7%
- ------------------------------------------------
Cayman Islands 0.6%
- ------------------------------------------------
Colombia 5.6%
- ------------------------------------------------
Croatia 1.0%
- ------------------------------------------------
Dominican Republic 2.7%
- ------------------------------------------------
El Salvador 1.5%
- ------------------------------------------------
Indonesia 12.3%
- ------------------------------------------------
Kazakhstan 2.6%
- ------------------------------------------------
Lithuania 1.1%
- ------------------------------------------------
Mexico 8.9%
- ------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY (continued) -------------------------------------------------
COUNTRY BREAKDOWN(1) (at October 31, 2010) (continued)
- ---------------------------------------------------------------------
<Table>
<Caption>
Netherlands 1.1%
- ------------------------------------------------
Peru 3.6%
- ------------------------------------------------
Philippines 2.8%
- ------------------------------------------------
Qatar 2.2%
- ------------------------------------------------
Russian Federation 12.0%
- ------------------------------------------------
Trinidad and Tobago 1.2%
- ------------------------------------------------
Turkey 7.0%
- ------------------------------------------------
Ukraine 1.3%
- ------------------------------------------------
United Kingdom 1.2%
- ------------------------------------------------
Uruguay 3.1%
- ------------------------------------------------
Venezuela 6.7%
- ------------------------------------------------
Other(2) 3.7%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
SIGNIFICANT PERFORMANCE FACTORS
Emerging market bonds had a strong performance over the last year, but it has
been choppy at times, with some periods of significant volatility. The first
four months of the period began quietly enough, with the J.P.
QUALITY BREAKDOWN(1) (at October 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
AA rating 1.6%
- ------------------------------------------------
A rating 5.5%
- ------------------------------------------------
BBB rating 36.7%
- ------------------------------------------------
BB rating 41.1%
- ------------------------------------------------
B rating 12.4%
- ------------------------------------------------
Non-rated 2.7%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total fixed income securities
(excluding Investments of Cash Collateral Received for Securities on Loan
and Cash & Cash Equivalents).
Ratings apply to the underlying holdings of the Fund and not the Fund itself.
Whenever possible, the Standard and Poor's rating is used to determine the
credit quality of a security. Standard and Poor's rates the creditworthiness of
corporate bonds, with 15 categories, ranging from AAA (highest) to D (lowest).
Ratings from AA to CCC may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within the major rating categories. If
Standard and Poor's doesn't rate a security, then Moody's rating is used.
Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) rates a security using an internal
rating system when Moody's doesn't provide a rating.
- --------------------------------------------------------------------------------
6 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Morgan EMBI-Global trading within a small 1-2% range. Performance picked up
dramatically in February, with index spreads (differential in yields between
emerging market bonds and those of comparable Treasuries) compressing about 80
basis points (a basis point equals 1/100 of a percentage point) over the next
two months and hitting their lowest level of the year on April 15 at 242 basis
points (their lowest level since the onset of the financial crisis).
April and May saw a significant bout of volatility, generated by solvency and
banking system concerns focused on Greece, Ireland, Portugal and Spain (European
Union peripheral countries). In early May, a E110 billion European Union
(EU)/International Monetary Fund (IMF) sponsored rescue package for Greece was
announced, and a companion contingency aid program for the other peripheral
countries (E750 billion European Financial Stability Facility) was created, but
not immediately activated. Equally important, all of these countries announced a
significant acceleration in their fiscal adjustment efforts. This served to
relieve immediate concerns that the panic focused on the EU peripherals would
spread to larger EU countries and create another round of generalized global
financial panic. With the financial rescue, contagion concerns receded and the
focus shifted back to fiscal adjustment policy implementation.
While the EU rescue packages did stabilize near-term default concerns and
reduced contagion, it was a negative confidence shock to the U.S. economy and
U.S. financial markets. U.S. growth, which was generating some upward momentum
in the first half, stalled out in the third quarter and financial markets fell.
This highlighted what we believe is the continued dual speed nature of the
global recovery: cyclically driven, rapid recoveries in emerging markets and
slow, fragile recoveries in developed markets (U.S., EU, Japan), held back by an
overhang of bad assets and bank problems. Emerging Asia and Latin America are
leading the global recovery, enjoying 6-10% growth rates, rapidly closing their
output gaps, and even making moves to tighten monetary policy.
The sub-par nature of the U.S. recovery pushed the Federal Reserve System (the
Fed) to move away from a commitment to keep rates low for the foreseeable
future, to rising speculation about additional moves the Fed might take to
stimulate faster growth. Broader financial markets
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
regained some stability after the April panic, driven by confidence in the EU
support plan, better corporate earnings results, and continued strong emerging
market growth. This environment of better equity performance, low U.S. rates,
and speculation about additional monetary easing created a trend toward a weaker
U.S. dollar and higher commodity prices, which proved to be an ideal environment
for risk assets. These factors helped drive strong performance during the
period, with the J.P. Morgan EMBI-Global rising about 13% during the last five
months of the period.
Exposure to local currencies and rates contributed to the Fund's performance the
most during the annual period, as several emerging market currencies appreciated
against the U.S. dollar. Fund positions in bonds denominated in the Indonesian
rupiah, Uruguayan peso and Colombian peso particularly boosted Fund results.
Further contributing to the Fund's outperformance was the decline in interest
rates in these same markets, which caused local asset prices to rise. Also, the
average yields on these markets' local assets were higher than that of the J.P.
Morgan EMBI-Global, thus boosting the Fund's relative results.
Country and issue selection helped the Fund's performance as well. Investment
overweights in Indonesia, Colombia, Uruguay and Peru and underweight positions
in Brazil and Mexico were especially beneficial.
There were no major detractors from the Fund's performance during the annual
period. Only modestly detracting from results were underweighted allocations to
the bonds of Panama and the Philippines, which outpaced the J.P. Morgan EMBI-
Global during the annual period.
CHANGES TO THE FUND'S PORTFOLIO
We increased the portfolio's exposure to emerging market currencies, as these
currencies benefitted from U.S. dollar weakness and better growth outlooks.
Moreover, emerging market currencies denominated local debt can offer a better
way to gain exposure to favored countries with developed local markets, compared
to U.S. dollar debt which, in many cases, offers limited upside.
- --------------------------------------------------------------------------------
8 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
We also substituted more quasi-sovereign agency debt for sovereign debt and we
maintained only a modest exposure to emerging market corporate bonds. Within the
portfolio's exposure to corporate bonds, we sought to focus holdings on
commodity-oriented issues, such as those issued by oil and metals and mining
companies.
At the end of the period, the Fund had its most significant overweight
allocations to the bond markets of Indonesia, Argentina, Russia and Qatar.
Conversely, the Fund had its largest underweight exposures in the bond markets
of Lebanon, Turkey, Mexico and the Philippines.
OUR FUTURE STRATEGY
Going forward, we believe there continues to be upside potential in emerging
market debt, but returns are likely to be more modest than during the most
recent annual period, given the level of U.S. Treasury yields and the
significant tightening in emerging market spreads since June 2010. Increased
issuance from emerging market governments and corporations anticipated over the
near term may also serve as a brake to the near-term performance of emerging
markets.
We believe, the largest external risks to emerging market bonds are: renewed
concerns about peripheral European countries, questions about the strength of
recoveries in developed markets, imbalances caused by the dual speed nature of
the global recovery, U.S. monetary policy in the midst of very low U.S. Treasury
yields and questions about how abundant global liquidity has boosted the value
of all fixed income assets.
Exposure to local currencies and rates contributed to the Fund's performance
the most during the annual period, as several emerging market currencies
appreciated against the U.S. dollar.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
Emerging markets have had a run of strong performance over the last two years.
Much of this reflects the sector's stronger economic growth and solvency trends
relative to developed markets. Abundant global liquidity and a generally
supportive environment for all fixed income assets has certainly been an
additional performance tailwind. A reversal in this external environment would
be an impediment to near-term performance.
We do not anticipate making any major changes in the Fund's strategy or
portfolio allocations. As always, we continue to monitor several important
factors. Among them are the creditworthiness of each country, the strength of
its economic policies and the soundness of its fundamentals. Using our top-down
investment approach, we intend to continually reevaluate these factors as we
seek to identify individual securities that present attractive value
opportunities.
<Table>
Nicholas Pifer, CFA(R) James Carlen, CFA(R)
Portfolio Manager Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
10 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Emerging Markets Bond Fund Class A shares (from 2/16/06
to 10/31/10) as compared to the performance of the J.P. Morgan Emerging Markets
Bond Index-Global (J.P. Morgan EMBI-Global) and the Lipper Emerging Markets Debt
Funds Index. In comparing the Fund's Class A shares to these indices, you should
take into account the fact that the Fund's performance reflects the maximum
initial sales charge of 4.75%, while such charges are not reflected in the
performance of the indices. Returns for the Fund include the reinvestment of any
distributions paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at October 31, 2010
SINCE
INCEPTION
1 YEAR 3 YEARS 2/16/06
COLUMBIA EMERGING MARKETS BOND FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $11,502 $12,747 $14,747
- ---------------------------------------------------------------------------------
Average annual total return +15.02% +8.43% +8.61%
- ---------------------------------------------------------------------------------
J.P. MORGAN EMBI-GLOBAL(1)
Cumulative value of $10,000 $11,770 $13,291 $15,127
- ---------------------------------------------------------------------------------
Average annual total return +17.70% +9.95% +9.20%
- ---------------------------------------------------------------------------------
LIPPER EMERGING MARKETS DEBT FUNDS INDEX(2)
Cumulative value of $10,000 $11,827 $12,492 $14,497
- ---------------------------------------------------------------------------------
Average annual total return +18.27% +7.70% +8.22%
- ---------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA EMERGING MARKETS BOND
FUND LINE GRAPH)
<Table>
<Caption>
COLUMBIA EMERGING
MARKETS BOND
FUND CLASS LIPPER EMERGING
A (INCLUDES J.P. MORGAN MARKETS DEBT
SALES CHARGE) EMBI-GLOBAL(1) FUNDS INDEX(2)
----------------- -------------- ---------------
2/16/06 $ 9,525 $10,000 $10,000
4/06 9,446 9,908 9,987
7/06 9,507 10,022 10,041
10/06 10,025 10,532 10,564
1/07 10,259 10,704 10,845
4/07 10,761 11,089 11,293
7/07 10,521 10,740 10,938
10/07 11,021 11,382 11,604
1/08 10,975 11,507 11,544
4/08 10,986 11,599 11,570
7/08 10,801 11,516 11,530
10/08 7,887 9,205 8,783
1/09 8,854 10,252 9,153
4/09 9,859 11,074 10,004
7/09 11,149 12,005 11,259
10/09 12,214 12,853 12,256
1/10 12,510 13,077 12,478
4/10 13,277 13,675 13,246
7/10 13,856 14,294 13,649
10/10 14,747 15,127 14,497
</Table>
(1) The J.P. Morgan EMBI-Global, an unmanaged index, is based on U.S. dollar-
denominated debt instruments issued by emerging market sovereign and quasi-
sovereign entities, such as Brady bonds, Eurobonds and loans. The index
reflects reinvestment of all distributions and changes in market prices.
(2) The Lipper Emerging Markets Debt Funds Index includes the 10 largest
emerging markets debt funds tracked by Lipper Inc. The index's returns
include reinvested dividends.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until October 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,110.70 $ 6.89(d) 1.31%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.40 $ 6.59(d) 1.31%(d)
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,105.60 $10.92(d) 2.08%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.56 $10.45(d) 2.08%(d)
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,106.20 $10.82(d) 2.06%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.66 $10.35(d) 2.06%(d)
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,112.80 $ 4.85(d) .92%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.34 $ 4.63(d) .92%(d)
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,110.30 $ 6.42(d) 1.22%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.85 $ 6.14(d) 1.22%(d)
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,110.40 $ 7.16(d) 1.36%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.15 $ 6.84(d) 1.36%(d)
- -------------------------------------------------------------------------------------------
Class Z
- -------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,026.80 $ 0.86(d) .97%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.09 $ 4.89(d) .97%(d)
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class Z is as of September 27, 2010 (when
shares became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class Z are equal to the annualized expense ratio for the class as
indicated above, multiplied by the average account value over the period,
multiplied by 32/365 (to reflect the number of days in the period).
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 15
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
(c) Based on the actual return for the six months ended October 31, 2010:
+11.07% for Class A, +10.56% for Class B, +10.62% for Class C, +11.28% for
Class I, +11.03% for Class R4 and +11.04% for Class W.
(d) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until December 31, 2011, unless sooner terminated at the sole discretion of
the Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), will not exceed 1.28% for Class A, 2.03% for Class B, 2.03%
for Class C, 0.83% for Class I, 1.13% for Class R4, 1.28% for Class W and
1.03% for Class Z. Any amounts waived will not be reimbursed by the Fund.
This change is effective January 1, 2011. Had this change been in place for
the entire six month period ended October 31, 2010, the actual expenses paid
would have been $6.74 for Class A, $10.66 for Class B, $10.66 for Class C,
$4.37 for Class I, $5.95 for Class R4, $6.73 for Class W and $0.92 for Class
Z; the hypothetical expenses paid would have been $6.44 for Class A, $10.20
for Class B, $10.20 for Class C, $4.18 for Class I, $5.69 for Class R4,
$6.44 for Class W and $5.19 for Class Z.
(e) Based on the actual return for the period from September 27, 2010 (when
shares became available) to October 31, 2010 of +2.68% for Class Z.
- --------------------------------------------------------------------------------
16 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
Columbia Emerging Markets Bond Fund
OCTOBER 31, 2010
(Percentages represent value of investments compared to net assets)
<Table>
<Caption>
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE
CORPORATE BONDS & NOTES (26.0%)
BRAZIL (2.5%)
Banco Cruzeiro do Sul SA
Subordinated Notes (a)
09/22/20 8.875% $2,500,000 $2,617,483
Marfrig Overseas Ltd. (a)
11/16/16 9.625% 1,130,000 1,221,812
Marfrig Overseas Ltd. (a)(b)
05/04/20 9.500% 800,000 856,759
Morgan Stanley
Senior Unsecured (a)
05/03/17 10.090% BRL 2,100,000 1,195,868
-----------
Total 5,891,922
- ----------------------------------------------------------------------------------------
DOMINICAN REPUBLIC (1.4%)
Cerveceria Nacional Dominicana C por A (a)
03/27/12 16.000% 3,450,000 3,212,813
- ----------------------------------------------------------------------------------------
INDONESIA (4.0%)
Majapahit Holding BV (a)
06/28/17 7.250% 1,150,000 1,344,063
08/07/19 8.000% 2,100,000 2,606,625
01/20/20 7.750% 2,900,000 3,562,871
Majapahit Holding BV (a)(b)
10/17/16 7.750% 1,630,000 1,931,550
-----------
Total 9,445,109
- ----------------------------------------------------------------------------------------
KAZAKHSTAN (2.5%)
KazMunaiGaz Finance Sub BV (a)
07/02/18 9.125% 2,595,000 3,182,119
05/05/20 7.000% 1,850,000 1,973,988
Kazakhstan Temir Zholy Finance BV (a)
10/06/20 6.375% 800,000 832,226
-----------
Total 5,988,333
- ----------------------------------------------------------------------------------------
NETHERLANDS (1.1%)
Lukoil International Finance BV (a)
11/05/19 7.250% 2,400,000 2,607,299
- ----------------------------------------------------------------------------------------
PERU (0.9%)
Banco de Credito del Peru
Subordinated Notes (a)(c)
10/15/22 7.170% PEN 6,000,000 2,206,576
- ----------------------------------------------------------------------------------------
PHILIPPINES (2.7%)
Power Sector Assets & Liabilities Management Corp. (a)(b)
Government Guaranteed
05/27/19 7.250% 2,750,000 3,351,563
12/02/24 7.390% 2,500,000 3,107,057
-----------
Total 6,458,620
- ----------------------------------------------------------------------------------------
QATAR (1.2%)
Qtel International Finance Ltd. (a)
10/19/25 5.000% 1,200,000 1,175,983
Qtel International Finance Ltd. (a)(b)
02/16/21 4.750% 1,600,000 1,598,270
-----------
Total 2,774,253
- ----------------------------------------------------------------------------------------
RUSSIAN FEDERATION (7.3%)
Gaz Capital SA for Gazprom (a)
Senior Unsecured
11/22/16 6.212% 3,750,000 3,998,438
08/16/37 7.288% 2,950,000 3,200,750
Gaz Capital SA for Gazprom (a)(b)
Senior Unsecured
04/11/18 8.146% 850,000 982,813
Gazprom Via Gaz Capital SA
Senior Unsecured (a)
03/07/22 6.510% 1,300,000 1,360,125
TNK-BP Finance SA (a)
03/13/18 7.875% 2,625,000 2,969,748
TransCapitalInvest Ltd. for OJSC AK Transneft
Senior Unsecured (a)
08/07/18 8.700% 3,680,000 4,626,503
-----------
Total 17,138,377
- ----------------------------------------------------------------------------------------
UKRAINE (1.3%)
MHP SA (a)
04/29/15 10.250% 2,928,000 3,071,098
- ----------------------------------------------------------------------------------------
UNITED KINGDOM (1.1%)
Vedanta Resources PLC
Senior Unsecured (a)(b)
07/18/18 9.500% 2,500,000 2,689,128
- ----------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost: $55,248,710) $61,483,528
- ----------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE
FOREIGN GOVERNMENT OBLIGATIONS (68.0%)
ARGENTINA (7.0%)
Argentina Bonos
Senior Unsecured
09/12/13 7.000% $3,950,000 $3,886,086
10/03/15 7.000% 2,600,000 2,485,600
04/17/17 7.000% 2,250,000 2,010,375
Argentina Government International Bond
Senior Unsecured(d)
12/15/35 0.000% 16,450,000 2,187,850
Fideicomiso Financiero Chubut Regalias Hidrocarburiferas
Senior Secured
07/01/20 7.750% 1,300,000 1,280,500
Provincia de Buenos Aires (a)
10/05/15 11.750% 2,000,000 2,021,383
Provincia de Cordoba
Senior Unsecured (a)
08/17/17 12.375% 2,450,000 2,566,375
-----------
Total 16,438,169
- ----------------------------------------------------------------------------------------
BRAZIL (8.0%)
Banco Nacional de Desenvolvimento Economico e Social
Senior Unsecured (a)
06/16/18 6.369% 1,450,000 1,663,875
Brazil Notas do Tesouro Nacional
01/01/12 10.000% BRL 489,500 2,928,862
01/01/13 10.000% BRL 1,006,100 5,905,473
Brazilian Government International Bond
Senior Unsecured
01/07/41 5.625% 2,800,000 3,097,500
Petrobras International Finance Co. -- Pifco
03/15/19 7.875% 3,200,000 4,044,425
Petrobras International Finance Co. -- Pifco (b)
01/20/40 6.875% 1,000,000 1,157,084
-----------
Total 18,797,219
- ----------------------------------------------------------------------------------------
CAYMAN ISLANDS (0.6%)
Government of the Cayman Islands
Senior Unsecured (a)
11/24/19 5.950% 1,300,000 1,391,000
- ----------------------------------------------------------------------------------------
COLOMBIA (5.4%)
Bogota Distrito Capital
Senior Unsecured (a)
07/26/28 9.750% COP 1,377,000,000 1,076,591
Colombia Government International Bond
10/22/15 12.000% COP 2,093,000,000 1,532,165
09/18/37 7.375% 2,400,000 3,204,000
Senior Unsecured
04/14/21 7.750% COP 1,911,000,000 1,262,476
Columbia Government International Bond
Senior Unsecured (b)
01/18/41 6.125% 3,600,000 4,111,268
Ecopetrol SA
Senior Unsecured (b)
07/23/19 7.625% 700,000 861,000
Republic of Colombia
06/28/27 9.850% COP 1,000,000,000 812,929
-----------
Total 12,860,429
- ----------------------------------------------------------------------------------------
CROATIA (1.0%)
Croatia Government International Bond
Senior Unsecured (a)
07/14/20 6.625% 2,000,000 2,265,000
- ----------------------------------------------------------------------------------------
DOMINICAN REPUBLIC (1.3%)
Dominican Republic International Bond
Senior Unsecured (a)
05/06/21 7.500% 2,700,000 3,081,375
- ----------------------------------------------------------------------------------------
EL SALVADOR (1.5%)
El Salvador Government International Bond (a)
04/10/32 8.250% 750,000 889,688
06/15/35 7.650% 1,810,000 2,056,612
Senior Unsecured
01/24/23 7.750% 460,000 535,900
-----------
Total 3,482,200
- ----------------------------------------------------------------------------------------
INDONESIA (8.0%)
Indonesia Government International Bond (a)
Senior Unsecured
10/12/35 8.500% 650,000 940,875
01/17/38 7.750% 3,500,000 4,707,500
Indonesia Treasury Bond
Senior Unsecured
10/15/14 11.000% IDR 6,000,000,000 777,744
07/15/17 10.000% IDR 10,000,000,000 1,302,505
09/15/19 11.500% IDR 29,400,000,000 4,158,404
11/15/20 11.000% IDR 9,000,000,000 1,246,212
06/15/21 12.800% IDR 12,800,000,000 1,964,294
07/15/22 10.250% IDR 29,000,000,000 3,859,311
-----------
Total 18,956,845
- ----------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
18 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE
FOREIGN GOVERNMENT OBLIGATIONS (CONTINUED)
LITHUANIA (1.1%)
Lithuania Government International Bond (a)
Senior Unsecured
09/14/17 5.125% $1,150,000 $1,178,750
02/11/20 7.375% 1,200,000 1,401,259
-----------
Total 2,580,009
- ----------------------------------------------------------------------------------------
MEXICO (8.7%)
Mexican Bonos
12/17/15 8.000% MXN 19,400,000 1,745,667
12/15/16 7.250% MXN 33,010,000 2,898,949
12/14/17 7.750% MXN 39,100,000 3,534,163
Pemex Project Funding Master Trust
03/01/18 5.750% 1,550,000 1,740,174
01/21/21 5.500% 1,500,000 1,630,800
Pemex Project Funding Master Trust (b)
06/15/35 6.625% 4,304,000 4,773,859
06/15/38 6.625% 2,000,000 2,229,522
Petroleos Mexicanos
05/03/19 8.000% 1,600,000 2,056,160
-----------
Total 20,609,294
- ----------------------------------------------------------------------------------------
PERU (2.5%)
Peru Enhanced Pass-Through Finance Ltd.
Senior Secured Zero Coupon (a)(d)
05/31/18 0.000% 5,064,228 4,177,988
Peruvian Government International Bond
Senior Unsecured (b)
03/14/37 6.550% 1,500,000 1,841,250
-----------
Total 6,019,238
- ----------------------------------------------------------------------------------------
QATAR (0.9%)
Qatar Government International Bond
Senior Unsecured (a)
01/20/40 6.400% 1,000,000 1,155,000
Qatari Diar Finance QSC
Government Guaranteed (a)
07/21/20 5.000% 1,000,000 1,046,637
-----------
Total 2,201,637
- ----------------------------------------------------------------------------------------
RUSSIAN FEDERATION (4.4%)
Russian Foreign Bond -- Eurobond (a)
Senior Unsecured
04/29/20 5.000% 3,500,000 3,643,500
Russian Foreign Bond -- Eurobond (a)(c)
03/31/30 7.500% 5,737,845 6,856,725
-----------
Total 10,500,225
- ----------------------------------------------------------------------------------------
TRINIDAD AND TOBAGO (1.2%)
Petroleum Co of Trinidad & Tobago Ltd.
Senior Unsecured (a)
08/14/19 9.750% 2,300,000 2,885,728
- ----------------------------------------------------------------------------------------
TURKEY (6.9%)
Turkey Government International Bond
Senior Unsecured
03/15/15 7.250% 1,100,000 1,306,250
11/07/19 7.500% 2,025,000 2,564,156
06/05/20 7.000% 1,300,000 1,612,000
03/30/21 5.625% 1,850,000 2,067,375
03/17/36 6.875% 3,800,000 4,569,500
05/30/40 6.750% 3,500,000 4,147,500
-----------
Total 16,266,781
- ----------------------------------------------------------------------------------------
URUGUAY (3.0%)
Uruguay Government International Bond
04/05/27 4.250% UYU 87,773,426 4,805,507
Uruguay Government International Bond
Senior Unsecured
03/21/36 7.625% 1,783,939 2,363,719
-----------
Total 7,169,226
- ----------------------------------------------------------------------------------------
VENEZUELA (6.5%)
Petroleos de Venezuela SA
04/12/17 5.250% 8,600,000 5,074,000
Senior Unsecured
10/28/16 5.125% 3,400,000 1,908,501
Venezuela Government International Bond
Senior Unsecured
10/08/14 8.500% 794,000 668,945
Venezuela Government International Bond (a)
Senior Unsecured
05/07/23 9.000% 5,450,000 3,652,045
Venezuela Government International Bond (a)(b)
02/26/16 5.750% 4,289,500 3,056,269
03/31/38 7.000% 1,800,000 1,008,000
-----------
Total 15,367,760
- ----------------------------------------------------------------------------------------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost: $137,864,933) $160,872,135
- ----------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
ISSUER SHARES VALUE
MONEY MARKET FUND (3.7%)
Columbia Short-Term Cash Fund, 0.241% (e)(f) 8,618,153 $8,618,153
- ----------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $8,618,153) $8,618,153
- ----------------------------------------------------------------------
</Table>
<Table>
<Caption>
EFFECTIVE PAR/
ISSUER YIELD PRINCIPAL VALUE
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (2.9%)
REPURCHASE AGREEMENTS (2.9%)
Deutsche Bank AG (g)
dated 10/29/10, matures 11/01/10,
repurchase price
$6,724,429 0.230% $6,724,300 $6,724,300
- -------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $6,724,300) $6,724,300
- -------------------------------------------------------------------------
TOTAL INVESTMENTS
(Cost: $208,456,096) $237,698,116
OTHER ASSETS & LIABILITIES, NET (1,314,431)
- -------------------------------------------------------------------------
NET ASSETS $236,383,685
=========================================================================
</Table>
Principal amounts are denominated in United States Dollars unless otherwise
noted.
NOTES TO PORTFOLIO OF INVESTMENTS
(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 October
31, 2010, the value of these securities amounted to $114,741,603 or 48.54%
of net assets.
(b) At October 31, 2010, security was partially or fully on loan.
(c) Variable rate security. The interest rate shown reflects the rate as of
October 31, 2010.
(d) Zero coupon bond.
(e) Investments in affiliates during the year ended October 31, 2010:
<Table>
<Caption>
SALES COST/ DIVIDENDS
BEGINNING PURCHASE PROCEEDS REALIZED ENDING OR INTEREST
ISSUER COST COST FROM SALES GAIN/LOSS COST INCOME VALUE
---------------------------------------------------------------------------------------------------------
Columbia Short-
Term Cash Fund $24,305,531 $116,644,304 $132,331,682 $-- $8,618,153 $21,680 $8,618,153
</Table>
(f) The rate shown is the seven-day current annualized yield at October 31,
2010.
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
20 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(g) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
DEUTSCHE BANK AG (0.230%)
SECURITY DESCRIPTION VALUE
- -----------------------------------------------------------
Fannie Mae Pool $6,858,786
- -----------------------------------------------------------
Total market value of collateral securities $6,858,786
- -----------------------------------------------------------
</Table>
CURRENCY LEGEND
<Table>
BRL Brazilian Real
COP Colombian Peso
IDR Indonesian Rupiah
MXN Mexican Peso
PEN Peru Nuevos Soles
UYU Uruguay Pesos
</Table>
INVESTMENTS IN DERIVATIVES
CREDIT DEFAULT SWAP CONTRACTS OUTSTANDING AT OCTOBER 31, 2010
<Table>
<Caption>
BUY PROTECTION
UNAMORTIZED PERIODIC
PAY PREMIUM PAYMENTS
REFERENCE EXPIRATION FIXED NOTIONAL MARKET (PAID) RECEIVABLE UNREALIZED UNREALIZED
COUNTERPARTY ENTITY DATE RATE AMOUNT VALUE RECEIVED (PAYABLE) APPRECIATION DEPRECIATION
- --------------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase CDX Emerging June 20, 2013 2.65% $2,000,000 $(29,003) $(217,758) $(19,433) $-- $(266,194)
Bank Markets Index
</Table>
CREDIT DEFAULT SWAP CONTRACTS OUTSTANDING AT OCTOBER 31, 2010
<Table>
<Caption>
SELL PROTECTION
UNAMORTIZED PERIODIC
RECEIVE PREMIUM PAYMENTS
REFERENCE EXPIRATION FIXED NOTIONAL MARKET (PAID) RECEIVABLE UNREALIZED UNREALIZED
COUNTERPARTY ENTITY DATE RATE AMOUNT VALUE RECEIVED (PAYABLE) APPRECIATION DEPRECIATION
- --------------------------------------------------------------------------------------------------------------------------------
Merril Lynch CDX Emerging June 20, 2013 2.65% $2,000,000 $29,003 $-- $19,433 $48,436 $--
Intl Markets Index
</Table>
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
22 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
valuations may include, but are not limited to, financial statement analysis,
capital account balances, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of October 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCTOBER 31, 2010
----------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(b) INPUTS TOTAL
- --------------------------------------------------------------------------------------------
Corporate Bonds & Notes
Banking $-- $2,617,483 $2,206,576 $4,824,059
All Other Industries -- 56,659,469 -- 56,659,469
Foreign Government
Obligations -- 155,413,647 5,458,488 160,872,135
- --------------------------------------------------------------------------------------------
Total Bonds -- 214,690,599 7,665,064 222,355,663
- --------------------------------------------------------------------------------------------
Other
Affiliated Money
Market Fund(c) 8,618,153 -- -- 8,618,153
Investments of Cash
Collateral Received
for Securities on
Loan -- 6,724,300 -- 6,724,300
- --------------------------------------------------------------------------------------------
Total Other 8,618,153 6,724,300 -- 15,342,453
- --------------------------------------------------------------------------------------------
Investments in
Securities 8,618,153 221,414,899 7,665,064 237,698,116
Derivatives(d)
Assets
Swap Contracts -- 48,436 -- 48,436
Liabilities
Swap Contracts -- (48,436) -- (48,436)
- --------------------------------------------------------------------------------------------
Total $8,618,153 $221,414,899 $7,665,064 $237,698,116
- --------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at October 31, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 23
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
The following table is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value.
<Table>
<Caption>
FOREIGN
CORPORATE BONDS GOVERNMENT
& NOTES OBLIGATIONS TOTAL
- ---------------------------------------------------------------------------------
Balance as of October 31, 2009 $2,703,228 $5,251,716 $7,954,944
Accrued discounts/premiums 1,502 177,912 179,414
Realized gain (loss) -- 284,798 284,798
Change in unrealized
appreciation (depreciation)* 191,485 (886) 190,599
Sales (907,371) (1,538,802) (2,446,173)
Purchases 3,430,545 1,283,750 4,714,295
Transfers into Level 3 -- -- --
Transfers out of Level 3 (3,212,813) -- (3,212,813)
- ---------------------------------------------------------------------------------
Balance as of October 31, 2010 $2,206,576 $5,458,488 $7,665,064
- ---------------------------------------------------------------------------------
</Table>
* Change in unrealized appreciation (depreciation) relating to securities
held at October 31, 2010 was $145,688, which is comprised of Corporate
Bonds & Notes of $146,574 and Foreign Government Obligations of $(886).
Transfers in and/or out of Level 3 are determined based on the fair value at the
beginning of the period for security positions held throughout the period.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
See accompanying Notes to Financial Statements.
- --------------------------------------------------------------------------------
24 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
OCTOBER 31, 2010
<Table>
<Caption>
ASSETS
Investments, at value
Unaffiliated issuers* (identified cost $193,113,643) $222,355,663
Affiliated issuers (identified cost $8,618,153) 8,618,153
Investment of cash collateral received for securities on loan
(identified cost $6,724,300) 6,724,300
- -------------------------------------------------------------------------------
Total investments (identified cost $208,456,096) 237,698,116
Cash 74,375
Foreign currency (identified cost $755,693) 773,856
Unrealized appreciation on swap contracts 48,436
Premiums paid on outstanding credit default swap contracts 217,758
Receivable for:
Capital shares sold 1,776,664
Dividends 1,449
Interest 3,157,541
Reclaims 157,852
Expense reimbursement due from Investment Manager 153
- -------------------------------------------------------------------------------
Total assets 243,906,200
- -------------------------------------------------------------------------------
LIABILITIES
Due upon return of securities on loan 6,724,300
Unrealized depreciation on swap contracts 266,194
Payable for:
Investments purchased 104,057
Capital shares purchased 310,613
Investment management fees 4,632
Distribution fees 1,216
Transfer agent fees 13,634
Administration fees 515
Plan administration fees 1
Other expenses 97,353
- -------------------------------------------------------------------------------
Total liabilities 7,522,515
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $236,383,685
- -------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 25
STATEMENT OF ASSETS AND LIABILITIES (continued) --------------------------------
OCTOBER 31, 2010
<Table>
<Caption>
REPRESENTED BY
Capital stock -- $ .01 par value $ 202,285
Additional paid-in capital 211,396,096
Undistributed net investment income 1,960,121
Accumulated realized loss (6,227,958)
Unrealized appreciation (depreciation) on:
Investments 29,242,020
Foreign currency translations 28,879
Swap contracts (217,758)
- -------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $236,383,685
- -------------------------------------------------------------------------------
*Value of securities on loan $ 6,586,271
- -------------------------------------------------------------------------------
Net assets
Class A $ 76,725,071
Class B $ 3,568,837
Class C $ 3,622,183
Class I $ 78,153,644
Class R4 $ 124,205
Class W $ 74,066,903
Class Z $ 122,842
Shares outstanding
Class A 6,563,738
Class B 305,715
Class C 310,872
Class I 6,684,022
Class R4 10,632
Class W 6,343,020
Class Z 10,506
Net asset value per share
Class A(a) $ 11.69
Class B $ 11.67
Class C $ 11.65
Class I $ 11.69
Class R4 $ 11.68
Class W $ 11.68
Class Z $ 11.69
- -------------------------------------------------------------------------------
</Table>
(a) The maximum offering price per share for Class A is $12.27. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
YEAR ENDED OCTOBER 31, 2010
<Table>
<Caption>
NET INVESTMENT INCOME
Income:
Interest $20,247,837
Dividends from affiliates 21,680
Income from securities lending -- net 5,036
Foreign taxes withheld (19,848)
- ------------------------------------------------------------------------------
Total income 20,254,705
- ------------------------------------------------------------------------------
Expenses:
Investment management fees 1,777,437
Distribution fees
Class A 120,941
Class B 30,560
Class C 14,021
Class W 265,437
Transfer agent fees
Class A 89,055
Class B 6,173
Class C 2,605
Class R4 33
Class W 208,319
Class Z 2
Administration fees 197,667
Plan administration fees
Class R4 119
Compensation of board members 7,374
Custodian fees 47,725
Printing and postage fees 65,980
Registration fees 85,865
Professional fees 38,161
Other 64,359
- ------------------------------------------------------------------------------
Total expenses 3,021,833
Fees waived or expenses reimbursed by Investment Manager and its
affiliates (34,703)
- ------------------------------------------------------------------------------
Total net expenses 2,987,130
- ------------------------------------------------------------------------------
Net investment income 17,267,575
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 27
STATEMENT OF OPERATIONS (continued) --------------------------------------------
YEAR ENDED OCTOBER 31, 2010
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Investments $12,158,484
Foreign currency transactions 88,747
Forward foreign currency exchange contracts (36,522)
Swap contracts (89,634)
- ------------------------------------------------------------------------------
Net realized gain 12,121,075
Net change in unrealized appreciation (depreciation) on:
Investments 15,776,821
Foreign currency translations 11,810
Swap contracts 83,501
- ------------------------------------------------------------------------------
Net change in unrealized appreciation 15,872,132
- ------------------------------------------------------------------------------
Net realized and unrealized gain 27,993,207
- ------------------------------------------------------------------------------
Net increase in net assets resulting from operations $45,260,782
- ------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
2010 2009
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income $ 17,267,575 $ 11,540,815
Net realized gain (loss) 12,121,075 (17,850,581)
Net change in unrealized appreciation 15,872,132 83,465,430
- ---------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 45,260,782 77,155,664
- ---------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (3,468,335) (713,409)
Class B (188,340) (70,961)
Class C (95,014) (14,643)
Class I (6,006,584) (3,796,231)
Class R4 (3,651) (1,021)
Class W (6,686,304) (5,505,562)
Class Z (776) --
- ---------------------------------------------------------------------------------------------
Total distributions to shareholders (16,449,004) (10,101,827)
- ---------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (51,715,619) 11,510,561
- ---------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (22,903,841) 78,564,398
Net assets at beginning of year 259,287,526 180,723,128
- ---------------------------------------------------------------------------------------------
Net assets at end of year $236,383,685 $259,287,526
- ---------------------------------------------------------------------------------------------
Undistributed net investment income $ 1,960,121 $ 781,377
- ---------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS (continued) -------------------------------
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
2010 2009
------------------------- -------------------------
SHARES DOLLARS ($) SHARES DOLLARS ($)
CAPITAL STOCK ACTIVITY
CLASS A SHARES
Subscriptions 5,657,021 62,561,564 3,173,284 29,094,965
Conversions from Class B 81,014 908,215 31,953 305,470
Distributions reinvested 281,492 3,104,397 76,058 683,747
Redemptions (2,617,094) (28,225,287) (1,490,957) (11,853,498)
- -----------------------------------------------------------------------------------------------------------------------
Net increase 3,402,433 38,348,889 1,790,338 18,230,684
- -----------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Subscriptions 208,306 2,275,298 153,167 1,423,379
Distributions reinvested 16,340 179,177 7,818 67,114
Conversions to Class A (81,158) (908,215) (31,986) (305,470)
Redemptions (71,810) (777,477) (62,140) (536,960)
- -----------------------------------------------------------------------------------------------------------------------
Net increase 71,678 768,783 66,859 648,063
- -----------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Subscriptions 275,492 3,112,848 49,606 476,438
Distributions reinvested 7,455 82,552 1,458 12,821
Redemptions (42,014) (467,211) (8,248) (74,221)
- -----------------------------------------------------------------------------------------------------------------------
Net increase 240,933 2,728,189 42,816 415,038
- -----------------------------------------------------------------------------------------------------------------------
CLASS I SHARES
Subscriptions 878,050 9,440,113 5,204,021 50,883,356
Distributions reinvested 550,588 6,005,808 449,432 3,795,741
Redemptions (5,018,570) (53,789,204) (4,633,781) (37,808,587)
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) (3,589,932) (38,343,283) 1,019,672 16,870,510
- -----------------------------------------------------------------------------------------------------------------------
CLASS R4 SHARES
Subscriptions 9,071 101,123 55 454
Distributions reinvested 257 2,907 65 553
Redemptions (934) (10,710) (4) (33)
- -----------------------------------------------------------------------------------------------------------------------
Net increase 8,394 93,320 116 974
- -----------------------------------------------------------------------------------------------------------------------
CLASS W SHARES
Subscriptions 2,099,887 22,301,741 4,123,883 37,492,530
Distributions reinvested 614,502 6,685,949 659,389 5,505,342
Redemptions (7,690,751) (84,422,562) (8,276,964) (67,652,580)
- -----------------------------------------------------------------------------------------------------------------------
Net decrease (4,976,362) (55,434,872) (3,493,692) (24,654,708)
- -----------------------------------------------------------------------------------------------------------------------
CLASS Z SHARES
Subscriptions 10,441 122,597 -- --
Distributions reinvested 65 758 -- --
- -----------------------------------------------------------------------------------------------------------------------
Net increase 10,506 123,355 -- --
- -----------------------------------------------------------------------------------------------------------------------
TOTAL NET INCREASE (DECREASE) (4,832,350) (51,715,619) (573,891) 11,510,561
- -----------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A ----------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $10.35 $7.05 $10.57 $10.16 $9.98
- -------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .76 .53 .61 .59 .33
Net realized and unrealized gain (loss) on
investments 1.32 3.22 (3.43) .39 .18
- -------------------------------------------------------------------------------------------------------------
Total from investment operations 2.08 3.75 (2.82) .98 .51
- -------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.74) (.45) (.61) (.55) (.33)
Net realized gains -- -- (.09) (.02) --
- -------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (.74) (.45) (.70) (.57) (.33)
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.69 $10.35 $7.05 $10.57 $10.16
- -------------------------------------------------------------------------------------------------------------
TOTAL RETURN 20.75% 54.87% (28.44%) 9.94% 5.25%
- -------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 1.37% 1.37% 1.41% 1.33% 1.81%(c)
- -------------------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 1.31% 1.27% 1.40% 1.33% 1.39%(c)
- -------------------------------------------------------------------------------------------------------------
Net investment income 6.93% 5.85% 6.31% 5.61% 5.20%(c)
- -------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $76,725 $32,726 $9,671 $4,674 $11,663
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41% 32%
- -------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B --------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $10.34 $7.05 $10.55 $10.16 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .67 .46 .55 .52 .28
Net realized and unrealized gain (loss) on
investments 1.31 3.22 (3.42) .37 .19
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.98 3.68 (2.87) .89 .47
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.65) (.39) (.54) (.48) (.28)
Net realized gains -- -- (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions to shareholders (.65) (.39) (.63) (.50) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.67 $10.34 $7.05 $10.55 $10.16
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN 19.76% 53.60% (28.85%) 8.94% 4.80%
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 2.13% 2.15% 2.19% 2.13% 2.62%(c)
- -----------------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 2.08% 2.04% 2.17% 2.13% 2.20%(c)
- -----------------------------------------------------------------------------------------------------------
Net investment income 6.20% 5.28% 5.61% 4.90% 4.51%(c)
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $3,569 $2,420 $1,178 $1,147 $510
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41% 32%
- -----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
32 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C --------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $10.32 $7.04 $10.54 $10.15 $9.97
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .67 .45 .55 .53 .28
Net realized and unrealized gain (loss) on
investments 1.32 3.22 (3.42) .36 .18
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 1.99 3.67 (2.87) .89 .46
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.66) (.39) (.54) (.48) (.28)
Net realized gains -- -- (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions to shareholders (.66) (.39) (.63) (.50) (.28)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.65 $10.32 $7.04 $10.54 $10.15
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN 19.87% 53.57% (28.88%) 8.94% 4.75%
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 2.14% 2.13% 2.18% 2.13% 2.61%(c)
- -----------------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 2.06% 2.03% 2.16% 2.13% 2.19%(c)
- -----------------------------------------------------------------------------------------------------------
Net investment income 6.14% 5.06% 5.64% 5.00% 4.46%(c)
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $3,622 $722 $191 $169 $39
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41% 32%
- -----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I -------------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $10.35 $7.05 $10.57 $10.16 $9.98
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .77 .57 .69 .65 .35
Net realized and unrealized gain (loss) on
investments 1.35 3.22 (3.46) .38 .17
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations 2.12 3.79 (2.77) 1.03 .52
- ----------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (.78) (.49) (.66) (.60) (.34)
Net realized gains -- -- (.09) (.02) --
- ----------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (.78) (.49) (.75) (.62) (.34)
- ----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.69 $10.35 $7.05 $10.57 $10.16
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN 21.19% 55.52% (28.08%) 10.38% 5.44%
- ----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 0.92% 0.88% 0.91% 0.93% 1.52%(c)
- ----------------------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 0.92% 0.85% 0.91% 0.93% 1.10%(c)
- ----------------------------------------------------------------------------------------------------------------
Net investment income 7.13% 6.59% 6.89% 6.14% 5.70%(c)
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $78,154 $106,359 $65,282 $147,109 $47,400
- ----------------------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41% 32%
- ----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
34 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 --------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006(a)
Net asset value, beginning of period $10.35 $7.05 $10.56 $10.16 $9.98
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .72 .54 .67 .60 .34
Net realized and unrealized gain (loss) on
investments 1.35 3.23 (3.43) .39 .18
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 2.07 3.77 (2.76) .99 .52
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.74) (.47) (.66) (.57) (.34)
Net realized gains -- -- (.09) (.02) --
- -----------------------------------------------------------------------------------------------------------
Total distributions to shareholders (.74) (.47) (.75) (.59) (.34)
- -----------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.68 $10.35 $7.05 $10.56 $10.16
- -----------------------------------------------------------------------------------------------------------
TOTAL RETURN 20.75% 55.14% (27.98%) 9.97% 5.36%
- -----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 1.27% 1.18% 1.22% 1.24% 1.67%(c)
- -----------------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 1.22% 1.11% 0.97% 1.24% 1.25%(c)
- -----------------------------------------------------------------------------------------------------------
Net investment income 6.52% 6.31% 6.82% 5.75% 5.37%(c)
- -----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $124 $23 $15 $16 $14
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41% 32%
- -----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 35
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS W ------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(e)
Net asset value, beginning of period $10.34 $7.05 $10.55 $10.24
- ---------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .75 .53 .56 .57
Net realized and unrealized gain (loss) on
investments 1.32 3.21 (3.36) .28
- ---------------------------------------------------------------------------------------------------
Total from investment operations 2.07 3.74 (2.80) .85
- ---------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.73) (.45) (.61) (.52)
Net realized gains -- -- (.09) (.02)
- ---------------------------------------------------------------------------------------------------
Total distributions to shareholders (.73) (.45) (.70) (.54)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $11.68 $10.34 $7.05 $10.55
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN 20.68% 54.69% (28.29%) 8.49%
- ---------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 1.37% 1.33% 1.35% 1.33%(c)
- ---------------------------------------------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 1.37% 1.30% 1.35% 1.33%(c)
- ---------------------------------------------------------------------------------------------------
Net investment income 6.93% 6.18% 6.08% 5.86%(c)
- ---------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $74,067 $117,037 $104,386 $37,921
- ---------------------------------------------------------------------------------------------------
Portfolio turnover 38% 62% 82% 41%
- ---------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
36 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS Z OCT. 31,
PER SHARE DATA 2010(f)
Net asset value, beginning of period $11.47
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .07
Net realized and unrealized gain on
investments .24
- -------------------------------------------------------------
Total from investment operations .31
- -------------------------------------------------------------
LESS DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.09)
- -------------------------------------------------------------
Net asset value, end of period $11.69
- -------------------------------------------------------------
TOTAL RETURN 2.68%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Expenses prior to fees waived or expenses
reimbursed 1.32%(c)
- -------------------------------------------------------------
Net expenses after fees waived or expenses
reimbursed(d) 0.97%(c)
- -------------------------------------------------------------
Net investment income 7.36%(c)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in thousands) $123
- -------------------------------------------------------------
Portfolio turnover 38%
- -------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from February 16, 2006 (when shares became available) to
October 31, 2006.
(b) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(c) Annualized.
(d) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds).
(e) For the period from December 1, 2006 (when shares became available) to
October 31, 2007.
(f) For the period from September 27, 2010 (when shares became available) to
October 31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
OCTOBER 31, 2010
NOTE 1. ORGANIZATION
Columbia Emerging Markets Bond Fund (formerly known as RiverSource Emerging
Markets Bond Fund) (the Fund), a series of RiverSource Global Series, Inc. (the
Corporation), is a non-diversified Fund. The Corporation is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company.
FUND SHARES
The Corporation has 10 billion authorized shares of capital stock that can be
allocated among the separate series as designated by the Corporation's Board of
Directors (the Board), and the Fund offers Class A, Class B, Class C, Class I,
Class R4, Class W and Class Z shares. All share classes have identical voting,
dividend and liquidation rights. Each share class has its own expense structure
and sales charges, as applicable.
Class A shares are subject to a maximum front-end sales charge of 4.75% based on
the investment amount. Class A shares purchased without an initial sales charge
in accounts aggregating $1 million at the time of purchase are subject to a
1.00% contingent deferred sales charge (CDSC) if the shares are sold within
within 18 months of purchase, charged as follows: 1.00% CDSC if redeemed within
12 months of purchase, and 0.50% CDSC if redeemed more than 12, but less than
18, months after purchase.
The Fund no longer accepts investments by new or existing investors in the
Fund's Class B shares, except in connection with the reinvestment of any
dividend and/or capital gain distributions in Class B shares of the Fund and
exchanges by existing Class B shareholders of other funds within the Columbia
Family of Funds. Class B shares may be subject to a maximum CDSC of 5.00% based
upon the holding period after purchase. Class B shares will generally convert to
Class A shares eight years after purchase.
Class C shares are subject to a 1.00% CDSC on shares redeemed within one year of
purchase.
Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
Class R4 shares are not subject to sales charges, however, the class is closed
to new investors effective December 31, 2010.
Class W shares are not subject to sales charges and are only available to
investors purchasing through authorized investment programs managed by
investment professionals, including discretionary managed account programs.
- --------------------------------------------------------------------------------
38 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Class Z shares are not subject to sales charges and are available only to
certain investors, as described in the Fund's prospectus. Class Z shares became
effective September 27, 2010.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles (GAAP) requires management to make certain
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
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Equity securities are valued at the last quoted sales price on
the principal exchange or market on which they trade, except for securities
traded on the NASDAQ Stock Market, 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 mean of the latest quoted bid and asked prices
on such exchanges or markets.
Debt securities are generally traded in the over-the-counter market and are
valued by an independent pricing service using an evaluated bid. When market
quotes are not readily available, the pricing service, in determining fair
values of debt securities, takes into consideration such factors as current
quotations by broker/dealers, coupon, maturity, quality, type of issue, trading
characteristics, and other yield and risk factors it deems relevant in
determining valuations.
Foreign securities are valued based on quotations from the principal market in
which such securities are normally traded. However, many securities markets and
exchanges outside the U.S. close prior to the close of the NYSE; therefore, the
closing prices for securities in such markets or on such exchanges may not fully
reflect events that occur after such close but before the close of the NYSE.
Accordingly, in those situations, Ameriprise Financial, Inc. (Ameriprise
Financial), parent company of Columbia Management Investment Advisors, LLC
(formerly known as RiverSource Investments, LLC) (the Investment Manager), as
administrator to the Fund, will fair value foreign securities pursuant to
procedures adopted by the Board, including utilizing a third party pricing
service to determine these fair values.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
The third party pricing service takes into account multiple factors, including,
but not limited to, movements in the U.S. securities markets, certain depositary
receipts, futures contracts and foreign exchange rates that have occurred
subsequent to the close of the foreign exchange, to determine a good faith
estimate that reasonably reflects the current market conditions as of the close
of the NYSE. The fair value of a security is likely to be different from the
quoted or published price, if available.
Short-term securities purchased within 60 days to maturity are valued at
amortized cost, which approximates fair value. The value of short-term
securities originally purchased with maturities greater than 60 days is
determined based on an amortized value to par upon reaching 60 days to maturity.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates.
Investments in other open-end investment companies, including money market
funds, are valued at net asset value.
Swap transactions are valued through an independent pricing service or broker,
or if neither is available, through an internal model based upon observable
inputs.
Foreign currency contracts are marked-to-market daily based upon foreign
currency exchange rates provided by a pricing service.
The procedures adopted by the Board generally contemplate the use of fair
valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION
The values of all assets and liabilities denominated 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 and translations
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
- --------------------------------------------------------------------------------
40 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
fluctuations are included with the net realized and unrealized gains (losses) on
investments in the Statement of Operations.
DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk, credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts in
connection with the settlement of purchases and sales of securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
CREDIT DEFAULT SWAP CONTRACTS
Credit default swaps are agreements in which one party pays fixed periodic
payments to a counterparty in consideration for a guarantee from the
counterparty to make a specific payment should a specified negative credit
event(s) take place. The Fund entered into credit default swap transactions to
increase or decrease its credit exposure to an index.
As the purchaser of a credit default swap contract, the Fund purchases
protection by paying a periodic interest rate on the notional amount to the
counterparty. The interest amount is accrued daily as a component of unrealized
appreciation (depreciation) and is recorded as a realized loss upon payment. If
a credit event as specified in the contract occurs, the Fund may have the option
either to deliver the reference obligation to the seller in exchange for a cash
payment of its par amount, or to receive a net cash settlement equal to the par
amount less an agreed-upon value of the reference obligation as of the date of
the credit event. The difference between the value of the obligation or cash
delivered and the notional amount received will be recorded as a realized gain
(loss).
As the seller of a credit default swap contract, the Fund sells protection to a
buyer and will generally receive a periodic interest rate on the notional
amount. The interest amount is accrued daily as a component of unrealized
appreciation (depreciation) and is recorded as a realized gain upon receipt of
the payment. If a credit event as specified in the contract occurs, the Fund may
either be required to accept the reference obligation from the buyer in exchange
for a cash payment of its notional amount, or to pay the buyer a net cash
settlement equal to the notional amount less an agreed-upon value of the
reference obligation as of the date of the credit event. The difference between
the value of the obligation or cash received and the notional amount paid will
be recorded as a realized gain (loss). The maximum potential amount of
undiscounted future payments the Fund could be required to make as the seller of
protection under a credit default swap contract is equal to the notional amount
of the reference obligation. Notional amounts of all credit default swap
contracts outstanding for which the Fund is the seller of protection, if any,
are disclosed in the Credit Default Swap Contracts
- --------------------------------------------------------------------------------
42 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Outstanding schedule following the Portfolio of Investments. These potential
amounts may be partially offset by any recovery values of the respective
reference obligations or premiums received upon entering into the agreement.
As a protection seller, the Fund bears the risk of loss from the credit events
specified in the contract. Although specified events are contract specific,
credit events are generally defined as bankruptcy, failure to pay,
restructuring, obligation acceleration, obligation default, or
repudiation/moratorium. For credit default swap contracts on credit indices,
quoted market prices and resulting market values serve as an indicator of the
current status of the payment/performance risk. Increasing market values, in
absolute terms when compared to the notional amount of the swap, represent a
deterioration of the reference entity's credit soundness and a greater
likelihood or risk of default or other credit event occurring as defined under
the terms of the contract. Market values for credit default swap contracts in
which the Fund is the seller of protection, if any, are disclosed in the Credit
Default Swap Contracts Outstanding schedule following the Portfolio of
Investments.
The notional amounts and market values of credit default swap contracts are not
recorded in the financial statements. Any premium paid or received by the Fund
upon entering into a credit default swap contract is recorded as an asset or
liability, respectively, and amortized daily as a component of realized gain
(loss) in the Statement of Operations. Credit default swap contracts are valued
daily, and the change in value is recorded as unrealized appreciation
(depreciation) until the termination of the swap, at which time a realized gain
(loss) is recorded.
Credit default swap contracts can involve greater risks than if a fund had
invested in the reference obligation directly since, in addition to general
market risks, credit default swaps are subject to counterparty credit risk,
leverage risk, hedging risk, correlation risk and liquidity risk. The Fund will
enter into credit default swap transactions only with counterparties that meet
certain standards of creditworthiness.
EFFECTS OF DERIVATIVE TRANSACTIONS IN THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCTOBER 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Unrealized Unrealized
appreciation on depreciation on
Credit contracts swap transactions $48,436 swap transactions $ 266,194
Premiums paid on
outstanding credit
default swap
contracts (217,758)
- -------------------------------------------------------------------------------------------
Total $48,436 $ 48,436
- -------------------------------------------------------------------------------------------
</Table>
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED OCTOBER 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ------------------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS SWAPS TOTAL
- ------------------------------------------------------------------------------
Credit contracts $ -- $(89,634) $ (89,634)
- ------------------------------------------------------------------------------
Foreign exchange contracts (36,522) -- $ (36,522)
- ------------------------------------------------------------------------------
Total $(36,522) $(89,634) $(126,156)
- ------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN
INCOME
- -----------------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS SWAPS TOTAL
- -----------------------------------------------------------------------------
Credit contracts $-- $83,501 $83,501
- -----------------------------------------------------------------------------
Foreign exchange contracts -- -- $ --
- -----------------------------------------------------------------------------
Total $-- $83,501 $83,501
- -----------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At October 31, 2010, the Fund had no outstanding forward foreign currency
exchange contracts. The monthly average gross notional amount of forward foreign
currency exchange contracts opened, and subsequently closed was $710,068 for the
year ended October 31, 2010.
- --------------------------------------------------------------------------------
44 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SWAPS
The gross notional amount of contracts outstanding was $4.0 million at October
31, 2010. The monthly average gross notional amount for these contracts was $4.0
million for the year ended October 31, 2010. The fair value of such contracts at
October 31, 2010 is set forth in the table above.
DELAYED DELIVERY SECURITIES & FORWARD SALE COMMITMENTS
The Fund 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 within
its portfolio of investments cash or liquid securities in an amount equal to the
delayed delivery commitment.
The Fund may enter into forward sale commitments to hedge its portfolio
positions or to sell mortgage-backed securities it owns under delayed delivery
arrangements. Proceeds of forward sale commitments are not received until the
contractual settlement date. While a forward sale commitment is outstanding,
equivalent deliverable securities or an offsetting forward purchase commitment
deliverable on or before the sale commitment date, are used to satisfy the
commitment.
Unsettled forward sale commitments are valued at the current market value of the
underlying securities, generally according to the procedures described under
"Valuation of securities" above. The forward sale commitment is "marked-to-
market" daily and the change in market value is recorded by the Fund as an
unrealized gain or loss. If the forward sale commitment is closed through the
acquisition of an offsetting purchase commitment, the Fund realizes a gain or
loss. If the Fund delivers securities under the commitment, the Fund realizes a
gain or a loss from the sale of the securities based upon the market price
established at the date the commitment was entered into.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's Investment Manager has determined are creditworthy. The Fund, through
its custodian, receives delivery of the underlying securities collateralizing a
repurchase agreement. The Investment Manager is responsible for determining that
the 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 in or restrictions on 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.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
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.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Market premium and discount
are amortized and accreted, respectively, on all debt securities, unless
otherwise noted. Original issue discount is accreted to interest income over the
life of the security with a corresponding increase in the cost basis, if any.
For convertible securities, premiums attributable to the conversion feature are
not amortized.
EXPENSES
General expenses of the Corporation are allocated to the Fund and other funds of
the Corporation based upon relative net assets or other expense allocation
methodologies determined by the nature of the expense. Expenses directly
attributable to the Fund are charged to the Fund.
DETERMINATION OF CLASS NET ASSET VALUE
All income, expenses (other than class-specific expenses, which are charged to
that share class, as shown in 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 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.
FOREIGN TAX
The Fund may be subject to foreign taxes on income, gains on investments or
currency repatriation, a portion of which may be recoverable. The Fund will
accrue such taxes and recoveries, as applicable, based upon its current
interpretation of tax rules and regulations that exist in the markets in which
it invests.
- --------------------------------------------------------------------------------
46 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Realized gains in certain countries may be subject to foreign taxes at the Fund
level, at rates ranging from approximately 10% to 15%. The Fund accrues for such
foreign taxes on net realized and unrealized gains at the appropriate rate for
each jurisdiction.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income are declared and paid monthly. Net
realized capital gains, if any, are distributed along with the income dividend.
Income distributions and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from GAAP.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT MANAGEMENT FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 0.72% to 0.52% as the Fund's net assets increase. The
management fee for the year ended October 31, 2010 was 0.72% of the Fund's
average daily net assets.
ADMINISTRATION FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended October 31, 2010 was
0.08% of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
administrative services to the Fund and the Board. For the year ended October
31, 2010, other expenses paid to this company were $483.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENT FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to September 7, 2010, the Transfer Agent received annual account-based
service fees from Class A, Class B and Class C shares which amount varied by
class, and annual asset-based service fees based on the Fund's average daily net
assets attributable to Class R4 and Class W shares, which amount varied by
class. In addition the Transfer Agent charged an annual fee per inactive account
and received reimbursement from the Fund for certain out-of-pocket expenses.
Under a new Transfer Agency Agreement effective September 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services (BFDS) to serve as sub-
transfer agent. The Transfer Agent receives monthly account-based service fees
based on the number of open accounts and is reimbursed by the Fund for the fees
and expenses the Transfer Agent pays to financial intermediaries that maintain
omnibus accounts with the Fund subject to an annual limitation (that varies by
class) that is a percentage of the average aggregate value of the Fund's shares
maintained in each such omnibus account (other than omnibus accounts for which
American Enterprise Investment Services, Inc. is the broker of record or
accounts where the beneficial shareholder is a customer of Ameriprise Financial
Services, Inc., which are paid a per account fee). The Transfer Agent pays the
fees of BFDS for services as sub-transfer agent and is not entitled to
reimbursement for such fees from the Fund.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account (IRA)
trustee agent fees and account transcript fees due to the Transfer Agent from
- --------------------------------------------------------------------------------
48 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For year ended October 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.18%
Class B.............................................. 0.20
Class C.............................................. 0.19
Class R4............................................. 0.07
Class W.............................................. 0.20
Class Z.............................................. 0.05*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
PLAN ADMINISTRATION FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares (of which up to 0.25% may be used for shareholder services) and a
fee at an annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class B and Class C shares. For Class B and Class C shares, of
the 1.00% fee, up to 0.75% is reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $107,000 and $52,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of July 31, 2010, and may be recovered from
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $199,954 for Class A, $1,584 for Class B and
$1,654 for Class C for the year ended October 31, 2010.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended October 31, 2010, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*), were as follows:
<Table>
Class A.............................................. 1.31%
Class B.............................................. 2.08
Class C.............................................. 2.06
Class I.............................................. 0.92
Class R4............................................. 1.22
Class W.............................................. 1.37
Class Z.............................................. 0.97
</Table>
The waived/reimbursed fees and expenses for the transfer agent fees at the class
level were as follows:
<Table>
Class A............................................ $21,328
Class B............................................ 1,348
Class C............................................ 618
Class W............................................ 9
</Table>
The management fees waived/reimbursed at the Fund level were $11,400.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and expenses until December 31, 2010, unless sooner terminated at
the sole discretion of the Board, such that net expenses (excluding fees and
expenses of acquired funds*), will not exceed the following percentage of the
class' average daily net assets:
<Table>
Class A.............................................. 1.31%
Class B.............................................. 2.08
Class C.............................................. 2.07
Class I.............................................. 0.92
Class R4............................................. 1.22
Class W.............................................. 1.37
Class Z.............................................. 1.06
</Table>
Effective January 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
December 31, 2011, unless sooner terminated at the sole discretion of the Board,
- --------------------------------------------------------------------------------
50 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
such that net expenses (excluding fees and expenses of acquired funds*), will
not exceed the following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.28%
Class B.............................................. 2.03
Class C.............................................. 2.03
Class I.............................................. 0.83
Class R4............................................. 1.13
Class W.............................................. 1.28
Class Z.............................................. 1.03
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
NOTE 4. PORTFOLIO INFORMATION
The cost of purchases and proceeds from sales of securities, excluding short-
term obligations, aggregated $87,504,965 and $135,844,180, respectively, for the
year ended October 31, 2010.
NOTE 5. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At October 31, 2010,
securities valued at $6,586,271 were on loan, secured by cash collateral of
$6,724,300 partially or fully invested in short-term securities or other cash
equivalents.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$5,036 earned from securities lending for the year ended October 31, 2010, is
included in the Statement of Operations. The Fund continues to earn and accrue
interest and dividends on the securities loaned.
NOTE 6. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balances in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use by the Fund and other affiliated Funds. The
income earned by the Fund from such investments is included as "Dividends from
affiliates" in the Statement of Operations. As an investing fund, the Fund
indirectly bears its proportionate share of the expenses of Columbia Short-Term
Cash Fund.
NOTE 7. SHAREHOLDER CONCENTRATION
At October 31, 2010, the Investment Manager along with affiliated funds-of-funds
owned approximately 33% of the outstanding shares of the Fund. Purchase and
redemption activity of these accounts may have a significant effect on the
operations of the Fund.
At October 31, 2010, the Investment Manager along with affiliated funds-of-funds
owned 100% of Class I shares.
NOTE 8. LINE OF CREDIT
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for
- --------------------------------------------------------------------------------
52 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
other temporary or emergency purposes. The credit facility became effective on
October 14, 2010, replacing a prior credit facility. The credit facility
agreement, which is a collective agreement between the Fund and certain other
funds managed by the Investment Manager, severally and not jointly, permits
collective borrowings up to $300 million. The borrowers shall have the right,
upon written notice to the Administrative Agent, to request an increase of up to
$200 million in the aggregate amount of the credit facility from new or existing
lenders, provided that the aggregate amount of the credit facility shall at no
time exceed $500 million. Participation in such increase by any existing lender
shall be at such lender's sole discretion. Interest is charged to each fund
based on its borrowings at a rate equal to the sum of the federal funds rate
plus (i) 1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds
rate, the amount of such excess. Each borrowing under the credit facility
matures no later than 60 days after the date of borrowing. The Fund also pays a
commitment fee equal to its pro rata share of the amount of the credit facility
at a rate of 0.10% per annum.
Prior to October 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended October 31, 2010.
NOTE 9. 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 October 31, 2010, permanent and timing book to tax
differences resulting primarily from differing treatments for foreign currency
transactions, recognition of unrealized appreciation (depreciation) for certain
derivative investments, foreign tax credits and losses deferred due to wash
sales were identified and permanent differences reclassed among the components
of the Fund's net assets in the Statement of Assets and Liabilities as follows:
<Table>
Undistributed net investment income............... $ 360,173
Accumulated net realized loss..................... (360,173)
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
Net investment income and net realized gains (losses), as disclosed in the
Statement of Operations, and net assets were not affected by this
reclassification.
The tax character of distributions paid during the years indicated was as
follows:
<Table>
<Caption>
YEAR ENDED OCTOBER 31, 2010 2009
- ------------------------------------------------------------------
Ordinary income......................... $16,449,004 $10,101,827
Long-term capital gain.................. -- --
</Table>
At October 31, 2010, the components of distributable earnings on a tax basis
were as follows:
<Table>
Undistributed ordinary income.................... $ 1,753,343
Undistributed accumulated long-term gain......... $ --
Accumulated realized loss........................ $(5,545,654)
Unrealized appreciation (depreciation)........... $28,577,615
</Table>
At October 31, 2010, the cost of investments for federal income tax purposes was
$209,142,564 and the aggregate gross unrealized appreciation and depreciation
based on that cost was:
<Table>
<Caption>
Unrealized appreciation $30,559,279
Unrealized depreciation (2,003,727)
- --------------------------------------------------------------
Net unrealized appreciation $28,555,552
</Table>
The following capital loss carryforwards, determined at October 31, 2010, 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:
<Table>
<Caption>
YEAR OF EXPIRATION AMOUNT
- -------------------------------------------------------------
2017............................................. $5,545,654
</Table>
For the year ended October 31, 2010, $11,611,371 of capital loss carryforward
was utilized. It is unlikely the Board will authorize a distribution of any net
realized capital gains until the available capital loss carryforward has been
offset or expires. There is no assurance that the Fund will be able to utilize
all of its capital loss carryforward before it expires.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. However,
management's conclusion may be subject to review and adjustment at a later date
based on factors including, but not limited to, new tax laws, regulations, and
administrative interpretations (including relevant court decisions). The Fund's
federal tax returns for the prior three fiscal years remain subject to
examination by the Internal Revenue Service.
- --------------------------------------------------------------------------------
54 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTE 10. SIGNIFICANT RISKS
NON-DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. Because each
investment has a greater effect on the Fund's performance, the Fund may be more
exposed to the risks of loss and volatility than a fund that invests more
broadly.
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
NOTE 11. SUBSEQUENT EVENTS
Management has evaluated the events and transactions that have occurred through
the date the financial statements were issued and noted no items requiring
adjustment of the financial statements or additional disclosure.
NOTE 12. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 55
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OCTOBER 31, 2010
August 6, 2009, defendants filed a writ of certiorari with the U.S. Supreme
Court (the Supreme Court), asking the Supreme Court to stay the District Court
proceedings while the Supreme Court considers and rules in a case captioned
Jones v. Harris Associates, which involves issues of law similar to those
presented in the Gallus case. On March 30, 2010, the Supreme Court issued its
ruling in Jones v. Harris Associates, and on April 5, 2010, the Supreme Court
vacated the Eighth Circuit's decision in the Gallus case and remanded the case
to the Eighth Circuit for further consideration in light of the Supreme Court's
decision in Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit
remanded the Gallus case to the District Court for further consideration in
light of the Supreme Court's decision in Jones v. Harris Associates. On December
9, 2010, the District Court reinstated its July 9, 2007 summary judgement order
in favor of the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and
- --------------------------------------------------------------------------------
56 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Exchange Commission on legal and regulatory matters that relate to Ameriprise
Financial and its affiliates. Copies of these filings may be obtained by
accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 57
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA EMERGING MARKETS BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Emerging Markets Bond Fund (formerly
known as RiverSource Emerging Markets Fund) (the Fund) (one of the portfolios
constituting the RiverSource Global Series, Inc.) as of October 31, 2010, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the four years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights of the Fund for the period ended October 31, 2006, were audited by
other auditors whose report dated December 20, 2006, expressed an unqualified
opinion on those financial highlights.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
58 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Columbia Emerging Markets Bond Fund of the RiverSource Global
Series, Inc. at October 31, 2010, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 59
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended October 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 0.00%
Dividends Received Deduction for corporations................ 0.00%
U.S. Government Obligations.................................. 0.00%
Foreign Taxes Paid........................................... $19,848
Foreign Source Income........................................ $2,547,341
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
60 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 61
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
62 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 63
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
64 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT 65
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
66 COLUMBIA EMERGING MARKETS BOND FUND -- 2010 ANNUAL REPORT
COLUMBIA EMERGING MARKETS BOND FUND
(formerly known as RiverSource Emerging Markets Bond Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6398 G (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA
EMERGING MARKETS OPPORTUNITY FUND
(FORMERLY KNOWN AS THREADNEEDLE EMERGING MARKETS FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND SEEKS TO PROVIDE SHAREHOLDERS WITH
LONG-TERM CAPITAL GROWTH.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 6
The Fund's Long-term Performance... 12
Fund Expenses Example.............. 14
Portfolio of Investments........... 17
Statement of Assets and
Liabilities...................... 27
Statement of Operations............ 29
Statements of Changes in Net
Assets........................... 30
Financial Highlights............... 32
Notes to Financial Statements...... 41
Report of Independent Registered
Public Accounting Firm........... 59
Federal Income Tax Information..... 61
Board Members and Officers......... 62
Proxy Voting....................... 67
</Table>
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Emerging Markets Opportunity Fund (the Fund) Class A shares gained
26.70% (excluding sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) Emerging Markets Index (MSCI Index), which advanced 23.89% for the 12-
month period.
> The Fund also outperformed its peer group, as represented by the Lipper
Emerging Markets Funds Index, which increased 26.39% for the same period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------
Columbia Emerging Markets
Opportunity Fund Class A
(excluding sales charge) +26.70% -5.85% +14.12% +12.89%
- --------------------------------------------------------------------
MSCI Index (unmanaged) +23.89% -3.70% +15.28% +14.96%
- --------------------------------------------------------------------
Lipper Emerging Markets Funds
Index (unmanaged) +26.39% -4.75% +13.27% +14.06%
- --------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
Class A (inception
11/13/96) +26.70% -5.85% +14.12% +12.89% N/A
- -------------------------------------------------------------------------
Class B (inception
11/13/96) +25.82% -6.55% +13.27% +12.04% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +25.67% -6.57% +13.27% +12.05% N/A
- -------------------------------------------------------------------------
Class I (inception
3/4/04) +27.45% -5.35% +14.69% N/A +15.11%
- -------------------------------------------------------------------------
Class R** (inception
8/3/09) +26.36% N/A N/A N/A +24.86%
- -------------------------------------------------------------------------
Class R4 (inception
11/13/96) +26.99% -5.51% +14.44% +13.17% N/A
- -------------------------------------------------------------------------
Class R5 (inception
08/1/08) +27.36% N/A N/A N/A +4.39%
- -------------------------------------------------------------------------
Class W (inception
09/27/10) N/A N/A N/A N/A +5.63%***
- -------------------------------------------------------------------------
Class Z (inception
09/27/10) N/A N/A N/A N/A +5.63%***
- -------------------------------------------------------------------------
With sales charge
Class A (inception
11/13/96) +19.42% -7.69% +12.77% +12.23% N/A
- -------------------------------------------------------------------------
Class B (inception
11/13/96) +20.82% -7.28% +13.03% +12.04% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +24.67% -6.57% +13.27% +12.05% N/A
- -------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R, Class R4, Class R5, Class W and Class
Z shares. Class I, Class R, Class R4 and Class R5 shares are available to
qualifying institutional investors only. Class W shares are offered through
qualifying discretionary accounts. Class Z shares are available to certain
eligible investors.
*For classes with less than 10 years performance.
**Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
***Not annualized.
- --------------------------------------------------------------------------------
4 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
MORNINGSTAR STYLE BOX(TM)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity Style
Value Blend Growth
X Large
Medium Size
Small
</Table>
The Morningstar Style Box(TM) is based on the fund's portfolio holdings as of
period end. The vertical axis shows the market capitalization of the stocks
owned, and the horizontal axis shows investment style (value, blend, or growth).
Information shown is based on the most recent data provided by Morningstar.
(C)2010 Morningstar, Inc. All rights reserved. The information contained herein
is proprietary to Morningstar and/or its content providers, may not be copied or
distributed and is not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no guarantee of
future results.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
Effective Sept. 27, 2010, Threadneedle Emerging Markets Fund was renamed
Columbia Emerging Markets Opportunity Fund. Effective September 2010, Vanessa
Donegan and Rafael Polatinsky assumed day-to-day management of the Fund.
Threadneedle International Limited (Threadneedle) an affiliate of the Investment
Manager, and an indirect wholly-owned subsidiary of Ameriprise Financial, Inc.,
is the subadviser to the Fund.
Dear Shareholders,
Columbia Emerging Markets Opportunity Fund Class A shares gained 26.70%
(excluding sales charge) for the 12 months ended Oct. 31, 2010. The Fund
outperformed its benchmark, the Morgan Stanley Capital
COUNTRY BREAKDOWN(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Brazil 18.2%
- ------------------------------------------------
China 14.5%
- ------------------------------------------------
Egypt 0.5%
- ------------------------------------------------
Hong Kong 2.7%
- ------------------------------------------------
Hungary 1.0%
- ------------------------------------------------
India 7.9%
- ------------------------------------------------
Indonesia 4.2%
- ------------------------------------------------
Luxembourg 1.2%
- ------------------------------------------------
Malaysia 1.9%
- ------------------------------------------------
Mexico 3.8%
- ------------------------------------------------
Poland 1.3%
- ------------------------------------------------
Russia 7.0%
- ------------------------------------------------
South Africa 7.1%
- ------------------------------------------------
South Korea 12.6%
- ------------------------------------------------
Taiwan 8.7%
- ------------------------------------------------
Thailand 2.1%
- ------------------------------------------------
Turkey 2.4%
- ------------------------------------------------
United Kingdom 1.2%
- ------------------------------------------------
United States 1.2%
- ------------------------------------------------
Other(2) 0.5%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
6 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
International (MSCI) Emerging Markets Index (MSCI Index), which advanced 23.89%
for the same period. The Fund's peer group, the Lipper Emerging Markets Funds
Index, gained 26.39% for the same period.
SIGNIFICANT PERFORMANCE FACTORS
The emerging equity markets were collectively very strong performers for the
past year, particularly in U.S. dollar terms. Fears of a double-dip global
recession negatively affected these markets at mid-year, but emerging market
equities rallied strongly during the final months of the period as recession
fears eased and global risk appetite recovered. Economic data from China suggest
increased likelihood of a soft landing there, while other major economies such
as Brazil and India continue to deliver healthy growth. During the period,
emerging market equities received significant foreign fund inflows from
investors attracted by robust growth and relatively healthy fundamentals.
The Fund benefited from an emphasis on strongly performing Brazil, an overweight
in South Africa and an underweight in China. Conversely, having larger-than-
benchmark positions in Hungary and Russia detracted from relative return. Stock
selection in Russia was quite strong. Positioning in the consumer discretionary
sector was a significant driver
TOP TEN HOLDINGS(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Vale SA, ADR (Brazil) 3.2%
- ------------------------------------------------
Petroleo Brasileiro SA, ADR (Brazil) 2.6%
- ------------------------------------------------
Samsung Electronics Co., Ltd. (South
Korea) 2.5%
- ------------------------------------------------
China Construction Bank Corp., Series H
(China) 2.1%
- ------------------------------------------------
Sberbank of Russia (Russia) 2.0%
- ------------------------------------------------
Itau Unibanco Holding SA, ADR (Brazil) 1.9%
- ------------------------------------------------
Hon Hai Precision Industry Co., Ltd.
(Taiwan) 1.7%
- ------------------------------------------------
America Movil SAB de CV, Series L, ADR
(Mexico) 1.6%
- ------------------------------------------------
OGX Petroleo e Gas Participacoes SA
(Brazil) 1.5%
- ------------------------------------------------
Taiwan Semiconductor Manufacturing Co.,
Ltd. (Taiwan) 1.4%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
of the Fund's favorable results. Specifically, the portfolio had meaningful
holdings of consumer discretionary stocks in Brazil. The Fund had a larger-than-
benchmark weighting in consumer discretionary stocks throughout the year and
this sector performed very well, benefiting from healthy local demand.
CHANGES TO THE FUND'S PORTFOLIO
Over the course of the year, the Fund's weightings in the industrials, materials
and consumer discretionary sectors increased. We potentially see attractive
opportunities in these sectors if increased infrastructure spending and strong
consumer demand continue to drive earnings higher. Weightings in the energy,
telecommunication services and consumer staples sectors decreased.
From a geographic allocation perspective, over the course of the year, the
Fund's weightings in Hong Kong and Brazil were reduced. Toward the end of the
period, we added to the Fund's holdings in Asia. Economic data coming out of
China have improved, enhancing our overall outlook for Asian equities. China has
managed to slow its economy without a recession, a positive for the entire
region because so many countries have trade surpluses with China. We believe
that as long as China is growing, interregional trade should remain strong. We
added to the Fund's holdings in China, India, and a little bit in Korea. In
Korea, we avoided technology stocks, but found opportunities among industrial
stocks that can benefit from activity in China. We funded the increase in Asia
by taking some profits in Russia and Mexico, following strong relative
performance.
OUR FUTURE STRATEGY
As of Oct. 31, 2010, the Fund's allocation to Latin America is larger than that
of the MSCI Index, with the primary emphasis on Brazil. The Fund's weighting in
Russia is also larger than that of the MSCI Index. The Asian weighting is
smaller than that of the MSCI Index, but larger than it was at the beginning of
the fiscal year. Within Asia, the Fund is underweight in Taiwan, Malaysia, China
and Korea, relative to the MSCI Index, while its weighting in Indonesia is
larger and its allocation to India is about equal to the index.
In terms of sector weightings, the Fund's consumer discretionary and financials
weightings are larger than those of the MSCI Index, with the
- --------------------------------------------------------------------------------
8 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
overweight in consumer discretionary still concentrated mainly in Brazil. Within
financials, the Fund has emphasis on banks in Indonesia, Brazil, Hungary, Turkey
and Mexico, while de-emphasizing insurance, diversified financial companies and
real estate. We see emerging market banks as a way to attempt to capitalize on
increased consumer spending in emerging countries.
The Fund's weightings in telecommunications services, utilities, energy and
consumer staples are smaller than those of the MSCI Index. A key reason for the
energy underweight is that we have not found compelling opportunities among
Russian oil stocks. Telecommunications, utilities and consumer staples are more
defensive sectors that tend to outperform when things aren't going so well. Now
that investors' risk appetite has improved and we're seeing earnings upgrades
across the emerging markets, we are less optimistic about the growth of these
sectors.
China is evolving from a source of cheap labor toward a goal of being a world
class manufacturing economy. This requires greater emphasis on areas such as
automation and alternative energy. We have focused on companies across the
emerging markets that we believe can benefit from this evolution. For example,
Brazil now exports substantial amounts to China. In fact, Latin America is a
major beneficiary of growth in Asia. We think it can be more productive to tap
into the China growth theme through stocks in other regions, which may be more
reasonably priced than Chinese stocks.
We believe strong consumer demand will continue to drive economic growth in the
emerging markets.
The Fund will continue to invest in companies that we believe may benefit from
consumer demand trends and in companies that can benefit from rising
infrastructure spending.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
In general, emerging market countries have low ratios of debt compared to gross
domestic product, emerging market consumers tend to have low personal debt and
many emerging economies have healthy banking sectors. All of these support
healthy domestic and intra-regional demand. The Fund will continue to invest in
companies that we believe may benefit from consumer demand trends and in
companies that can benefit from rising infrastructure spending.
<Table>
Vanessa Donegan Rafael Polatinsky, CFA(R)
Portfolio Manager Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
10 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Emerging Markets Opportunity Fund Class A shares (from
11/1/00 to 10/31/10) as compared to the performance of the Morgan Stanley
Capital International (MSCI) Emerging Markets Index and the Lipper Emerging
Markets Funds Index. In comparing the Fund's Class A shares to these indices,
you should take into account the fact that the Fund's performance reflects the
maximum initial sales charge of 5.75%, while such charges are not reflected in
the performance of the indices. Returns for the Fund include the reinvestment of
any distributions paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $11,942 $7,866 $18,241 $31,688
- ------------------------------------------------------------------------------------------
Average annual total return +19.42% -7.69% +12.77% +12.23%
- ------------------------------------------------------------------------------------------
MSCI EMERGING MARKETS INDEX(1)
Cumulative value of $10,000 $12,389 $8,930 $20,356 $40,306
- ------------------------------------------------------------------------------------------
Average annual total return +23.89% -3.70% +15.28% +14.96%
- ------------------------------------------------------------------------------------------
LIPPER EMERGING MARKETS FUNDS INDEX(2)
Cumulative value of $10,000 $12,639 $8,641 $18,645 $37,271
- ------------------------------------------------------------------------------------------
Average annual total return +26.39% -4.75% +13.27% +14.06%
- ------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA EMERGING MARKETS
OPPORTUNITY FUND LINE GRAPH)
<Table>
<Caption>
COLUMBIA EMERGING
MARKETS OPPORTUNITY
FUND CLASS LIPPER EMERGING
A (INCLUDES MSCI EMERGING MARKETS FUNDS
SALES CHARGE) MARKETS INDEX(1) INDEX(2)
------------------- ---------------- ------------------
11/1/00 $ 9,425 $10,000 $10,000
9,621 10,632 10,516
8,269 9,274 9,224
7,857 8,611 8,735
10/01 7,230 7,653 7,779
8,720 9,433 9,453
9,249 10,230 10,319
7,916 8,604 8,768
10/02 7,838 8,299 8,333
8,034 8,539 8,624
7,857 8,792 8,934
9,033 10,583 10,519
10/03 10,698 12,345 12,364
12,003 13,878 14,003
11,687 13,503 13,659
11,113 13,062 13,263
10/04 12,420 14,740 15,032
14,165 16,934 17,172
13,986 16,749 16,915
15,897 19,206 19,260
10/05 16,374 19,802 19,988
21,274 25,262 25,311
22,789 27,281 27,311
20,517 24,742 24,708
10/06 22,571 26,815 26,905
25,354 29,800 29,834
26,847 32,250 32,134
29,835 37,346 36,313
10/07 37,965 45,137 43,131
31,245 36,850 36,334
33,442 40,541 38,888
29,338 35,818 34,288
10/08 16,028 19,762 18,795
14,380 18,442 16,884
17,837 23,224 20,959
23,200 29,882 27,293
10/09 25,010 32,536 29,487
25,578 33,317 30,398
28,437 36,588 33,429
28,568 35,930 33,115
10/10 31,688 40,306 37,271
</Table>
(1) The Morgan Stanley Capital International (MSCI) Emerging Markets Index, an
unmanaged market capitalization-weighted index, is designed to measure
equity market performance in the global emerging markets. The index reflects
reinvestment of all distributions and changes in market prices.
(2) The Lipper Emerging Markets Funds Index includes the 30 largest emerging
markets funds tracked by Lipper Inc. The index's returns include net
reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,114.30 $10.38(d) 1.97%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,015.11 $ 9.90(d) 1.97%(d)
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,110.50 $14.42(d) 2.74%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,011.27 $13.74(d) 2.74%(d)
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,109.50 $14.36(d) 2.73%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,011.32 $13.69(d) 2.73%(d)
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,117.80 $ 7.76(d) 1.47%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.60 $ 7.39(d) 1.47%(d)
- -------------------------------------------------------------------------------------------
Class R
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,113.50 $11.80(d) 2.24%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.76 $11.25(d) 2.24%(d)
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,116.60 $ 9.45(d) 1.79%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.01 $ 9.00(d) 1.79%(d)
- -------------------------------------------------------------------------------------------
Class R5
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,117.60 $ 8.18(d) 1.55%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.20 $ 7.80(d) 1.55%(d)
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,056.30 $ 1.70(d) 1.89%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,015.51 $ 9.50(d) 1.89%(d)
- -------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 15
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class Z
- -------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,056.30 $ 1.41 1.56%
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.15 $ 7.85 1.56%
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account values for Class W and Class Z are as of Sept. 27,
2010 (when shares became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class W and Class Z are equal to the annualized expense ratio for the
class as indicated above, multiplied by the average account value over the
period, multiplied by 32/365 (to reflect the number of days in the period).
(c) Based on the actual return for the six months ended Oct. 31, 2010: +11.43%
for Class A, +11.05% for Class B, +10.95% for Class C, +11.78% for Class I,
+11.35% for Class R, +11.66% for Class R4 and +11.76% for Class R5.
(d) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until Dec. 31, 2011, unless sooner terminated at the sole discretion of the
Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 1.85% for Class A, 2.60% for Class B, 2.60% for
Class C, 1.41% for Class I, 2.10% for Class R, 1.71% for Class R4, 1.46% for
Class R5, 1.85% for Class W and 1.60% for Class Z. Any amounts waived will
not be reimbursed by the Fund. This change is effective Jan. 1, 2011. Had
this change been in place for the entire six month period ended Oct. 31,
2010, the actual expenses paid would have been $9.86 for Class A, $13.73 for
Class B, $13.78 for Class C, $7.55 for Class I, $11.17 for Class R, $9.13
for Class R4, $7.81 for Class R5 and $1.67 for Class W; the hypothetical
expenses paid would have been $9.40 for Class A, $13.09 for Class B, $13.14
for Class C, $7.19 for Class I, $10.65 for Class R, $8.70 for Class R4,
$7.44 for Class R5 and $9.30 for Class W. The actual and hypothetical
expenses paid for Class Z would have been the same as those expenses
presented in the table above.
(e) Based on the actual return for the period from Sept. 27, 2010 (when shares
became available) to Oct. 31, 2010: +5.63% for Class W and +5.63% for Class
Z.
- --------------------------------------------------------------------------------
16 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS ------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (96.7%)(c)
ISSUER SHARES VALUE(a)
BRAZIL (16.5%)
Anhanguera Educacional Participacoes SA Unit 360,000 $7,035,555
Banco Santander Brasil SA, ADR 688,099 9,908,626
BM&FBovespa SA 1,046,900 8,738,546
Fibria Celulose SA, ADR 364,486(b) 6,546,169
Itau Unibanco Holding SA, ADR 536,586 13,178,552
Localiza Rent a Car SA 424,903 7,040,864
Lojas Renner SA 218,000 8,656,864
MRV Engenharia e Participacoes SA 469,400 4,572,975
OGX Petroleo e Gas Participacoes SA 800,700(b) 10,477,726
Petroleo Brasileiro SA, ADR 523,794 17,871,851
Vale SA, ADR 676,756 21,750,938
---------------
Total 115,778,666
- -------------------------------------------------------------------------------------
CHINA (14.3%)
Bank of China Ltd., Series H 12,124,000(e) 7,257,820
China Construction Bank Corp., Series H 14,944,000 14,247,988
China National Building Material Co., Ltd.,
Series H 1,440,000 3,511,289
China Shenhua Energy Co., Ltd., Series H 1,245,500 5,543,769
China Yurun Food Group Ltd. 1,483,000 5,768,604
CNOOC Ltd. 2,488,000 5,155,113
CNOOC Ltd., ADR 39,726 8,299,555
Dongfang Electric Corp., Ltd., Series H 978,800 4,760,774
Dongfeng Motor Group Co., Ltd., Series H 3,318,000 7,191,640
Hengan International Group Co., Ltd. 462,000 4,351,180
Industrial & Commercial Bank of China,
Series H 10,116,000 8,143,960
New Oriental Education & Technology Group,
ADR 58,295(b) 6,259,134
PetroChina Co., Ltd., Series H 4,178,000 5,099,198
Ping An Insurance Group Co. of China Ltd.,
Series H 662,500 7,132,709
Tencent Holdings Ltd. 341,800 7,827,313
---------------
Total 100,550,046
- -------------------------------------------------------------------------------------
EGYPT (0.5%)
Orascom Construction Industries, GDR 68,351(d) 3,164,651
- -------------------------------------------------------------------------------------
HONG KONG (2.7%)
Agile Property Holdings Ltd. 3,580,000 4,711,134
China High Speed Transmission Equipment Group
Co., Ltd. 2,407,000 4,918,963
China Mobile Ltd. 331,000 3,371,494
China Overseas Land & Investment Ltd. 2,859,797(e) 6,014,023
---------------
Total 19,015,614
- -------------------------------------------------------------------------------------
HUNGARY (1.0%)
OTP Bank PLC 234,246(b,e) 6,972,681
- -------------------------------------------------------------------------------------
INDIA (7.8%)
Bharat Heavy Electricals Ltd. 120,394 6,627,564
Housing Development Finance Corp. 92,634 1,433,976
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
INDIA (CONT.)
ICICI Bank Ltd. 344,544 $9,019,801
Infosys Technologies Ltd. 101,202 6,769,656
Jaiprakash Associates Ltd. 1,767,488 4,784,253
Larsen & Toubro Ltd. 111,353 5,082,760
Maruti Suzuki India Ltd. 211,062 7,371,611
Reliance Industries Ltd. 278,120 6,863,006
State Bank of India 94,249 6,684,095
---------------
Total 54,636,722
- -------------------------------------------------------------------------------------
INDONESIA (4.1%)
Astra International Tbk PT 717,000 4,574,035
Bank Mandiri Tbk PT 6,656,500 5,214,941
Bank Rakyat Indonesia Persero Tbk PT 4,342,500 5,540,515
Bumi Resources Tbk PT 16,717,500 4,163,004
Indofood CBP Sukses Makmur TbK PT 7,140,500(b) 4,555,215
Semen Gresik Persero Tbk PT 4,243,000 4,653,766
---------------
Total 28,701,476
- -------------------------------------------------------------------------------------
LUXEMBOURG (1.2%)
Evraz Group SA, GDR 155,155(b,d) 4,704,300
Ternium SA, ADR 98,654 3,381,859
---------------
Total 8,086,159
- -------------------------------------------------------------------------------------
MALAYSIA (1.8%)
Axiata Group Bhd 2,878,800(b) 4,156,210
CIMB Group Holdings Bhd 1,300,800 3,467,406
Genting Bhd 1,587,800 5,330,107
---------------
Total 12,953,723
- -------------------------------------------------------------------------------------
MEXICO (3.8%)
America Movil SAB de CV, Series L, ADR 189,519 10,851,857
Bolsa Mexicana de Valores SAB de CV 213,600(e) 388,040
Grupo Financiero Banorte SAB de CV, Series O 1,371,600 5,868,859
Grupo Mexico SAB de CV, Series B 1,091,900 3,596,687
Wal-Mart de Mexico SAB de CV, Series V 2,091,500 5,725,589
---------------
Total 26,431,032
- -------------------------------------------------------------------------------------
POLAND (1.3%)
Bank Pekao SA 77,818 5,089,697
Powszechna Kasa Oszczednosci Bank Polski SA 232,618 3,674,979
---------------
Total 8,764,676
- -------------------------------------------------------------------------------------
RUSSIA (6.9%)
Eurasia Drilling Co., Ltd., GDR 236,717(d) 6,036,284
LSR Group, GDR 347,584(b,d) 2,954,464
Lukoil OAO, ADR 112,967 6,303,559
MMC Norilsk Nickel, ADR 349,517 6,537,715
Novolipetsk Steel OJSC, GDR 153,817(d) 5,265,156
Sberbank of Russia 4,095,427 13,572,245
X5 Retail Group NV, GDR 176,377(b,d) 7,390,196
---------------
Total 48,059,619
- -------------------------------------------------------------------------------------
SOUTH AFRICA (7.0%)
Impala Platinum Holdings Ltd. 153,997 4,357,347
Kumba Iron Ore Ltd. 94,730 5,387,847
Mr Price Group Ltd. 429,798 3,909,991
MTN Group Ltd. 318,035 5,726,512
Murray & Roberts Holdings Ltd. 603,720 3,744,294
Naspers Ltd., Series N 122,386 6,432,973
Shoprite Holdings Ltd. 369,891 5,234,092
Standard Bank Group Ltd. 633,681 9,354,395
Truworths International Ltd. 529,442 5,221,257
---------------
Total 49,368,708
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SOUTH KOREA (12.4%)
Hyundai Department Store Co., Ltd. 51,866 $5,739,429
Hyundai Engineering & Construction Co., Ltd. 99,984 6,691,787
Hyundai Mobis 35,496 8,833,932
Hyundai Motor Co. 66,158 9,996,497
Kangwon Land, Inc. 178,200 4,189,382
KB Financial Group, Inc. 70,791 3,146,043
LG Chem Ltd. 25,697 7,925,533
LG Electronics, Inc. 49,056 4,320,981
POSCO 15,221 6,250,313
Samsung Electronics Co., Ltd. 25,553 16,920,562
Samsung Engineering Co., Ltd. 39,822 6,353,370
Shinhan Financial Group Co., Ltd. 165,970 6,424,426
---------------
Total 86,792,255
- -------------------------------------------------------------------------------------
TAIWAN (8.6%)
Acer, Inc. 2,165,163 6,286,801
Cathay Financial Holding Co., Ltd. 3,032,700 4,640,624
Delta Electronics, Inc. 1,778,000 7,346,148
Hon Hai Precision Industry Co., Ltd. 3,041,196 11,522,316
MediaTek, Inc. 190,551 2,396,124
Synnex Technology International Corp. 1,818,569 4,448,862
Taiwan Semiconductor Manufacturing Co., Ltd. 4,831,858 9,910,856
Tripod Technology Corp. 1,936,766 7,432,799
Young Fast Optoelectronics Co., Ltd. 275,577 3,240,282
Yuanta Financial Holding Co., Ltd. 5,137,000 3,229,815
---------------
Total 60,454,627
- -------------------------------------------------------------------------------------
THAILAND (2.0%)
Bangkok Bank PCL 1,487,075 7,415,467
Siam Commercial Bank PCL 2,000,300 6,861,806
---------------
Total 14,277,273
- -------------------------------------------------------------------------------------
TURKEY (2.4%)
BIM Birlesik Magazalar AS 134,136 4,607,855
KOC Holding AS 1,454,179 6,851,062
Turkiye Garanti Bankasi AS 884,107 5,341,549
---------------
Total 16,800,466
- -------------------------------------------------------------------------------------
UNITED KINGDOM (1.2%)
Antofagasta PLC 401,488 8,503,948
- -------------------------------------------------------------------------------------
UNITED STATES (1.2%)
Southern Copper Corp. 198,071 8,477,439
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $559,517,254) $677,789,781
- -------------------------------------------------------------------------------------
<Caption>
PREFERRED STOCKS (1.5%)(c)
ISSUER SHARES VALUE(a)
BRAZIL
Itau Unibanco Holding SA 314,600 $7,611,290
Petroleo Brasileiro SA 170,200 2,593,877
- -------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost: $9,479,059) $10,205,167
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (0.5%)
SHARES VALUE(a)
Columbia Short-Term Cash Fund, 0.241% 3,749,862(f) $3,749,862
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $3,749,862) $3,749,862
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (1.9%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS(g)
Citigroup Global Markets, Inc.
dated 10-29-10, matures 11-01-10,
repurchase price
$4,000,077 0.230% $4,000,000 $4,000,000
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS (CONT.)
Deutsche Bank AG
dated 10-29-10, matures 11-01-10,
repurchase price
$4,581,429 0.230% $4,581,341 $4,581,341
Pershing LLC
dated 10-29-10, matures 11-01-10,
repurchase price
$5,000,133 0.320 5,000,000 5,000,000
---------------
Total 13,581,341
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $13,581,341) $13,581,341
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $586,327,516)(h) $705,326,151
=====================================================================================
</Table>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at Oct. 31, 2010:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(A)
- -----------------------------------------------------------------------
Auto Components 1.3% $8,833,932
Automobiles 4.1 29,133,783
Banking 1.1 7,611,290
Capital Markets 0.5 3,229,815
Chemicals 1.1 7,925,533
Commercial Banks 22.3 156,385,851
Computers & Peripherals 0.9 6,286,801
Construction & Engineering 3.6 25,036,862
Construction Materials 1.6 11,119,519
Diversified Consumer Services 1.9 13,294,689
Diversified Financial Services 1.3 9,126,586
Electrical Equipment 2.3 16,307,301
Electronic Equipment, Instruments &
Components 4.8 33,990,407
Energy Equipment & Services 0.9 6,036,284
Food & Staples Retailing 3.3 22,957,732
Food Products 1.5 10,323,819
Hotels, Restaurants & Leisure 1.4 9,519,489
Household Durables 1.3 8,893,956
Industrial Conglomerates 1.7 11,635,315
Insurance 1.7 11,773,333
Internet Software & Services 1.1 7,827,313
IT Services 1.0 6,769,656
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES
BY INDUSTRY (CONTINUED)
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(A)
- -----------------------------------------------------------------------
Media 0.9% $6,432,973
Metals & Mining 11.1 78,213,549
Multiline Retail 2.0 14,396,293
Oil Field Services 0.4 2,593,877
Oil, Gas & Consumable Fuels 9.9 69,776,781
Paper & Forest Products 0.9 6,546,169
Personal Products 0.6 4,351,180
Real Estate Management & Development 1.5 10,725,157
Road & Rail 1.0 7,040,864
Semiconductors & Semiconductor
Equipment 4.2 29,227,542
Specialty Retail 1.3 9,131,248
Thrifts & Mortgage Finance 0.2 1,433,976
Wireless Telecommunication Services 3.4 24,106,073
Other(1) 2.5 17,331,203
- -----------------------------------------------------------------------
Total $705,326,151
- -----------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
INVESTMENTS IN DERIVATIVES
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT OCT. 31, 2010
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
COUNTERPARTY EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- -----------------------------------------------------------------------------------------------------
Citibank Nov. 1, 2010 1,261,364 1,812,000
(USD) (TRY) $3,028 $--
Citibank Nov. 2, 2010 6,200,000 883,321
(ZAR) (USD) -- (2,684)
- -----------------------------------------------------------------------------------------------------
Total $3,028 $(2,684)
- -----------------------------------------------------------------------------------------------------
</Table>
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
TRY -- Turkish Lira
ZAR -- South African Rand
</Table>
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At Oct. 31, 2010,
the value of these securities amounted to $29,515,051 or 4.21% of net
assets.
(e) At Oct. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(f) Affiliated Money Market Fund - See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(g) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
CITIGROUP GLOBAL MARKETS, INC. (0.230%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Benchmark REMIC $22,607
Fannie Mae REMICS 1,330,720
Fannie Mae-Aces 29,414
Freddie Mac Reference REMIC 42,879
Freddie Mac REMICS 2,083,244
Government National Mortgage Association 571,136
- -----------------------------------------------------------
Total market value of collateral securities $4,080,000
- -----------------------------------------------------------
<Caption>
DEUTSCHE BANK AG (0.230%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Pool $4,672,967
- -----------------------------------------------------------
Total market value of collateral securities $4,672,967
- -----------------------------------------------------------
<Caption>
PERSHING LLC (0.320%)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Fannie Mae Pool $761,902
Fannie Mae REMICS 353,353
Fannie Mae Whole Loan 5,877
Federal Farm Credit Bank 179,064
Federal Home Loan Banks 65,292
Federal Home Loan Mortgage Corp 8,856
Federal National Mortgage Association 103,207
Freddie Mac Gold Pool 693,495
</Table>
- --------------------------------------------------------------------------------
22 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
PERSHING LLC (0.320%) (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
- -----------------------------------------------------------
Freddie Mac REMICS $425,825
Ginnie Mae I Pool 645,736
Ginnie Mae II Pool 579,428
Government National Mortgage Association 540,457
United States Treasury Inflation Indexed Bonds 9,752
United States Treasury Note/Bond 727,757
- -----------------------------------------------------------
Total market value of collateral securities $5,100,001
- -----------------------------------------------------------
</Table>
(h) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $592,479,655 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $119,491,013
Unrealized depreciation (6,644,517)
-----------------------------------------------------------
Net unrealized appreciation $112,846,496
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 23
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
24 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in valuations may include,
but are not limited to, financial statement analysis, capital account balances,
discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCT. 31, 2010
------------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS(B) INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------------------
Equity Securities
Common Stocks $677,789,781 $-- $-- $677,789,781
Preferred Stocks 10,205,167 -- -- 10,205,167
- -----------------------------------------------------------------------------------------------
Total Equity Securities 687,994,948 -- -- 687,994,948
- -----------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(c) 3,749,862 -- -- 3,749,862
Investments of Cash
Collateral Received
for Securities on
Loan -- 13,581,341 -- 13,581,341
- -----------------------------------------------------------------------------------------------
Total Other 3,749,862 13,581,341 -- 17,331,203
- -----------------------------------------------------------------------------------------------
Investments in Securities 691,744,810 13,581,341 -- 705,326,151
Derivatives(d)
Assets
Forward Foreign
Currency Exchange
Contracts -- 3,028 -- 3,028
Liabilities
Forward Foreign
Currency Exchange
Contracts -- (2,684) -- (2,684)
- -----------------------------------------------------------------------------------------------
Total $691,744,810 $13,581,685 $-- $705,326,495
- -----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) Includes certain securities trading outside the U.S. whose values were
adjusted at Oct. 31, 2009 as a result of significant market movements
following the close of local trading, and were classified as Level 2.
Values were not adjusted as of Oct. 31, 2010. Therefore, these investment
securities were classified as Level 1 instead of Level 2 at Oct. 31, 2010.
The amount of securities transferred out of Level 2 into Level 1 during the
period was $268,332,095. Transfers between Levels 1 and 2 are determined
based on the fair value at the beginning of the period for security
positions held throughout the period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Oct. 31, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 25
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
26 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $568,996,313) $687,994,948
Affiliated money market fund (identified cost $3,749,862) 3,749,862
Investments of cash collateral received for securities on loan
(identified cost $13,581,341) 13,581,341
- -------------------------------------------------------------------------------
Total investments in securities (identified cost $586,327,516) 705,326,151
Foreign currency holdings (identified cost $10,183,616) 10,052,560
Capital shares receivable 908,377
Dividends and accrued interest receivable 560,453
Receivable for investment securities sold 3,199,418
Unrealized appreciation on forward foreign currency exchange
contracts 3,028
- -------------------------------------------------------------------------------
Total assets 720,049,987
- -------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 1,283,236
Payable for investment securities purchased 3,757,867
Payable upon return of securities loaned 13,581,341
Unrealized depreciation on forward foreign currency exchange
contracts 2,684
Accrued investment management services fees 20,705
Accrued distribution fees 5,855
Accrued transfer agency fees 16,224
Accrued administrative services fees 1,504
Accrued plan administration services fees 10
Other accrued expenses 452,271
- -------------------------------------------------------------------------------
Total liabilities 19,121,697
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $700,928,290
- -------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 725,498
Additional paid-in capital 572,058,730
Undistributed net investment income 4,930,398
Accumulated net realized gain (loss) 4,348,096
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 118,865,568
- -------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $700,928,290
- -------------------------------------------------------------------------------
*Value of securities on loan $ 12,852,751
- -------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 27
STATEMENT OF ASSETS AND LIABILITIES (continued) -------------------------------
OCT. 31, 2010 (UNAUDITED)
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $523,288,192 53,653,023 $ 9.75(1)
Class B $ 37,312,287 4,319,656 $ 8.64
Class C $ 38,770,335 4,501,173 $ 8.61
Class I $ 84,278,781 8,306,376 $10.15
Class R $ 15,164,872 1,561,399 $ 9.71
Class R4 $ 1,402,320 138,188 $10.15
Class R5 $ 687,416 67,607 $10.17
Class W $ 2,641 271 $ 9.75
Class Z $ 21,446 2,114 $10.14
- ------------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.34. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS -------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 14,778,228
Interest 117,856
Income distributions from affiliated money market fund 19,826
Income from securities lending -- net 117,992
Foreign taxes withheld (1,451,529)
- --------------------------------------------------------------------------
Total income 13,582,373
- --------------------------------------------------------------------------
Expenses:
Investment management services fees 6,678,651
Distribution fees
Class A 1,147,121
Class B 397,712
Class C 344,726
Class R 65,971
Class W 1
Transfer agency fees
Class A 1,138,958
Class B 105,639
Class C 88,823
Class R 10,044
Class R4 689
Class R5 358
Administrative services fees 491,606
Plan administration services fees
Class R 27,446
Class R4 3,087
Compensation of board members 18,286
Custodian fees 468,000
Printing and postage 110,280
Registration fees 140,720
Professional fees 130,913
Other 345,964
- --------------------------------------------------------------------------
Total expenses 11,714,995
- --------------------------------------------------------------------------
Investment income (loss) -- net 1,867,378
- --------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions 130,106,440
Foreign currency transactions (79,437)
- --------------------------------------------------------------------------
Net realized gain (loss) on investments 130,027,003
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 16,283,884
- --------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 146,310,887
- --------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $148,178,265
- --------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 29
STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,867,378 $ 1,073,939
Net realized gain (loss) on investments 130,027,003 (79,169,258)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 16,283,884 239,320,659
- ----------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 148,178,265 161,225,340
- ----------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (2,568,740) --
Class B (19,695) --
Class C (193,813) --
Class I (693,406) --
Class R (97,017) --
Class R4 (8,976) --
Class R5 (5,301) --
- ----------------------------------------------------------------------------------------
Total distributions (3,586,948) --
- ----------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
30 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 85,282,805 $ 80,251,128
Class B shares 8,535,966 9,019,008
Class C shares 10,812,054 4,625,001
Class I shares 4,925,169 63,017,867
Class R shares 6,673,201 765,806
Class R4 shares 163,774 436,563
Class R5 shares 2,606 668
Class W shares 2,500 N/A
Class Z shares 21,403 N/A
Fund merger (Note 11)
Class A shares N/A 45,280,067
Class B shares N/A 2,387,255
Class C shares N/A 25,077,963
Class R shares N/A 12,517,198
Class R5 shares N/A 496,500
Reinvestment of distributions at net asset value
Class A shares 2,496,135 --
Class B shares 19,165 --
Class C shares 114,627 --
Class I shares 693,280 --
Class R shares 11,505 --
Class R4 shares 8,976 --
Class R5 shares 5,259 --
Conversions from Class B to Class A
Class A shares 8,787,572 6,661,382
Class B shares (8,787,572) (6,661,382)
Payments for redemptions
Class A shares (96,690,846) (95,511,753)
Class B shares (9,645,349) (8,184,934)
Class C shares (12,720,504) (4,011,594)
Class I shares (8,008,374) (7,237,209)
Class R shares (6,801,569) (1,958,447)
Class R4 shares (249,476) (397,068)
Class R5 shares (125) --
- ----------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (14,347,818) 126,574,019
- ----------------------------------------------------------------------------------------
Proceeds from regulatory settlements (Note 10) 203,460 458,466
- ----------------------------------------------------------------------------------------
Total increase (decrease) in net assets 130,446,959 288,257,825
Net assets at beginning of year 570,481,331 282,223,506
- ----------------------------------------------------------------------------------------
Net assets at end of year $700,928,290 $570,481,331
- ----------------------------------------------------------------------------------------
Undistributed net investment income $ 4,930,398 $ 582,060
- ----------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 31
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for periods shown. For periods ended 2007 and after, per share
net investment income (loss) amounts are calculated based on average shares
outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.74 $4.96 $14.99 $11.32 $8.23
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .02 .08 .04 .01
Net gains (losses) (both realized and
unrealized) 2.03 2.75 (7.24) 6.27 3.10
- ----------------------------------------------------------------------------------------------------------
Total from investment operations 2.06 2.77 (7.16) 6.31 3.11
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) -- (.18) -- (.02)
Distributions from realized gains -- -- (2.69) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.05) -- (2.87) (2.64) (.02)
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.75 $7.74 $4.96 $14.99 $11.32
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 26.70%(b) 56.05%(c) (57.79%) 68.21% 37.85%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.85% 1.90% 1.87% 1.83% 1.81%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .34% .38% .78% .31% .19%
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $523 $416 $250 $661 $425
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133% 125% 145%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
32 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.87 $4.43 $13.73 $10.63 $7.77
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.03) (.02) .00(a) (.05) (.05)
Net gains (losses) (both realized and
unrealized) 1.80 2.45 (6.53) 5.79 2.91
- ----------------------------------------------------------------------------------------------------------
Total from investment operations 1.77 2.43 (6.53) 5.74 2.86
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.00)(a) -- (.08) -- --
Distributions from realized gains -- -- (2.69) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.00)(a) -- (2.77) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.64 $6.87 $4.43 $13.73 $10.63
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 25.82%(b) 55.08%(c) (58.08%) 66.95% 36.81%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 2.60% 2.68% 2.62% 2.58% 2.57%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.42%) (.36%) .02% (.48%) (.55%)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $37 $38 $28 $94 $77
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133% 125% 145%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.89 $4.44 $13.78 $10.66 $7.79
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.03) (.04) .00(a) (.05) (.06)
Net gains (losses) (both realized and
unrealized) 1.79 2.48 (6.54) 5.81 2.93
- ----------------------------------------------------------------------------------------------------------
Total from investment operations 1.76 2.44 (6.54) 5.76 2.87
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) -- (.11) -- --
Distributions from realized gains -- -- (2.69) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.04) -- (2.80) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.61 $6.89 $4.44 $13.78 $10.66
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 25.67%(b) 55.18%(c) (58.15%) 67.03% 36.84%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 2.60% 2.60% 2.63% 2.59% 2.58%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.43%) (.65%) .03% (.48%) (.57%)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $39 $33 $3 $8 $5
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133% 125% 145%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
34 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.04 $5.12 $15.38 $11.50 $8.35
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07 .06 .11 .09 .03
Net gains (losses) (both realized and
unrealized) 2.12 2.85 (7.45) 6.43 3.16
- ----------------------------------------------------------------------------------------------------------
Total from investment operations 2.19 2.91 (7.34) 6.52 3.19
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) -- (.23) -- (.04)
Distributions from realized gains -- -- (2.69) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.08) -- (2.92) (2.64) (.04)
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.15 $8.04 $5.12 $15.38 $11.50
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 27.45%(b) 57.03%(c) (57.63%) 69.07% 38.36%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.35% 1.26% 1.42% 1.39% 1.35%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .84% .77% .97% .75% .63%
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $84 $69 $-- $56 $41
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133% 125% 145%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 35
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R* -------------------
PER SHARE DATA 2010 2009(e)
Net asset value, beginning of period $7.74 $7.42
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(a) (.01)
Net gains (losses) (both realized and
unrealized) 2.03 .33
- ----------------------------------------------------------------------
Total from investment operations 2.03 .32
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) --
- ----------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) --
- ----------------------------------------------------------------------
Net asset value, end of period $9.71 $7.74
- ----------------------------------------------------------------------
TOTAL RETURN 26.36%(b) 4.31%
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 2.13% 2.06%(f)
- ----------------------------------------------------------------------
Net investment income (loss) .04% (.36%)(f)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $15 $12
- ----------------------------------------------------------------------
Portfolio turnover rate 96% 149%
- ----------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
36 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $8.05 $5.14 $15.32 $11.50 $8.33
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .05 .04 .11 .05 .03
Net gains (losses) (both realized and
unrealized) 2.11 2.86 (7.45) 6.41 3.14
- ----------------------------------------------------------------------------------------------------------
Total from investment operations 2.16 2.90 (7.34) 6.46 3.17
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.06) -- (.15) -- --
Distributions from realized gains -- -- (2.69) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Total distributions (.06) -- (2.84) (2.64) --
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.15 $8.05 $5.14 $15.32 $11.50
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 26.99%(b) 56.62%(c) (57.58%) 68.51% 38.06%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.65% 1.62% 1.73% 1.65% 1.63%
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(g) 1.65% 1.56% 1.47% 1.65% 1.63%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .51% .72% 1.12% .45% .41%
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1 $1 $2 $6
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133% 125% 145%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 37
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R5 -------------------------------
PER SHARE DATA 2010 2009 2008(h)
Net asset value, beginning of period $8.06 $5.13 $9.32
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07 .05 .03
Net gains (losses) (both realized and
unrealized) 2.12 2.87 (4.22)
- ----------------------------------------------------------------------------------
Total from investment operations 2.19 2.92 (4.19)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08) -- --
- ----------------------------------------------------------------------------------
Proceeds from regulatory settlements .00(a) .01 --
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.17 $8.06 $5.13
- ----------------------------------------------------------------------------------
TOTAL RETURN 27.36%(b) 57.12%(c) (44.96%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.41% 1.31% 1.47%(f)
- ----------------------------------------------------------------------------------
Net investment income (loss) .78% .68% 1.57%(f)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1 $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 96% 149% 133%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
38 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS W OCT. 31,
PER SHARE DATA 2010(i)
Net asset value, beginning of period $9.23
- --------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and
unrealized) .53
- --------------------------------------------------------------
Total from investment operations .52
- --------------------------------------------------------------
Net asset value, end of period $9.75
- --------------------------------------------------------------
TOTAL RETURN 5.63%
- --------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.89%(f)
- --------------------------------------------------------------
Net investment income (loss) (.71%)(f)
- --------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- --------------------------------------------------------------
Portfolio turnover rate 96%
- --------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 39
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS Z OCT. 31,
PER SHARE DATA 2010(i)
Net asset value, beginning of period $9.60
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.00)(a)
Net gains (losses) (both realized and
unrealized) .54
- -------------------------------------------------------------
Total from investment operations .54
- -------------------------------------------------------------
Net asset value, end of period $10.14
- -------------------------------------------------------------
TOTAL RETURN 5.63%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.56%(f)
- -------------------------------------------------------------
Net investment income (loss) (.46%)(f)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------
Portfolio turnover rate 96%
- -------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
*() Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(a) Rounds to less than $0.01 per share.
(b) During the year ended Oct. 31, 2010 the Fund received proceeds from a
regulatory settlement. Had the Fund not received these proceeds, the total
returns would have been lower by 0.03% for classes A, I, R, R4 and R5 and by
0.04% for classes B and C.
(c) During the year ended Oct. 31, 2009 the Fund received proceeds from a
regulatory settlement. Had the Fund not received these proceeds, the total
returns would have been lower by 0.12%.
(d) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the reported expense ratios.
(e) For the period from Aug. 3, 2009 (when shares became available) to Oct. 31,
2009.
(f) Annualized.
(g) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds), before
giving effect to any performance incentive adjustment.
(h) For the period from Aug. 1, 2008 (when shares became available) to Oct. 31,
2008.
(i) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
40 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Columbia Emerging Markets Opportunity Fund (formerly known as Threadneedle
Emerging Markets Fund) (the Fund) is a series of RiverSource Global Series, Inc.
(the Corporation) and is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as a diversified, open-end management investment
company. The Corporation has 10 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Corporation's
Board of Directors (the Board).
The Fund offers Class A, Class B, Class C, Class I, Class R, Class R4, Class R5,
Class W and Class Z shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class R shares are offered without a front-end sales charge or CDSC to
qualifying institutional investors. Effective Sept. 7, 2010, Class R2 shares
were renamed Class R shares.
- - Class R4 and Class R5 shares are not subject to sales charges, however, these
classes are closed to new investors effective Dec. 31, 2010.
- - Class W shares are offered without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts. Class W shares became
effective Sept. 27, 2010.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
- - Class Z shares are offered without a front-end sales charge or CDSC to
certain eligible investors. Class Z shares became effective Sept. 27, 2010.
At Oct. 31, 2010, Columbia Management Investment Advisers, LLC (formerly known
as RiverSource Investments, LLC) (the Investment Manager) and affiliated funds-
of-funds owned 100% of Class I shares, and the Investment Manager owned 100% of
Class W shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
- --------------------------------------------------------------------------------
42 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE. The fair value of a security is
likely to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Oct. 31, 2010, foreign currency holdings consisted of
multiple denominations, primarily Brazilian reais.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
interest at all times. The market value of securities held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence of
the proper level of collateral.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
normally distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
- --------------------------------------------------------------------------------
44 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk and credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts to hedge
the currency exposure associated with some or all of the Fund's securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Unrealized Unrealized
appreciation on depreciation on
forward foreign forward foreign
Foreign exchange currency exchange currency exchange
contracts contracts $3,028 contracts $2,684
- -------------------------------------------------------------------------------------------
</Table>
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $62,120
- --------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $344
- --------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The gross notional amount of contracts outstanding was approximately $2.1
million at Oct. 31, 2010. The monthly average gross notional amount for
- --------------------------------------------------------------------------------
46 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
these contracts was $500,000 for the year ended Oct. 31, 2010. The fair value of
such contracts at Oct. 31, 2010 is set forth in the table above.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement (IMSA), the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 1.10% to 0.90% as the Fund's net assets increase. The
fee may be adjusted upward or downward by a performance incentive adjustment
(PIA) determined monthly by measuring the percentage difference over a rolling
12-month period between the annualized performance of one Class A share of the
Fund and the annualized performance of the Lipper Emerging Markets Funds Index.
In certain circumstances, the Board may approve a change in the index. The
maximum adjustment is 0.12% per year. If the performance difference is less than
0.50%, the adjustment will be zero. The adjustment decreased the management fee
by $66,600 for the year ended Oct. 31, 2010. The management fee for the year
ended Oct. 31, 2010 was 1.07% of the Fund's average daily net assets, including
the adjustment under the terms of the performance incentive arrangement.
In September 2010, the Board approved, subject to approval by shareholders, an
amended IMSA that would eliminate the Fund's PIA. If approved by Fund
shareholders, the IMSA proposal is expected to be effective in the second
quarter of 2011. If not approved, the current IMSA will stay in effect including
any adjustment under the terms of the PIA.
SUBADVISORY AGREEMENT
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $801.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable to Class R, Class R4, Class R5 and Class W shares, which amount
varied by class. In addition, the Transfer Agent charged an annual fee per
inactive account and received reimbursement from the Fund for certain out-of-
pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's shares maintained in each such omnibus account (other than omnibus
accounts for which American Enterprise Investment Services, Inc. is the broker
of record or accounts where the beneficial shareholder is a customer of
Ameriprise Financial Services, Inc., which are paid a per account fee). The
Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is
not entitled to reimbursement for such fees from the Fund.
- --------------------------------------------------------------------------------
48 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A............................................. 0.25%
Class B............................................. 0.27
Class C............................................. 0.26
Class R............................................. 0.08
Class R4............................................ 0.06
Class R5............................................ 0.06
Class W............................................. 0.18*
Class Z............................................. 0.17*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
The Fund and certain other associated investment companies (together, the
Guarantors), severally, but not jointly, guaranteed the performance and
observance of all terms and conditions of a lease entered into by Seligman Data
Corp. (SDC), the former transfer agent of Seligman Emerging Markets Fund, which
was acquired by the Fund on Aug. 14, 2009 (see Note 11) including the payment of
rent by SDC (the Guaranty). The lease and the Guaranty expire in January 2019.
At Oct. 31, 2010, the Fund's total potential future obligation over the life of
the Guaranty is $113,654. The liability remaining at Oct. 31, 2010 for non-
recurring charges associated with the lease amounted to $56,400 and is included
within other accrued expenses in the Statement of Assets and Liabilities.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services. Prior to Sept. 7, 2010,
the Fund also paid an annual fee at a rate of 0.25% of the Fund's average daily
net assets attributable to Class R shares for such services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares, a fee at an annual rate of up to 0.50% of the Fund's average
daily net assets attributable to Class R shares (of which up to 0.25% may be
used for services) and a fee at an annual rate of up to 1.00% of the Fund's
average daily net assets attributable to Class B and Class C shares. For Class B
and Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution
expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $1,096,000 and $1,496,000
for Class B and Class C shares, respectively. These amounts are based on the
most recent information available as of July 31, 2010, and may be recovered from
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $691,994 for Class A, $30,267 for Class B and
$1,780 for Class C for the year ended Oct. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
Effective Jan. 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
Dec. 31, 2011, unless sooner terminated at the sole discretion of the Board,
such that net expenses (excluding fees and expenses of acquired funds*), before
giving effect to any performance incentive adjustment, will not exceed the
following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.85%
Class B.............................................. 2.60%
Class C.............................................. 2.60%
Class I.............................................. 1.41%
Class R.............................................. 2.10%
Class R4............................................. 1.71%
Class R5............................................. 1.46%
Class W.............................................. 1.85%
Class Z.............................................. 1.60%
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
- --------------------------------------------------------------------------------
50 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $582,592,252 and $594,662,450, respectively, for the
year ended Oct. 31, 2010. Realized gains and losses are determined on an
identified cost basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009(a)
- -------------------------------------------------------------------
CLASS A
Sold 9,964,176 12,649,748
Fund merger N/A 6,283,578
Converted from Class B(b) 1,001,557 927,466
Reinvested distributions 306,274 --
Redeemed (11,395,153) (16,538,001)
- -------------------------------------------------------------------
Net increase (decrease) (123,146) 3,322,791
- -------------------------------------------------------------------
CLASS B
Sold 1,130,777 1,590,019
Fund merger N/A 372,602
Reinvested distributions 2,636 --
Converted to Class A(b) (1,128,603) (1,042,154)
Redeemed (1,286,309) (1,673,824)
- -------------------------------------------------------------------
Net increase (decrease) (1,281,499) (753,357)
- -------------------------------------------------------------------
CLASS C
Sold 1,432,742 779,191
Fund merger N/A 3,905,413
Reinvested distributions 15,811 --
Redeemed (1,703,710) (640,121)
- -------------------------------------------------------------------
Net increase (decrease) (255,157) 4,044,483
- -------------------------------------------------------------------
CLASS I
Sold 543,572 9,487,877
Reinvested distributions 82,142 --
Redeemed (894,959) (913,814)
- -------------------------------------------------------------------
Net increase (decrease) (269,245) 8,574,063
- -------------------------------------------------------------------
CLASS R(c)
Sold 786,016 100,396
Fund merger N/A 1,735,811
Reinvested distributions 1,413 --
Redeemed (806,481) (255,756)
- -------------------------------------------------------------------
Net increase (decrease) (19,052) 1,580,451
- -------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009(a)
- -------------------------------------------------------------------
CLASS R4
Sold 18,130 63,248
Reinvested distributions 1,060 --
Redeemed (28,399) (68,066)
- -------------------------------------------------------------------
Net increase (decrease) (9,209) (4,818)
- -------------------------------------------------------------------
CLASS R5
Sold 258 --
Fund merger N/A 66,208
Reinvested distributions 621 --
Redeemed (15) --
- -------------------------------------------------------------------
Net increase (decrease) 864 66,208
- -------------------------------------------------------------------
CLASS W(d)
Sold 271 N/A
- -------------------------------------------------------------------
Net increase (decrease) 271 N/A
- -------------------------------------------------------------------
CLASS Z(d)
Sold 2,114 N/A
- -------------------------------------------------------------------
Net increase (decrease) 2,114 N/A
- -------------------------------------------------------------------
</Table>
(a) Class R is for the period from Aug. 3, 2009 (when shares became available)
to Oct. 31, 2009.
(b) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
(c) Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(d) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Oct. 31, 2010,
securities valued at $12,852,751 were on loan, secured by cash collateral of
$13,581,341 invested in short-term securities or in cash equivalents.
- --------------------------------------------------------------------------------
52 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$117,992 earned from securities lending for the year ended Oct. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $222,260,427 and $230,996,877, respectively, for the year
ended Oct. 31, 2010. The income distributions received with respect to the
Fund's investment in Columbia Short-Term Cash Fund can be found in the Statement
of Operations and the Fund's invested balance in Columbia Short-Term Cash Fund
at Oct. 31, 2010, can be found in the Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
10. PROCEEDS FROM REGULATORY SETTLEMENTS
As a result of settlements of administrative proceedings brought by the
Securities and Exchange Commission against unaffiliated third parties relating
to market timing and/or late trading of mutual funds, the Fund received $203,460
during the year ended Oct. 31, 2010 and $458,466 during the year ended Oct. 31,
2009, which represented the Fund's portion of the proceeds from the settlements
(the Fund was not a party to the proceeding). The proceeds received by the Fund
were recorded as an increase to additional paid-in capital.
11. FUND MERGER
At the close of business on Aug. 14, 2009, Columbia Emerging Markets Opportunity
Fund acquired the assets and assumed the identified liabilities of Seligman
Emerging Markets Fund. The merger was completed after shareholders of the
acquired fund approved the plan on June 29, 2009.
The aggregate net assets of Columbia Emerging Markets Opportunity Fund
immediately before the acquisition were $457,623,309 and the combined net assets
immediately after the acquisition were $543,382,292.
The acquisition was accomplished by a tax-free exchange of 9,437,758 shares of
Seligman Emerging Markets Fund valued at $85,758,983.
- --------------------------------------------------------------------------------
54 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
In exchange for Seligman Emerging Markets Fund shares, Columbia Emerging Markets
Opportunity Fund issued the following number of shares:
<Table>
<Caption>
SHARES
- -------------------------------------------------------------
Class A........................................... 6,283,578
Class B........................................... 372,602
Class C........................................... 3,905,413
Class R........................................... 1,735,811
Class R5.......................................... 66,208
</Table>
The components of Seligman Emerging Markets Fund net assets after adjustments
for any permanent book-to-tax differences at the merger date were as follows:
<Table>
<Caption>
EXCESS OF
ACCUMULATED DISTRIBUTIONS
TOTAL CAPITAL UNREALIZED NET OVER NET
NET ASSETS STOCK APPRECIATION REALIZED LOSS INVESTMENT INCOME
- ---------------------------------------------------------------------------------
$85,758,983 $89,533,507 $17,108,032 $(20,882,556) $--
</Table>
12. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, passive foreign investment company (PFIC) holdings, foreign tax
credits and losses deferred due to wash sales. The character of distributions
made during the year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes. Also, due
to the timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains were
recorded by the Fund.
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$6,067,908 and accumulated net realized gain has been decreased by $5,405,982
resulting in a net reclassification adjustment to decrease paid-in capital by
$661,926.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ---------------------------------------------------------------
Ordinary income.............................. $3,586,948 $--
Long-term capital gain....................... -- --
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 55
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income................... $ 6,903,325
Undistributed accumulated long-term gain........ $ 8,543,463
Unrealized appreciation (depreciation).......... $112,697,274
</Table>
For the year ended Oct. 31, 2010, $98,285,238 of capital loss carry-over was
utilized. It is unlikely the Board will authorize a distribution of any net
realized capital gains until the available capital loss carry-over has been
offset or expires. There is no assurance that the Fund will be able to utilize
all of its capital loss carry-over before it expires.
13. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
14. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
15. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
- --------------------------------------------------------------------------------
56 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in Jones v. Harris Associates. On December 9, 2010, the
District Court reinstated its July 9, 2007 summary judgment order in favor of
the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 57
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
litigation, class actions, and governmental actions, concerning matters arising
in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
58 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Emerging Markets Opportunity Fund
(formerly known as Threadneedle Emerging Markets Fund) (the Fund) (one of the
portfolios constituting the RiverSource Global Series, Inc.) as of October 31,
2010, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the four years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The financial highlights of the Fund for the period ended October 31,
2006, were audited by other auditors whose report dated December 20, 2006,
expressed an unqualified opinion on those financial highlights.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) -----------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Columbia Emerging Markets Opportunity Fund of the RiverSource Global
Series, Inc. at October 31, 2010, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
60 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION ------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 100.00%
Dividends Received Deduction for corporations................ 4.66%
U.S. Government Obligations.................................. 0.00%
Foreign Taxes Paid........................................... $1,445,054
Foreign Source Income........................................ $10,387,880
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 61
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS 5 YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
62 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS 5 YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 63
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS 5 YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
64 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 65
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
66 COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND -- 2010 ANNUAL REPORT 67
COLUMBIA EMERGING MARKETS OPPORTUNITY FUND
(formerly known as Threadneedle Emerging Markets Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6354 X (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA
GLOBAL EQUITY FUND
(FORMERLY KNOWN AS THREADNEEDLE GLOBAL EQUITY FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA GLOBAL EQUITY FUND SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM CAPITAL
GROWTH.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.................................. 3
Manager Commentary..................................... 6
The Fund's Long-term Performance....................... 12
Fund Expenses Example.................................. 14
Portfolio of Investments............................... 17
Statement of Assets and Liabilities.................... 27
Statement of Operations................................ 29
Statements of Changes in Net Assets.................... 31
Financial Highlights................................... 33
Notes to Financial Statements.......................... 42
Report of Independent Registered Public Accounting
Firm................................................. 60
Federal Income Tax Information......................... 62
Board Members and Officers............................. 63
Proxy Voting........................................... 68
</Table>
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Global Equity Fund (the Fund) Class A shares gained 15.78% (excluding
sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) All Country World Index, which advanced 14.65% for the 12-month period.
> The Fund also outperformed its peer group, as represented by the Lipper Global
Funds Index, which rose 15.29% for the same time period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------
Columbia Global Equity Fund
Class A (excluding sales
charge) +15.78% -9.04% +3.25% +0.22%
- ---------------------------------------------------------------------
MSCI All Country World Index
(unmanaged) +14.65% -7.05% +4.23% +2.70%
- ---------------------------------------------------------------------
Lipper Global Funds Index
(unmanaged) +15.29% -6.34% +3.77% +2.41%
- ---------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
Class A (inception
5/29/90) +15.78% -9.04% +3.25% +0.22% N/A
- -------------------------------------------------------------------------
Class B (inception
3/20/95) +15.03% -9.72% +2.46% -0.54% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +14.86% -9.73% +2.43% -0.56% N/A
- -------------------------------------------------------------------------
Class I (inception
8/1/08) +16.32% N/A N/A N/A -0.77%
- -------------------------------------------------------------------------
Class R** (inception
12/11/06) +16.29% -8.93% N/A N/A -1.79%
- -------------------------------------------------------------------------
Class R4 (inception
3/20/95) +16.03% -8.84% +3.42% N/A +4.92%
- -------------------------------------------------------------------------
Class R5 (inception
12/11/06) +16.44% -8.57% N/A N/A -1.31%
- -------------------------------------------------------------------------
Class W (inception
12/1/06) +15.80% -8.99% N/A N/A -1.54%
- -------------------------------------------------------------------------
Class Z (inception
9/27/10) N/A N/A N/A N/A +3.94%***
- -------------------------------------------------------------------------
With sales charge
Class A (inception
5/29/90) +9.13% -10.81% +2.03% -0.37% N/A
- -------------------------------------------------------------------------
Class B (inception
3/20/95) +10.03% -10.63% +2.10% -0.54% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +13.86% -9.73% +2.43% -0.56% N/A
- -------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R, Class R4, Class R5, Class W and Class
Z shares. Class I, Class R, Class R4 and Class R5 are available to qualifying
institutional investors only. Class W shares are offered through qualifying
discretionary accounts. Class Z shares are offered to certain eligible
investors.
*For classes with less than 10 years performance.
**Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
***Not annualized.
- --------------------------------------------------------------------------------
4 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
MORNINGSTAR STYLE BOX(TM)
- --------------------------------------------------------------------------------
LOGO
<Table>
<Caption>
Equity Style
Value Blend Growth
X Large
Medium Size
Small
</Table>
The Morningstar Style Box(TM) is based on the fund's portfolio holdings as of
period end. The vertical axis shows the market capitalization of the stocks
owned, and the horizontal axis shows investment style (value, blend, or growth).
Information shown is based on the most recent data provided by Morningstar.
(C)2010 Morningstar, Inc. All rights reserved. The information contained herein
is proprietary to Morningstar and/or its content providers, may not be copied or
distributed and is not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no guarantee of
future results.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
Effective Sept. 27, 2010, Threadneedle Global Equity Fund was renamed Columbia
Global Equity Fund.
Dear Shareholders,
Columbia Global Equity Fund (the Fund) Class A shares gained 15.78% (excluding
sales charge) for the 12 months ended Oct. 31, 2010. The Fund outperformed its
benchmark, the Morgan Stanley Capital International (MSCI) All Country World
Index (MSCI Index), which advanced 14.65% for the 12-month period. The Fund's
peer group, as represented by the Lipper Global Funds Index, rose 15.29% over
the same time frame.
SIGNIFICANT PERFORMANCE FACTORS
The MSCI Index delivered a double-digit return as the world, on the whole, moved
further from being at the epicenter of the financial crisis, having escaped the
worst case scenario many investors feared.
COUNTRY BREAKDOWN(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Australia 0.9%
- -----------------------------------------------
Belgium 0.6%
- -----------------------------------------------
Brazil 3.0%
- -----------------------------------------------
Canada 0.6%
- -----------------------------------------------
China 1.3%
- -----------------------------------------------
Denmark 1.0%
- -----------------------------------------------
Finland 0.8%
- -----------------------------------------------
France 3.0%
- -----------------------------------------------
Germany 2.1%
- -----------------------------------------------
Hong Kong 4.3%
- -----------------------------------------------
India 1.5%
- -----------------------------------------------
Indonesia 2.9%
- -----------------------------------------------
Ireland 0.7%
- -----------------------------------------------
Italy 0.9%
- -----------------------------------------------
Japan 7.6%
- -----------------------------------------------
Mexico 0.9%
- -----------------------------------------------
Netherlands 2.3%
- -----------------------------------------------
Panama 0.7%
- -----------------------------------------------
Poland 0.8%
- -----------------------------------------------
Portugal 1.1%
- -----------------------------------------------
Singapore 0.7%
- -----------------------------------------------
South Africa 1.0%
- -----------------------------------------------
</Table>
- --------------------------------------------------------------------------------
6 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
COUNTRY BREAKDOWN(1) (at Oct. 31, 2010) (continued)
- ---------------------------------------------------------------------
<Table>
<Caption>
South Korea 3.1%
- ------------------------------------------------
Switzerland 6.6%
- ------------------------------------------------
Taiwan 0.5%
- ------------------------------------------------
United Kingdom 14.1%
- ------------------------------------------------
United States 36.7%
- ------------------------------------------------
Other(2) 0.3%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
Productivity gains and global economic growth have translated to revenue and
profit growth for many companies. Balance sheets appear generally healthy and
cash flow has been strong, while companies still trade at valuations we find
attractive.
During the year, we saw continued divergence between developed and emerging
economies. While growth slowed in the developed world, emerging markets grew at
a rapid pace, supporting their stock markets, particularly in India and
Indonesia. China, however, was an exception as its stock market suffered from
high valuations and inflation concerns.
TOP TEN HOLDINGS(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Apple, Inc. (United States) 2.2%
- ------------------------------------------------
IBM Corp. (United States) 1.9%
- ------------------------------------------------
Rio Tinto PLC (United Kingdom) 1.8%
- ------------------------------------------------
Google, Inc., Class A (United States) 1.7%
- ------------------------------------------------
Tiffany & Co. (United States) 1.6%
- ------------------------------------------------
State Bank of India, GDR (India) 1.5%
- ------------------------------------------------
Tullow Oil PLC (United Kingdom) 1.5%
- ------------------------------------------------
Linde AG (Germany) 1.4%
- ------------------------------------------------
Asahi Breweries Ltd. (Japan) 1.4%
- ------------------------------------------------
Samsung Electronics Co., Ltd. (South
Korea) 1.4%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
The Fund outperformed the MSCI Index primarily due to individual stock
selection. Sectors that had a notable positive effect on the Fund's results
included industrials, consumer discretionary and materials.
Within the consumer discretionary sector, luxury goods companies performed quite
well. Companies such as BURBERRY in the U.K., SWATCH in Switzerland and TIFFANY
in the U.S. have benefited from growing demand for their products in emerging
markets. Within the industrials sector, top contributors included U.K.-based
AGGREKO and THE WEIR GROUP. Leading contributors in the materials sector
included German industrial gas company LINDE, and metals companies CENTAMIN
EGYPT and TALVIVAARA MINING in Finland. Metals companies benefited from
inflation fears, which tend to make metals stocks more attractive to investors.
CLIFFS NATURAL RESOURCES, a U.S. iron ore company, was also a notable
contributor.
Detracting from relative return were the Fund's positions in the consumer
staples and information technology sectors. Within consumer staples, drug store
chain WALGREENS was an underperformer. We bought Walgreens based on a promising
turnaround story that has not evolved as well as we had expected. The company
reported disappointing earnings results and we sold it during the year. Within
the information technology sector, detractors included HOYA, a Japanese optics
company, and ASIAINFO-LINKAGE, a Chinese telecommunications software provider.
From a regional perspective, the Fund's best results came from the emerging
markets and Europe. Having a larger emerging market weighting than the MSCI
Index was advantageous. Strong performance from MRV ENGENHARIA, a Brazilian
homebuilder, and exposure to banks in Indonesia and India also had a positive
effect on relative performance. In Europe, the luxury goods theme was a key
contributor. The Fund's weakest region was the U.S., where financials exposure
was a negative and information technology holdings, including HEWLETT-PACKARD
and DELL, lagged.
CHANGES TO THE FUND'S PORTFOLIO
Changes generally reflected our efforts to move the Fund's portfolio up the
quality curve toward well-run businesses with sustainable growth that we believe
are currently trading at attractive valuations.
We increased the Fund's exposure to companies in emerging markets, while paying
particular attention to valuations. Examples of individual
- --------------------------------------------------------------------------------
8 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
purchases in the emerging markets include telecommunications software provider
AsiaInfo-Linkage, Chinese outdoor advertising company FOCUS MEDIA, Indonesian
bank BANK MANDIRI, and ITAU UNIBANCO and BANCO SANTANDER BRASIL, two Brazilian
banks. We funded the increase in emerging markets by decreasing the U.S.
allocation. Europe is the Fund's largest regional overweight relative to the
MSCI Index. Emphasis there is on global businesses rather than domestic Europe.
Within the developed markets, we increased focus on companies returning
significant cash to shareholders. Examples include U.S. auto parts retailer
ADVANCE AUTO PARTS and waste management company WASTE CONNECTIONS.
We increased exposure to the industrials and materials sectors, funding the
increases by reducing the consumer staples position. As mentioned above, we sold
Walgreens following disappointing earnings results. We also sold Brazilian
personal products company NATURA COSMETICS on valuation grounds.
We significantly reduced the financials weighting, eliminating Japanese
companies SONY FINANCIAL and MITSUBISHI ESTATE, while reducing holdings of OSAKA
SECURITIES EXCHANGE. The Fund remained significantly overweight in information
technology where we find companies that, in our view, exhibit good growth,
strong free cash flow and robust balance sheets.
OUR FUTURE STRATEGY
In general, we anticipate positive global economic growth. However, we still
expect a prolonged low growth trend in developed countries, which are weighed
down by both government and private debt. Despite loose fiscal and monetary
policy, we
Changes generally reflected our efforts to move the Fund's portfolio up the
quality curve toward well-run businesses with sustainable growth that we
believe are currently trading at attractive valuations.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
do not think developed countries will be able to deliver strong sustainable
economic growth as they come to grips with imbalances in their economies. We are
mindful of potential missteps in monetary and fiscal policy as developed
countries, particularly the U.S. and parts of Western Europe, address their
deficits.
Amid continued rapid growth in emerging markets, we are now starting to see
inflationary pressures in select countries, which we believe may lead to tighter
monetary policies. However, we think these inflationary concerns are cyclical
rather than secular.
Overall, we currently remain positive about global economic growth and we see
good opportunities for profit growth across a number of different companies. We
believe we are able to identify a host of well-managed companies with growth
businesses, good balance sheets and very attractive valuations. Also, we believe
that in a world where inflation risks seem to be rising, equities, as an asset
class, appear increasingly attractive.
<Table>
Stephen Thornber Andrew Holliman, CFA(R)
Portfolio Manager Deputy Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
10 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Global Equity Fund Class A shares (from 11/1/00 to
10/31/10) as compared to the performance of the Morgan Stanley Capital
International (MSCI) All Country World Index and the Lipper Global Funds Index.
In comparing the Fund's Class A shares to these indices, you should take into
account the fact that the Fund's performance reflects the maximum initial sales
charge of 5.75%, while such charges are not reflected in the performance of the
indices. Returns for the Fund include the reinvestment of any distributions paid
during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
COLUMBIA GLOBAL EQUITY FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,913 $7,094 $11,059 $9,635
- ------------------------------------------------------------------------------------------
Average annual total return +9.13% -10.81% +2.03% -0.37%
- ------------------------------------------------------------------------------------------
MSCI ALL COUNTRY WORLD INDEX(1)
Cumulative value of $10,000 $11,465 $8,030 $12,300 $13,047
- ------------------------------------------------------------------------------------------
Average annual total return +14.65% -7.05% +4.23% +2.70%
- ------------------------------------------------------------------------------------------
LIPPER GLOBAL FUNDS INDEX(2)
Cumulative value of $10,000 $11,529 $8,217 $12,030 $12,684
- ------------------------------------------------------------------------------------------
Average annual total return +15.29% -6.34% +3.77% +2.41%
- ------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA GLOBAL EQUITY FUND LINE
GRAPH)
<Table>
<Caption>
COLUMBIA GLOBAL
EQUITY FUND
CLASS A MSCI ALL LIPPER GLOBAL
(INCLUDES SALES COUNTRY WORLD FUNDS INDEX(2)
CHARGE) ($9,635) INDEX(1) ($13,047) ($12,684)
---------------- ------------------ --------------
Nov-00 $ 9,425 $10,000 $10,000
1-Jan 8,866 9,773 9,854
1-Apr 7,753 8,957 9,080
1-Jul 7,097 8,450 8,554
1-Oct 6,141 7,481 7,632
2-Jan 6,429 7,796 7,918
2-Apr 6,298 7,832 8,044
2-Jul 5,394 6,747 6,922
2-Oct 5,133 6,466 6,621
3-Jan 4,962 6,305 6,429
3-Apr 5,224 6,722 6,734
3-Jul 5,696 7,411 7,440
3-Oct 6,049 8,098 8,116
4-Jan 6,496 8,893 8,949
4-Apr 6,365 8,803 8,866
4-Jul 6,287 8,769 8,707
4-Oct 6,758 9,234 9,159
5-Jan 7,340 9,909 9,834
5-Apr 7,235 9,820 9,714
5-Jul 7,854 10,493 10,379
5-Oct 8,210 10,607 10,544
6-Jan 9,433 11,830 11,793
6-Apr 9,803 12,479 12,339
6-Jul 9,367 12,082 11,858
6-Oct 9,935 13,022 12,731
7-Jan 10,667 13,838 13,588
7-Apr 11,094 14,683 14,246
7-Jul 11,507 14,869 14,368
7-Oct 12,799 16,248 15,437
8-Jan 10,995 14,113 13,591
8-Apr 11,277 14,747 13,972
8-Jul 10,033 13,415 12,691
8-Oct 6,970 9,221 9,207
9-Jan 6,314 8,177 8,282
9-Apr 6,759 8,944 8,841
9-Jul 7,920 10,660 10,424
9-Oct 8,321 11,380 11,003
10-Jan 8,433 11,581 11,288
10-Apr 9,141 12,522 12,160
10-Jul 8,692 11,898 11,551
10-Oct 9,635 13,047 12,684
</Table>
(1) The Morgan Stanley Capital International (MSCI) All Country World Index, an
unmanaged index of equity securities, is designed to measure equity market
performance in the global developed and emerging markets. The index reflects
reinvestment of all distributions and changes in market prices.
(2) The Lipper Global Funds Index includes the 30 largest global funds tracked
by Lipper Inc. The index's returns include net reinvested dividends. The
Fund's performance is currently measured against this index for purposes of
determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- ------------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,054.00 $ 7.53(d) 1.47%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.60 $ 7.39(d) 1.47%(d)
- ------------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,050.70 $11.35(d) 2.22%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.86 $11.15(d) 2.22%(d)
- ------------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,051.40 $11.35(d) 2.22%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,013.86 $11.15(d) 2.22%(d)
- ------------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,057.20 $ 4.77(d) .93%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.29 $ 4.68(d) .93%(d)
- ------------------------------------------------------------------------------------------------
Class R
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,054.60 $ 8.81(d) 1.72%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.36 $ 8.65(d) 1.72%(d)
- ------------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,056.00 $ 6.30(d) 1.23%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.80 $ 6.19(d) 1.23%(d)
- ------------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,058.60 $ 5.03(d) .98%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.04 $ 4.94(d) .98%(d)
- ------------------------------------------------------------------------------------------------
Class W
- ------------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,055.80 $ 7.23(d) 1.41%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.90 $ 7.09(d) 1.41%(d)
- ------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 15
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- ------------------------------------------------------------------------------------------------
Class Z
- ------------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,039.40 $ 1.21(d) 1.35%(d)
- ------------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.20 $ 6.79(d) 1.35%(d)
- ------------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class Z is as of Sept. 27, 2010 (when shares
became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class Z are equal to the annualized expense ratio for the class as
indicated above, multiplied by the average account value over the period,
multiplied by 32/365 (to reflect the number of days in the period).
(c) Based on the actual return for the six months ended Oct. 31, 2010: +5.40%
for Class A, +5.07% for Class B, +5.14% for Class C, +5.72% for Class I,
+5.46% for Class R, +5.60% for Class R4, +5.86% for Class R5 and +5.58% for
Class W.
(d) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until Dec. 31, 2011, unless sooner terminated at the sole discretion of the
Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 1.36% for Class A, 2.11% for Class B, 2.11% for
Class C, 0.91% for Class I, 1.61% for Class R, 1.21% for Class R4, 0.96% for
Class R5, 1.36% for Class W and 1.11% for Class Z. Any amounts waived will
not be reimbursed by the Fund. This change is effective Jan. 1, 2011. Had
this change been in place for the entire six month period ended Oct. 31,
2010, the actual expenses paid would have been $6.76 for Class A, $10.58 for
Class B, $10.59 for Class C, $4.46 for Class I, $8.04 for Class R, $6.00 for
Class R4, $4.72 for Class R5, $6.77 for Class W and $0.99 for Class Z; the
hypothetical expenses paid would have been $6.64 for Class A, $10.40 for
Class B, $10.40 for Class C, $4.38 for Class I, $7.90 for Class R, $5.89 for
Class R4, $4.63 for Class R5, $6.64 for Class W and $5.59 for Class Z.
(e) Based on the actual return for the period from Sept. 27, 2010 (when shares
became available) to Oct. 31, 2010 of +3.94% for Class Z.
- --------------------------------------------------------------------------------
16 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.9%)(c)
ISSUER SHARES VALUE(a)
AUSTRALIA (0.9%)
Atlas Iron Ltd. 567,790(b) $1,395,937
CSL Ltd. 85,928(d) 2,763,186
---------------
Total 4,159,123
- -------------------------------------------------------------------------------------
BELGIUM (0.6%)
Ageas 869,347 2,671,836
- -------------------------------------------------------------------------------------
BRAZIL (2.9%)
Banco Santander Brasil SA, ADR 318,949 4,592,865
Itau Unibanco Holding SA, ADR 100,000 2,456,000
MRV Engenharia e Participacoes SA 258,700 2,520,300
Multiplan Empreendimentos Imobiliarios SA 155,400 3,612,401
---------------
Total 13,181,566
- -------------------------------------------------------------------------------------
CANADA (0.6%)
Barrick Gold Corp. 52,058 2,503,469
- -------------------------------------------------------------------------------------
CHINA (1.3%)
AsiaInfo-Linkage, Inc. 167,312(b) 3,717,673
Focus Media Holding Ltd., ADR 88,967(b) 2,201,933
---------------
Total 5,919,606
- -------------------------------------------------------------------------------------
DENMARK (1.0%)
FLSmidth & Co. A/S 61,886(d) 4,572,857
- -------------------------------------------------------------------------------------
FINLAND (0.7%)
Talvivaara Mining Co. PLC 350,596(b) 3,159,702
- -------------------------------------------------------------------------------------
FRANCE (3.0%)
Cie Generale des Etablissements Michelin,
Series B 46,892 3,728,515
Euler Hermes SA 42,895(b) 4,037,341
Renault SA 103,610(b) 5,755,294
---------------
Total 13,521,150
- -------------------------------------------------------------------------------------
GERMANY (2.1%)
Linde AG 44,018 6,335,512
MTU Aero Engines Holding AG 49,958 3,016,586
---------------
Total 9,352,098
- -------------------------------------------------------------------------------------
HONG KONG (4.3%)
361 Degrees International Ltd. 2,379,000(d) 2,305,030
Champion REIT 3,714,770(d) 2,046,454
China High Speed Transmission Equipment Group
Co., Ltd. 1,426,000 2,914,184
Great Eagle Holdings Ltd. 1,155,377 3,458,231
Sun Hung Kai Properties Ltd. 331,000 5,671,113
The Hongkong & Shanghai Hotels 1,603,500(d) 2,821,796
---------------
Total 19,216,808
- -------------------------------------------------------------------------------------
INDIA (1.5%)
State Bank of India, GDR 49,382 6,814,716
- -------------------------------------------------------------------------------------
INDONESIA (2.9%)
Bank Mandiri Tbk PT 4,588,500 3,594,795
Bank Rakyat Indonesia Persero Tbk PT 2,059,000 2,627,040
PT Perusahaan Gas Negara Tbk 7,564,500 3,428,788
Semen Gresik Persero Tbk PT 3,115,500 3,417,112
---------------
Total 13,067,735
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
IRELAND (0.7%)
Accenture PLC, Class A 71,348 $3,189,969
- -------------------------------------------------------------------------------------
ITALY (0.9%)
Prysmian SpA 201,423 3,903,742
- -------------------------------------------------------------------------------------
JAPAN (7.5%)
Asahi Breweries Ltd. 309,600 6,252,019
Canon, Inc. 95,500 4,414,813
Hoya Corp. 193,600 4,527,838
Makita Corp. 121,900 4,287,026
Nippon Electric Glass Co., Ltd. 287,000(d) 3,698,509
Osaka Securities Exchange Co., Ltd. 309 1,555,176
Shin-Etsu Chemical Co., Ltd. 41,900(d) 2,121,816
Ushio, Inc. 151,500(d) 2,524,686
Yamada Denki Co., Ltd. 65,760 4,273,951
---------------
Total 33,655,834
- -------------------------------------------------------------------------------------
MEXICO (0.9%)
America Movil SAB de CV, Series L, ADR 71,495 4,093,804
- -------------------------------------------------------------------------------------
NETHERLANDS (2.3%)
Fugro NV-CVA 79,623 5,630,923
ING Groep NV-CVA 426,805(b) 4,554,553
---------------
Total 10,185,476
- -------------------------------------------------------------------------------------
PANAMA (0.7%)
Copa Holdings SA, Class A 58,793 2,982,569
- -------------------------------------------------------------------------------------
POLAND (0.8%)
KGHM Polska Miedz SA 80,962 3,638,231
- -------------------------------------------------------------------------------------
PORTUGAL (1.1%)
Galp Energia SGPS SA, Series B 262,472 5,061,359
- -------------------------------------------------------------------------------------
SINGAPORE (0.6%)
DBS Group Holdings Ltd. 267,000 2,868,305
- -------------------------------------------------------------------------------------
SOUTH AFRICA (1.0%)
MTN Group Ltd. 253,973 4,573,016
- -------------------------------------------------------------------------------------
SOUTH KOREA (3.1%)
Hyundai Department Store Co., Ltd. 17,650 1,953,128
KB Financial Group, Inc. 54,668 2,429,516
NHN Corp. 19,104(b) 3,387,535
Samsung Electronics Co., Ltd. 9,249 6,124,459
---------------
Total 13,894,638
- -------------------------------------------------------------------------------------
SWITZERLAND (6.5%)
Credit Suisse Group AG 86,723 3,581,884
Nestle SA 77,866 4,264,354
Novartis AG 85,190 4,938,113
Roche Holding AG 20,952 3,076,167
The Swatch Group AG 15,533 5,935,746
Tyco Electronics Ltd. 109,389 3,465,444
Xstrata PLC 193,970 3,758,867
---------------
Total 29,020,575
- -------------------------------------------------------------------------------------
TAIWAN (0.5%)
Taiwan Semiconductor Manufacturing Co., Ltd. 1,111,000 2,278,825
- -------------------------------------------------------------------------------------
UNITED KINGDOM (14.0%)
3i Group PLC 616,624 2,959,912
Aggreko PLC 125,521 3,167,478
Autonomy Corp. PLC 82,934(b) 1,942,659
BG Group PLC 233,327 4,543,981
Burberry Group PLC 279,752 4,567,347
Centamin Egypt Ltd. 1,168,217(b) 3,238,070
Chemring Group PLC 52,677 2,530,284
Ensco PLC, ADR 58,241 2,698,888
HSBC Holdings PLC 294,826 3,066,154
Intercontinental Hotels Group PLC 176,450 3,412,287
Rio Tinto PLC 121,548 7,859,873
Tesco PLC 363,075 2,483,066
The Weir Group PLC 238,825 5,961,614
Tullow Oil PLC 341,718 6,487,879
Ultra Electronics Holdings PLC 102,772 3,064,346
Vodafone Group PLC 1,625,861 4,424,514
---------------
Total 62,408,352
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
UNITED STATES (36.5%)
Advance Auto Parts, Inc. 42,401 $2,755,217
Aetna, Inc. 78,635 2,348,041
American Tower Corp., Class A 67,074(b) 3,461,689
Apple, Inc. 32,880(b) 9,892,606
Avon Products, Inc. 129,710 3,949,670
Bank of America Corp. 169,292 1,936,700
Cisco Systems, Inc. 256,337(b) 5,852,174
Citigroup, Inc. 1,133,647(b) 4,727,308
Cliffs Natural Resources, Inc. 46,036 3,001,547
Cloud Peak Energy, Inc. 189,039(b) 3,283,607
Dell, Inc. 307,465(b) 4,421,347
Devon Energy Corp. 51,040 3,318,622
Flowserve Corp. 35,728 3,572,800
Gilead Sciences, Inc. 78,205(b) 3,102,392
Google, Inc., Class A 12,411(b) 7,607,819
Hartford Financial Services Group, Inc. 177,637 4,259,735
Henry Schein, Inc. 98,057(b) 5,505,901
Hewlett-Packard Co. 66,954 2,816,085
IBM Corp. 57,718 8,288,305
JPMorgan Chase & Co. 143,242 5,390,197
Laboratory Corp. of America Holdings 61,434(b) 4,995,813
Merck & Co., Inc. 71,048 2,577,621
Micron Technology, Inc. 556,320(b) 4,600,766
Microsoft Corp. 134,388 3,580,096
Norfolk Southern Corp. 89,527 5,505,016
Oracle Corp. 176,247 5,181,662
QUALCOMM, Inc. 80,683 3,641,224
Sirona Dental Systems, Inc. 136,327(b) 5,132,712
The Walt Disney Co. 169,081 6,105,515
Thermo Fisher Scientific, Inc. 98,731(b) 5,076,748
Tiffany & Co. 135,177 7,164,381
Ultra Petroleum Corp. 80,389(b) 3,308,007
Union Pacific Corp. 35,930 3,150,342
Wal-Mart Stores, Inc. 103,007 5,579,889
Waste Connections, Inc. 83,559 3,404,193
WESCO International, Inc. 98,352(b) 4,211,433
---------------
Total 162,707,180
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $373,829,916) $442,602,541
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.2%)
SHARES VALUE(a)
Columbia Short-Term Cash Fund, 0.241% 1,107,766(e) $1,107,766
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $1,107,766) $1,107,766
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (3.1%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS(f)
Cantor Fitzgerald & Co.
dated 10-29-10, matures 11-01-10,
repurchase price
$5,000,100 0.240% $5,000,000 $5,000,000
Deutsche Bank AG
dated 10-29-10, matures 11-01-10,
repurchase price
$3,755,678 0.230 3,755,606 3,755,606
G.X. Clarke and Company
dated 10-29-10, matures 11-01-10,
repurchase price
$5,000,133 0.320 5,000,000 5,000,000
---------------
Total 13,755,606
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $13,755,606) $13,755,606
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $388,693,288)(g) $457,465,913
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at Oct. 31, 2010:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(a)
- -----------------------------------------------------------------------
Aerospace & Defense 1.9% $8,611,216
Airlines 0.7 2,982,569
Auto Components 0.8 3,728,515
Automobiles 1.3 5,755,294
Beverages 1.4 6,252,019
Biotechnology 1.3 5,865,578
Capital Markets 1.5 6,541,796
Chemicals 1.9 8,457,328
Commercial Banks 6.3 28,449,391
Commercial Services & Supplies 1.5 6,571,671
Communications Equipment 2.1 9,493,398
Computers & Peripherals 3.8 17,130,038
Construction & Engineering 1.0 4,572,857
Construction Materials 0.8 3,417,112
Diversified Financial Services 4.1 18,163,934
Electrical Equipment 2.1 9,342,612
Electronic Equipment, Instruments &
Components 2.6 11,691,791
Energy Equipment & Services 1.9 8,329,811
Food & Staples Retailing 1.8 8,062,955
Food Products 1.0 4,264,354
Gas Utilities 0.8 3,428,788
Health Care Equipment & Supplies 1.1 5,132,712
Health Care Providers & Services 2.9 12,849,755
Hotels, Restaurants & Leisure 1.4 6,234,083
Household Durables 0.6 2,520,300
Insurance 2.5 10,968,912
Internet Software & Services 2.5 10,995,354
IT Services 2.6 11,478,274
Life Sciences Tools & Services 1.1 5,076,748
Machinery 3.1 13,821,440
Media 1.9 8,307,448
Metals & Mining 6.3 28,555,696
Multiline Retail 0.4 1,953,128
Office Electronics 1.0 4,414,813
Oil, Gas & Consumable Fuels 5.7 26,003,455
Personal Products 0.9 3,949,670
Pharmaceuticals 2.4 10,591,901
Real Estate Investment Trusts (REITs) 0.5 2,046,454
Real Estate Management & Development 2.8 12,741,745
Road & Rail 1.9 8,655,358
Semiconductors & Semiconductor
Equipment 2.9 13,004,050
Software 3.2 14,422,090
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES
BY INDUSTRY (CONTINUED)
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(a)
- -----------------------------------------------------------------------
Specialty Retail 3.2% $14,193,549
Textiles, Apparel & Luxury Goods 2.9 12,808,123
Trading Companies & Distributors 0.9 4,211,433
Wireless Telecommunication Services 3.7 16,553,023
Other(1) 3.3 14,863,372
- -----------------------------------------------------------------------
Total $457,465,913
- -----------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
</Table>
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) At Oct. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) Affiliated Money Market Fund -- See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(f) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
CANTOR FITZGERALD & CO. (0.240%)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Fannie Mae Grantor Trust $257
Fannie Mae Interest Strip 80,068
Fannie Mae Pool 622,893
Fannie Mae Principal Strip 14,504
Fannie Mae REMICS 749,932
Fannie Mae Whole Loan 12,350
Federal National Mortgage Association 30,240
FHLMC Multifamily Structured Pass Through
Certificates 197
FHLMC Structured Pass Through Securities 5,785
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
CANTOR FITZGERALD & CO. (CONTINUED)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Freddie Mac Coupon Strips $545
Freddie Mac Non Gold Pool 301,102
Freddie Mac Reference REMIC 4,195
Freddie Mac REMICS 326,995
Freddie Mac Strips 173,135
Ginnie Mae I Pool 674,256
Ginnie Mae II Pool 1,266,511
Government National Mortgage Association 439,728
United States Treasury Inflation Indexed Bonds 50,639
United States Treasury Strip Coupon 261,625
United States Treasury Strip Principal 85,043
------------------------------------------------------------
Total market value of collateral securities $5,100,000
------------------------------------------------------------
<Caption>
DEUTSCHE BANK AG (0.230%)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Fannie Mae Pool $3,830,718
------------------------------------------------------------
Total market value of collateral securities $3,830,718
------------------------------------------------------------
<Caption>
G.X. CLARKE AND COMPANY (0.320%)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Fannie Mae Discount Notes $4,794
Fannie Mae Interest Strip 2,260
Federal Farm Credit Bank 411,390
Federal Home Loan Bank Discount Notes 2,000
Federal Home Loan Banks 893,531
Federal Home Loan Mortgage Corp 790,564
Federal National Mortgage Association 1,099,221
Freddie Mac Discount Notes 15,836
Freddie Mac Strips 16,681
Resolution Funding Corp Interest Strip 10
Tennessee Valley Authority 57,587
United States Treasury Inflation Indexed Bonds 386,055
United States Treasury Note/Bond 1,097,374
United States Treasury Strip Coupon 246,662
United States Treasury Strip Principal 76,065
------------------------------------------------------------
Total market value of collateral securities $5,100,030
------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(g) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $396,446,415 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $68,467,290
Unrealized depreciation (7,447,792)
-----------------------------------------------------------
Net unrealized appreciation $61,019,498
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 23
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
24 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in valuations may include,
but are not limited to, financial statement analysis, capital account balances,
discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCT. 31, 2010
------------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS(b) INPUTS INPUTS TOTAL
- -----------------------------------------------------------------------------------------------
Equity Securities
Common Stocks $442,602,541 $-- $-- $442,602,541
- -----------------------------------------------------------------------------------------------
Total Equity Securities 442,602,541 -- -- 442,602,541
- -----------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(c) 1,107,766 -- -- 1,107,766
Investments of Cash
Collateral Received
for Securities on
Loan -- 13,755,606 -- 13,755,606
- -----------------------------------------------------------------------------------------------
Total Other 1,107,766 13,755,606 -- 14,863,372
- -----------------------------------------------------------------------------------------------
Total $443,710,307 $13,755,606 $-- $457,465,913
- -----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) Includes certain securities trading outside the U.S. whose values were
adjusted at Oct. 31, 2009 as a result of significant market movements
following the close of local trading, and were classified as Level 2.
Values were not adjusted as of Oct, 31, 2010. Therefore, these investment
securities were classified as Level 1 instead of Level 2 at Oct. 31, 2010.
The amount of securities transferred out of Level 2 into Level 1 during the
period was $129,711,776. Transfers between Levels 1 and 2 are determined
based on the fair value at the beginning of the period for security
positions held throughout the period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Oct. 31, 2010.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 25
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
26 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $373,829,916) $ 442,602,541
Affiliated money market fund (identified cost $1,107,766) 1,107,766
Investments of cash collateral received for securities on loan
(identified cost $13,755,606) 13,755,606
- ---------------------------------------------------------------------------------------
Total investments in securities (identified cost $388,693,288) 457,465,913
Cash 1
Foreign currency holdings (identified cost $360,531) 370,929
Capital shares receivable 90,372
Dividends and accrued interest receivable 322,460
Receivable for investment securities sold 3,106,950
Reclaims receivable 373,458
- ---------------------------------------------------------------------------------------
Total assets 461,730,083
- ---------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 472,921
Payable upon return of securities loaned 13,755,606
Accrued investment management services fees 9,691
Accrued distribution fees 3,511
Accrued transfer agency fees 10,785
Accrued administrative services fees 983
Accrued plan administration services fees 48
Other accrued expenses 168,509
- ---------------------------------------------------------------------------------------
Total liabilities 14,422,054
- ---------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 447,308,029
- ---------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 635,488
Additional paid-in capital 579,121,345
Undistributed net investment income 229,417
Accumulated net realized gain (loss) (201,517,104)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 68,838,883
- ---------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $ 447,308,029
- ---------------------------------------------------------------------------------------
*Value of securities on loan $ 12,949,988
- ---------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 27
STATEMENT OF ASSETS AND LIABILITIES (continued) --------------------------------
OCT. 31, 2010
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $375,168,966 53,042,442 $7.07(1)
Class B $ 23,894,493 3,605,201 $6.63
Class C $ 10,146,647 1,548,238 $6.55
Class I $ 31,014,538 4,359,437 $7.11
Class R $ 41,009 5,746 $7.14
Class R4 $ 7,015,836 983,963 $7.13
Class R5 $ 19,408 2,727 $7.12
Class W $ 4,534 639 $7.10
Class Z $ 2,598 365 $7.12
- ------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.50. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 7,503,577
Interest 672
Income distributions from affiliated money market fund 3,654
Income from securities lending -- net 83,085
Foreign taxes withheld (798,492)
- -------------------------------------------------------------------------
Total income 6,792,496
- -------------------------------------------------------------------------
Expenses:
Investment management services fees 3,435,736
Distribution fees
Class A 949,930
Class B 300,148
Class C 101,910
Class R 186
Class R3 9
Class W 11
Transfer agency fees
Class A 1,083,861
Class B 91,383
Class C 29,922
Class R 31
Class R3 3
Class R4 3,134
Class R5 9
Class W 8
Administrative services fees 366,549
Plan administration services fees
Class R 78
Class R3 9
Class R4 16,416
Compensation of board members 13,626
Custodian fees 89,895
Printing and postage 70,520
Registration fees 117,880
Professional fees 39,490
Other 40,932
- -------------------------------------------------------------------------
Total expenses 6,751,676
- -------------------------------------------------------------------------
Investment income (loss) -- net 40,820
- -------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 29
STATEMENT OF OPERATIONS (continued) --------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $20,167,206
Foreign currency transactions 298,333
- -------------------------------------------------------------------------
Net realized gain (loss) on investments 20,465,539
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 45,779,384
- -------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 66,244,923
- -------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $66,285,743
- -------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
30 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 40,820 $ 3,794,601
Net realized gain (loss) on investments 20,465,539 (107,498,811)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 45,779,384 183,214,646
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 66,285,743 79,510,436
- ------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (1,567,578) (5,343,305)
Class B (38,424) --
Class C (13,917) (7,366)
Class I (255,509) (409,801)
Class R -- (81)
Class R3 (14) (64)
Class R4 (36,668) (95,325)
Class R5 (132) (82)
Class W (20) (56)
- ------------------------------------------------------------------------------------------
Total distributions (1,912,262) (5,856,080)
- ------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 31
STATEMENTS OF CHANGES IN NET ASSETS (continued) --------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 19,793,978 $ 38,201,079
Class B shares 1,904,019 3,574,996
Class C shares 1,059,943 1,451,876
Class I shares 2,020,204 39,064,193
Class R shares 12,579 9,763
Class R4 shares 1,404,854 1,403,150
Class R5 shares -- 1
Class Z shares 2,500 --
Fund merger (Note 11)
Class A shares N/A 11,920,114
Class B shares N/A 968,653
Class C shares N/A 5,405,143
Class R shares N/A 143,426
Class R5 shares N/A 13,250
Reinvestment of distributions at net asset value
Class A shares 1,522,138 5,231,241
Class B shares 37,535 --
Class C shares 12,552 7,156
Class I shares 255,476 409,715
Class R shares -- 31
Class R4 shares 36,668 95,325
Class R5 shares 101 --
Conversions from Class B to Class A
Class A shares 6,351,106 8,590,859
Class B shares (6,351,106) (8,590,859)
Payments for redemptions
Class A shares (101,092,506) (105,412,307)
Class B shares (8,324,086) (10,894,724)
Class C shares (2,870,826) (1,994,833)
Class I shares (8,634,570) (17,447,359)
Class R shares (23,750) (121,102)
Class R3 shares (3,241) --
Class R4 shares (1,418,681) (1,395,358)
Class R5 shares (971) --
- ------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions (94,306,084) (29,366,571)
- ------------------------------------------------------------------------------------------
Proceeds from regulatory settlements (Note 10) 424,540 93,216
- ------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (29,508,063) 44,381,001
Net assets at beginning of year 476,816,092 432,435,091
- ------------------------------------------------------------------------------------------
Net assets at end of year $ 447,308,029 $ 476,816,092
- ------------------------------------------------------------------------------------------
Undistributed net investment income $ 229,417 $ 356,736
- ------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
32 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.13 $5.21 $9.61 $7.52 $6.23
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(a) .05 .05 .02 .01
Net gains (losses) (both realized and
unrealized) .96 .95 (4.41) 2.13 1.30
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .96 1.00 (4.36) 2.15 1.31
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.08) (.04) (.06) (.02)
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.07 $6.13 $5.21 $9.61 $7.52
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 15.78%(b) 19.39%(c) (45.55%) 28.82% 21.01%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.45% 1.44% 1.46% 1.39% 1.51%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .03% .92% .65% .28% .23%
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $375 $395 $380 $737 $608
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100% 112%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $5.77 $4.87 $9.02 $7.06 $5.88
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04) .01 (.01) (.04) (.01)
Net gains (losses) (both realized and
unrealized) .90 .89 (4.14) 2.00 1.19
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .86 .90 (4.15) 1.96 1.18
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) -- -- .00(a) --
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.63 $5.77 $4.87 $9.02 $7.06
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 15.03%(b) 18.48%(c) (46.01%) 27.81% 20.07%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 2.21% 2.21% 2.23% 2.15% 2.28%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.69%) .22% (.11%) (.45%) (.54%)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $24 $33 $42 $104 $110
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100% 112%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
34 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $5.71 $4.83 $8.93 $7.02 $5.85
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.04) .00(a) (.01) (.04) (.01)
Net gains (losses) (both realized and
unrealized) .88 .89 (4.09) 1.98 1.18
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .84 .89 (4.10) 1.94 1.17
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.01) (.01) -- (.03) --
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.55 $5.71 $4.83 $8.93 $7.02
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 14.86%(b) 18.39%(c) (45.91%) 27.76% 20.03%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 2.21% 2.20% 2.22% 2.15% 2.27%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) (.72%) (.08%) (.09%) (.48%) (.50%)
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $10 $11 $5 $8 $6
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100% 112%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 35
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I -------------------------------
PER SHARE DATA 2010 2009 2008(e)
Net asset value, beginning of period $6.16 $5.25 $7.47
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04 .09 .03
Net gains (losses) (both realized and
unrealized) .95 .95 (2.25)
- ----------------------------------------------------------------------------------
Total from investment operations .99 1.04 (2.22)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.13) --
- ----------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) --
- ----------------------------------------------------------------------------------
Net asset value, end of period $7.11 $6.16 $5.25
- ----------------------------------------------------------------------------------
TOTAL RETURN 16.32%(b) 20.21%(c) (29.72%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses .91% .84% .85%(f)
- ----------------------------------------------------------------------------------
Net investment income (loss) .55% 1.56% 1.55%(f)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $31 $33 $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
36 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R* --------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(g)
Net asset value, beginning of period $6.14 $5.23 $9.62 $7.89
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02) (.01) .05 (.01)
Net gains (losses) (both realized and
unrealized) 1.01 1.00 (4.42) 1.84
- -----------------------------------------------------------------------------------------------
Total from investment operations .99 .99 (4.37) 1.83
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.08) (.02) (.10)
- -----------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- --
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $7.14 $6.14 $5.23 $9.62
- -----------------------------------------------------------------------------------------------
TOTAL RETURN 16.29%(b) 19.13%(c) (45.48%) 23.41%
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.71% 1.69% 1.79% 1.74%(f)
- -----------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(h) 1.71% 1.69% 1.54% 1.74%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) (.24%) (.16%) .57% (.13%)(f)
- -----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100%
- -----------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 37
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 -------------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $6.18 $5.26 $9.70 $7.60 $6.29
- ----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .02 .06 .07 .04 .02
Net gains (losses) (both realized and
unrealized) .96 .96 (4.46) 2.13 1.31
- ----------------------------------------------------------------------------------------------------------
Total from investment operations .98 1.02 (4.39) 2.17 1.33
- ----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.10) (.05) (.07) (.02)
- ----------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- -- --
- ----------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.13 $6.18 $5.26 $9.70 $7.60
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 16.03%(b) 19.72%(c) (45.47%) 28.85% 21.26%
- ----------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Gross expenses prior to expense
waiver/reimbursement 1.21% 1.15% 1.29% 1.23% 1.32%
- ----------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(h) 1.21% 1.15% 1.28% 1.23% 1.32%
- ----------------------------------------------------------------------------------------------------------
Net investment income (loss) .27% 1.22% .83% .45% .44%
- ----------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $7 $6 $5 $10 $9
- ----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100% 112%
- ----------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
38 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R5 --------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(g)
Net asset value, beginning of period $6.16 $5.25 $9.69 $7.89
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .08 .08 .05
Net gains (losses) (both realized and
unrealized) .97 .96 (4.45) 1.85
- -----------------------------------------------------------------------------------------------
Total from investment operations 1.00 1.04 (4.37) 1.90
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.13) (.07) (.10)
- -----------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- --
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $7.12 $6.16 $5.25 $9.69
- -----------------------------------------------------------------------------------------------
TOTAL RETURN 16.44%(b) 20.20%(c) (45.40%) 24.33%
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses .96% .90% 1.04% .99%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) .50% 1.39% 1.07% .62%(f)
- -----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100%
- -----------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 39
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS W --------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(i)
Net asset value, beginning of period $6.16 $5.23 $9.66 $7.83
- -----------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01 .06 .05 .02
Net gains (losses) (both realized and
unrealized) .95 .96 (4.44) 1.91
- -----------------------------------------------------------------------------------------------
Total from investment operations .96 1.02 (4.39) 1.93
- -----------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.03) (.09) (.04) (.10)
- -----------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .00(a) -- --
- -----------------------------------------------------------------------------------------------
Net asset value, end of period $7.10 $6.16 $5.23 $9.66
- -----------------------------------------------------------------------------------------------
TOTAL RETURN 15.80%(b) 19.70%(c) (45.62%) 24.87%
- -----------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.38% 1.30% 1.43% 1.39%(f)
- -----------------------------------------------------------------------------------------------
Net investment income (loss) .08% 1.05% .68% .20%(f)
- -----------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $--
- -----------------------------------------------------------------------------------------------
Portfolio turnover rate 54% 81% 97% 100%
- -----------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
40 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS Z OCT. 31,
PER SHARE DATA 2010(j)
Net asset value, beginning of period $6.85
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and
unrealized) .28
- -------------------------------------------------------------
Total from investment operations .27
- -------------------------------------------------------------
Net asset value, end of period $7.12
- -------------------------------------------------------------
TOTAL RETURN 3.94%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(d)
Total expenses 1.37%(f)
- -------------------------------------------------------------
Net investment income (loss) (1.52%)(f)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------
Portfolio turnover rate 54%
- -------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
* Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(a) Rounds to less than $0.01 per share.
(b) During the year ended Oct. 31, 2010, the Fund received proceeds from a
regulatory settlement. Had the Fund not received these proceeds, the total
return would have been lower by 0.09%.
(c) During the year ended Oct. 31, 2009, the Fund received proceeds from a
regulatory settlement. Had the Fund not received these proceeds, the total
return would have been lower by 0.02%.
(d) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the reported expense ratios.
(e) For the period from Aug. 1, 2008 (when shares became available) to Oct. 31,
2008.
(f) Annualized.
(g) For the period from Dec. 11, 2006 (when shares became available) to Oct. 31,
2007.
(h) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds), before
giving effect to any performance incentive adjustment.
(i) For the period from Dec. 1, 2006 (when shares became available) to Oct. 31,
2007.
(j) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Columbia Global Equity Fund (formerly known as Threadneedle Global Equity Fund)
(the Fund) is a series of RiverSource Global Series, Inc. (the Corporation) and
is registered under the Investment Company Act of 1940, as amended (the 1940
Act), as a diversified, open-end management investment company. The Corporation
has 10 billion authorized shares of capital stock that can be allocated among
the separate series as designated by the Corporation's Board of Directors (the
Board).
The Fund offers Class A, Class B, Class C, Class I, Class R, Class R4, Class R5,
Class W and Class Z shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class R shares are offered without a front-end sales charge or CDSC to
qualifying institutional investors. Effective Sept. 7, 2010, Class R2 shares
were renamed Class R shares.
- - Class R4 and Class R5 shares are not subject to sales charges, however, these
classes are closed to new investors effective Dec. 31, 2010.
- - Class W shares are offered without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
- --------------------------------------------------------------------------------
42 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
- - Class Z shares are offered without a front-end sales charge or CDSC to
certain eligible investors. Class Z shares became effective Sept. 27, 2010.
At Aug. 27, 2010, all Class R3 shares were liquidated. The shares in this class
had consisted solely of seed capital from Columbia Management Investment
Advisers, LLC (formerly known as RiverSource Investment, LLC) (the Investment
Manager).
At Oct. 31, 2010, the Investment Manager and affiliated funds-of-funds owned
100% of Class I shares, and the Investment Manager owned 100% of Class W and
Class Z shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
(such as foreign securities) that is not reflected in price quotations or
valuations from other sources. A fair value price is a good faith estimate of
the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE. The fair value of a security is
likely to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Oct. 31, 2010, foreign currency holdings consisted of
multiple denominations, primarily Brazilian reais.
- --------------------------------------------------------------------------------
44 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
normally distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income,
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk and credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts to hedge
the currency exposure associated with some or all of the Fund's securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
- --------------------------------------------------------------------------------
46 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
At Oct. 31, 2010, the Fund had no outstanding derivatives.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- ---------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS
- ---------------------------------------------------------------------
Foreign exchange contracts $20,708
- ---------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
- ---------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS
- ---------------------------------------------------------------------
Foreign exchange contracts $--
- ---------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At Oct. 31, 2010, the Fund had no outstanding forward foreign currency exchange
contracts. The monthly average gross notional amount for these contracts was
$600,000 for the year ended Oct. 31, 2010.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement (IMSA), the Investment Manager
is responsible for the management of the Fund. Day-to-day portfolio management
of the Fund is provided by the Fund's subadviser. See Subadvisory agreement
below. The management fee is an annual fee that is equal to a percentage of the
Fund's average daily net assets that declines from 0.80% to 0.57% as the Fund's
net assets increase. The fee may be adjusted upward or downward by a performance
incentive adjustment (PIA) determined monthly by measuring the percentage
difference over a rolling 12-month period between the annualized performance of
one Class A share of the Fund and the annualized performance of the Lipper
Global Funds Index. In certain circumstances, the Board may approve a change in
the index. The maximum adjustment is 0.12% per year. If the performance
difference is less than 0.50%, the adjustment will be zero. The adjustment
decreased the management fee by $177,692 for the year ended Oct. 31, 2010. The
management fee for the year ended Oct. 31, 2010 was 0.75% of the Fund's average
daily net assets, including the adjustment under the terms of the performance
incentive arrangement.
In September 2010, the Board approved, subject to approval by shareholders, an
amended IMSA that would eliminate the Fund's PIA. If approved by Fund
shareholders, the IMSA proposal is expected to be effective in the second
quarter of 2011. If not approved, the current IMSA will stay in effect including
any adjustment under the terms of the PIA.
SUBADVISORY AGREEMENT
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
- --------------------------------------------------------------------------------
48 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $743.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable to Class R, Class R4, Class R5 and Class W shares, which amount
varied by class. In addition, the Transfer Agent charged an annual fee per
inactive account and received reimbursement from the Fund for certain out-of-
pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's shares maintained in each such omnibus account (other than omnibus
accounts for which American Enterprise Investment Services, Inc. is the broker
of record or accounts where the beneficial shareholder is a customer of
Ameriprise Financial Services, Inc., which are paid a per account fee). The
Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is
not entitled to reimbursement for such fees from the Fund.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.29%
Class B.............................................. 0.30
Class C.............................................. 0.29
Class R.............................................. 0.08
Class R4............................................. 0.05
Class R5............................................. 0.05
Class W.............................................. 0.20
Class Z.............................................. 0.19*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
The Fund and certain other associated investment companies (together, the
Guarantors), have severally, but not jointly, guaranteed the performance and
observance of all the terms and conditions of a lease entered into by Seligman
Data Corp. (SDC), the former transfer agent of Seligman Global Growth Fund,
which was acquired by the Fund on Aug. 14, 2009 (Note 11), including the payment
of rent by SDC (the Guaranty). The lease and the Guaranty expire in January
2019. At Oct. 31, 2010, the Fund's total potential future obligation over the
life of the Guaranty is $23,613. The liability remaining at Oct. 31, 2010 for
non-recurring charges associated with the lease amounted to $11,735 and is
included within other accrued expenses in the Statement of Assets and
Liabilities.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services. Prior to Sept. 7, 2010,
the Fund also paid an annual fee at a rate of 0.25% of the Fund's average daily
net assets attributable to Class R shares for such services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
- --------------------------------------------------------------------------------
50 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares, a fee at an annual rate of up to 0.50% of the Fund's average
daily net assets attributable to Class R shares (of which up to 0.25% may be
used for services) and a fee at an annual rate of up to 1.00% of the Fund's
average daily net assets attributable to Class B and Class C shares. For Class B
and Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution
expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $1,321,000 and $1,518,000
for Class B and Class C shares, respectively. These amounts are based on the
most recent information available as July 31, 2010, and may be recovered from
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $263,126 for Class A, $20,400 for Class B and $442
for Class C for the year ended Oct. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
Effective Jan. 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
Dec. 31, 2011, unless sooner terminated at the sole discretion of the Board,
such that net expenses (excluding fees and expenses of acquired funds*), before
giving effect to any performance incentive adjustment, will not exceed the
following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.36%
Class B.............................................. 2.11
Class C.............................................. 2.11
Class I.............................................. 0.91
Class R.............................................. 1.61
Class R4............................................. 1.21
Class R5............................................. 0.96
Class W.............................................. 1.36
Class Z.............................................. 1.11
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $244,014,816 and $344,114,577, respectively, for the
year ended Oct. 31, 2010. Realized gains and losses are determined on an
identified cost basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- -------------------------------------------------------------------
CLASS A
Sold 3,039,215 7,500,867
Fund merger N/A 2,011,033
Converted from Class B(a) 995,109 1,463,400
Reinvested distributions 235,302 983,464
Redeemed (15,580,909) (20,645,429)
- -------------------------------------------------------------------
Net increase (decrease) (11,311,283) (8,686,665)
- -------------------------------------------------------------------
CLASS B
Sold 311,662 745,833
Fund merger N/A 173,293
Reinvested distributions 6,174 --
Converted to Class A(a) (1,059,873) (1,561,833)
Redeemed (1,370,661) (2,294,056)
- -------------------------------------------------------------------
Net increase (decrease) (2,112,698) (2,936,763)
- -------------------------------------------------------------------
CLASS C
Sold 175,367 298,410
Fund merger N/A 977,635
Reinvested distributions 2,085 1,304
Redeemed (480,706) (411,308)
- -------------------------------------------------------------------
Net increase (decrease) (303,254) 866,041
- -------------------------------------------------------------------
CLASS I
Sold 305,925 8,069,029
Reinvested distributions 39,003 69,326
Redeemed (1,275,047) (2,849,465)
- -------------------------------------------------------------------
Net increase (decrease) (930,119) 5,288,890
- -------------------------------------------------------------------
CLASS R(b)
Sold 1,903 1,844
Fund merger N/A 24,131
Reinvested distributions -- 5
Redeemed (3,655) (19,116)
- -------------------------------------------------------------------
Net increase (decrease) (1,752) 6,864
- -------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
52 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- -------------------------------------------------------------------
CLASS R3
Redeemed (634) --
- -------------------------------------------------------------------
Net increase (decrease) (634) --
- -------------------------------------------------------------------
CLASS R4
Sold 215,707 265,435
Reinvested distributions 5,591 17,716
Redeemed (217,500) (266,560)
- -------------------------------------------------------------------
Net increase (decrease) 3,798 16,591
- -------------------------------------------------------------------
CLASS R5
Fund merger N/A 2,227
Reinvested distributions 15 --
Redeemed (149) --
- -------------------------------------------------------------------
Net increase (decrease) (134) 2,227
- -------------------------------------------------------------------
CLASS Z(c)
Sold 365 N/A
- -------------------------------------------------------------------
Net increase (decrease) 365 N/A
- -------------------------------------------------------------------
</Table>
(a) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
(b) Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(c) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Oct. 31, 2010,
securities valued at $12,949,988 were on loan, secured by cash collateral of
$13,755,606 invested in short-term securities or in cash equivalents.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$83,085 earned from securities lending for the year ended Oct. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $116,197,271 and $117,504,438, respectively, for the year
ended Oct. 31, 2010. The income distributions received with respect to the
Fund's investment in Columbia Short-Term Cash Fund can be found in the Statement
of Operations and the Fund's invested balance in Columbia Short-Term Cash Fund
at Oct. 31, 2010, can be found in the Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed
- --------------------------------------------------------------------------------
54 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
$500 million. Participation in such increase by any existing lender shall be at
such lender's sole discretion. Interest is charged to each fund based on its
borrowings at a rate equal to the sum of the federal funds rate plus (i) 1.25%
per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
10. PROCEEDS FROM REGULATORY SETTLEMENTS
As a result of settlements of administrative proceedings brought by the
Securities and Exchange Commission against unaffiliated third parties relating
to market timing and/or late trading of mutual funds, the Fund received $424,540
during the year ended Oct. 31, 2010 and $93,216 during the year ended Oct. 31,
2009, which represented the Fund's portion of the proceeds from the settlements
(the Fund was not a party to the proceeding). The proceeds received by the Fund
were recorded as an increase to additional paid-in capital.
11. FUND MERGER
At the close of business on Aug. 14, 2009, Columbia Global Equity Fund acquired
the assets and assumed the identified liabilities of Seligman Global Growth
Fund. The merger was completed after shareholders of the acquired fund approved
the plan on June 29, 2009.
The aggregate net assets of Columbia Global Equity Fund immediately before the
acquisition were $475,267,886 and the combined net assets immediately after the
acquisition were $493,718,472. The acquisition was accomplished by a tax-free
exchange of 3,038,152 shares of Seligman Global Growth Fund valued at
$18,450,586.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 55
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
In exchange for Seligman Global Growth Fund shares, Columbia Global Equity Fund
issued the following number of shares:
<Table>
<Caption>
SHARES
- -------------------------------------------------------------
Class A........................................... 2,011,033
Class B........................................... 173,293
Class C........................................... 977,635
Class R2.......................................... 24,131
Class R5.......................................... 2,227
</Table>
The components of Seligman Global Growth Fund's net assets after adjustments for
any permanent book-to-tax differences at the merger date were as follows:
<Table>
<Caption>
EXCESS OF
ACCUMULATED DISTRIBUTIONS OVER
TOTAL CAPITAL UNREALIZED NET NET INVESTMENT
NET ASSETS STOCK APPRECIATION REALIZED LOSS INCOME
- ----------------------------------------------------------------------------------------------
Seligman Global
Growth Fund...... $18,450,586 $52,704,193 $320,343 $(34,572,254) $(1,696)
</Table>
12. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, passive foreign investment company (PFIC) holdings, foreign tax
credits and losses deferred due to wash sales. The character of distributions
made during the year from net investment income or net realized gains may differ
from their ultimate characterization for federal income tax purposes. Also, due
to the timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains were
recorded by the Fund.
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$1,744,123 and accumulated net realized loss has been decreased by $129,000,943
resulting in a net reclassification adjustment to decrease paid-in capital by
$130,745,066.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
Ordinary income........................... $1,912,262 $5,856,080
Long-term capital gain.................... -- --
</Table>
- --------------------------------------------------------------------------------
56 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income................... $ 1,359,972
Undistributed accumulated long-term gain........ $ --
Accumulated realized loss....................... $(194,881,637)
Unrealized appreciation (depreciation).......... $ 61,072,861
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$194,881,637 at Oct. 31, 2010, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2011 2015 2016 2017
$30,509,951 $1,766,232 $62,625,028 $99,980,426
</Table>
For the year ended Oct. 31, 2010, $14,600,080 of capital loss carry-over was
utilized and $130,038,031 expired unused. It is unlikely the Board will
authorize a distribution of any net realized capital gains until the available
capital loss carry-over has been offset or expires. There is no assurance that
the Fund will be able to utilize all of its capital loss carry-over before it
expires.
13. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
14. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
15. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 57
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in Jones v. Harris Associates. On December 9, 2010, the
District Court reinstated its July 9, 2007 summary judgment order in favor of
the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC
- --------------------------------------------------------------------------------
58 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
in accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA GLOBAL EQUITY FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Global Equity Fund (formerly known as
Threadneedle Global Equity Fund) (the Fund) (one of the portfolios constituting
the RiverSource Global Series, Inc.) as of October 31, 2010, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights of the Fund for the period ended October 31, 2006, were audited by
other auditors whose report dated December 20, 2006, expressed an unqualified
opinion on those financial highlights.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
60 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Columbia Global Equity Fund of the RiverSource Global Series, Inc.
at October 31, 2010, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the four years in the period then
ended, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 61
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS -- the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 100.00%
Dividends Received Deduction for corporations................ 90.45%
U.S. Government Obligations.................................. 0.00%
Foreign Taxes Paid........................................... $671,137
Foreign Source Income........................................ $3,243,616
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
62 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 63
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
64 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 65
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
66 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT 67
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
68 COLUMBIA GLOBAL EQUITY FUND -- 2010 ANNUAL REPORT
COLUMBIA GLOBAL EQUITY FUND
(formerly known as Threadneedle Global Equity Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6334 AJ (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA GLOBAL BOND FUND
(FORMERLY KNOWN AS RIVERSOURCE GLOBAL BOND FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA GLOBAL BOND FUND SEEKS TO PROVIDE SHAREHOLDERS WITH HIGH TOTAL RETURN
THROUGH INCOME AND GROWTH OF CAPITAL.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 6
The Fund's Long-term Performance... 12
Fund Expenses Example.............. 14
Portfolio of Investments........... 17
Statement of Assets and
Liabilities...................... 37
Statement of Operations............ 39
Statements of Changes in Net
Assets........................... 41
Financial Highlights............... 43
Notes to Financial Statements...... 48
Report of Independent Registered
Public Accounting Firm........... 67
Federal Income Tax Information..... 69
Board Members and Officers......... 70
Proxy Voting....................... 75
</Table>
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Global Bond Fund (the Fund) Class A shares gained 7.70% (excluding
sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Barclays Capital Global Aggregate
Index, which increased 6.89% for the 12-month period.
> The Fund underperformed its peer group, as represented by the Lipper Global
Income Funds Index, which rose 9.90% for the same period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------
Columbia Global Bond Fund Class A
(excluding sales charge) +7.70% +6.69% +6.77% +7.30%
- ---------------------------------------------------------------------
Barclays Capital Global Aggregate
Index (unmanaged) +6.89% +7.23% +7.28% +7.50%
- ---------------------------------------------------------------------
Lipper Global Income Funds Index
(unmanaged) +9.90% +6.39% +6.60% +7.09%
- ---------------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 4.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The indices do not reflect the effects of sales charges, expenses (excluding
Lipper) and taxes. It is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION*
Class A (inception
3/20/89) +7.70% +6.69% +6.77% +7.30% N/A
- -------------------------------------------------------------------------
Class B (inception
3/20/95) +6.89% +5.90% +5.96% +6.47% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +6.95% +5.93% +5.95% +6.48% N/A
- -------------------------------------------------------------------------
Class I (inception
3/4/04) +8.16% +7.19% +7.20% N/A +6.20%
- -------------------------------------------------------------------------
Class R** (inception
3/15/10) N/A N/A N/A N/A +8.15%***
- -------------------------------------------------------------------------
Class R4 (inception
3/20/95) +7.85% +7.01% +7.03% +7.53% N/A
- -------------------------------------------------------------------------
Class W (inception
12/1/06) +7.66% +6.67% N/A N/A +6.57%
- -------------------------------------------------------------------------
Class Z (inception
9/27/10) N/A N/A N/A N/A +2.05%***
- -------------------------------------------------------------------------
With sales charge
Class A (inception
3/20/89) +2.59% +4.97% +5.73% +6.78% N/A
- -------------------------------------------------------------------------
Class B (inception
3/20/95) +1.89% +5.00% +5.64% +6.47% N/A
- -------------------------------------------------------------------------
Class C (inception
6/26/00) +5.95% +5.93% +5.95% +6.48% N/A
- -------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 4.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R, Class R4, Class W and Class Z shares.
Class I, Class R and Class 4 are available to qualifying institutional investors
only. Class W shares are offered through qualifying discretionary accounts.
Class Z shares are offered to certain eligible investors.
*For classes with less than 10 years performance.
**Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
*-
**Not annualized.
- --------------------------------------------------------------------------------
4 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
PORTFOLIO STATISTICS
- --------------------------------------------------------------------------------
<Table>
Weighted average life(1) 7.3 years
- --------------------------------------
Effective duration(2) 5.1 years
- --------------------------------------
</Table>
(1) WEIGHTED AVERAGE LIFE measures a bond's maturity, which takes into
consideration the possibility that the issuer may call the bond before its
maturity date.
(2) EFFECTIVE DURATION measures the sensitivity of a security's price to
parallel shifts in the yield curve (the graphical depiction of the levels of
interest rates from two years out to 30 years). Positive duration means that
as rates rise, the price decreases, and negative duration means that as
rates rise, the price increases.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
Effective Sept. 27, 2010, RiverSource Global Bond Fund was renamed Columbia
Global Bond Fund.
At Oct. 31, 2010, approximately 36% of the Fund's shares were owned in aggregate
by affiliated funds-of-funds managed by Columbia Management Investment Advisers,
LLC (Columbia Management). As a result of asset allocation decisions by Columbia
Management, it is possible Columbia Global Bond Fund may experience relatively
large purchases or redemptions from affiliated funds-of-funds (see page 60,
Class I capital share transactions for related activity during the most recent
fiscal period). Columbia Management seeks to minimize the impact of these
transactions by structuring them over a reasonable period of time. Columbia
Global Bond Fund may experience increased expenses as it buys and sells
securities as a result of purchases or redemptions by affiliated funds-of-funds.
For more information on the Fund's expenses, see the discussions beginning on
pages 14 and 55.
PORTFOLIO BREAKDOWN(1) (at Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Asset-Backed 1.7%
- ------------------------------------------------
Commercial Mortgage-Backed 3.5%
- ------------------------------------------------
Consumer Discretionary 1.5%
- ------------------------------------------------
Consumer Staples 2.4%
- ------------------------------------------------
Energy 1.2%
- ------------------------------------------------
Financials 7.8%
- ------------------------------------------------
Foreign Government 55.0%
- ------------------------------------------------
Health Care 0.4%
- ------------------------------------------------
Industrials 0.8%
- ------------------------------------------------
Materials 1.6%
- ------------------------------------------------
Residential Mortgage-Backed 4.6%
- ------------------------------------------------
Telecommunication 5.0%
- ------------------------------------------------
U.S. Government Obligations & Agencies 3.8%
- ------------------------------------------------
Utilities 8.6%
- ------------------------------------------------
Other(2) 2.1%
- ------------------------------------------------
</Table>
(1) Portfolio holdings include industry sectors that can be comprised of
securities in several industries. Please refer to the section entitled
"Portfolio of Investments" for a complete listing. No single industry
exceeded 25% of portfolio assets.
Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
6 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Dear Shareholders,
Columbia Global Bond Fund (the Fund) Class A shares gained 7.70% (excluding
sales charge) for the 12 months ended Oct. 31, 2010. The Fund outperformed its
benchmark, the Barclays Capital Global Aggregate Index (Barclays Global Index),
which rose 6.89%, but underperformed the Lipper Global Income Funds Index,
representing the Fund's peer group, which increased 9.90% during the same
period.
SIGNIFICANT PERFORMANCE FACTORS
On an absolute basis, the Fund benefited during the annual period from a decline
in government bond yields, reasonable performance in non-government bond sectors
and a modest decline in the U.S. dollar. The U.S. dollar declined 1.7% on a
trade-weighted basis during the annual period. As the value of the U.S. dollar
decreases, the dollar value of foreign investments typically rises and vice
versa. The Fund had approximately 62% of its net assets exposed to foreign
currencies, on average, during the annual period, down slightly from
approximately 63%, on average, in the prior 12-month period.
Relative to the Barclays Global Index, the Fund was helped most during the
annual period by our active management decisions. Currency and country
selection, duration and yield curve positioning, and sector and issue selection
all aided performance during the period. Decisions that had a particularly
positive impact on performance included our allocation to
TOP TEN COUNTRIES(1) (at Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
United States 35.8%
- ------------------------------------------------
Japan 12.8%
- ------------------------------------------------
Germany 5.7%
- ------------------------------------------------
France 5.4%
- ------------------------------------------------
United Kingdom 4.9%
- ------------------------------------------------
Netherlands 3.9%
- ------------------------------------------------
Italy 3.2%
- ------------------------------------------------
Canada 3.1%
- ------------------------------------------------
Spain 2.8%
- ------------------------------------------------
Brazil 2.4%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
several commodity-related and emerging market currencies, our allocation to
below investment grade issuers (both sovereign and corporate), and issue
selection within investment grade credit. Our positioning in the peripheral
Eurozone countries (Italy, Spain, Portugal, Ireland, and Greece) had a modestly
positive impact on performance. Moderate exposure to Greek bonds hurt
performance, but underweight positions in the other peripheral issuers more than
compensated. In contrast, our underweight positions in the Japanese yen and U.S.
mortgages weighed on performance relative to the index. On balance, though, the
annual period offers a good representation of our investment style, which looks
to add return in a diversified and balanced fashion over time.
CHANGES TO THE FUND'S PORTFOLIO
We made a number of changes to portfolio positioning during the period. Our
largest position shifts took place around the middle of the period, when
mounting concerns over Southern Europe's debt crisis and signs of a slowdown in
the US economy led to a sharp drop in government bond yields in core markets, a
widening in credit spreads, and a sell-off in more cyclically sensitive
currencies. We used the market turbulence as an opportunity to add risk to the
Fund's portfolio, which we did in several ways.
First, we cut our duration-weighted exposure to government bonds sharply and
reallocated the exposure to spread sectors, especially investment grade
corporate bonds, securitized assets, and below investment grade bonds (both
sovereign and corporate issues). Second, we shortened portfolio duration
relative to the index, especially in the U.S., Japan and Europe. In hindsight,
we made this shift a few months too early, but the good performance of spread
sectors in the second half of the period more than compensated. Third, we
increased our exposure to several cyclically sensitive currencies such as the
Canadian dollar. We had increased our U.S. dollar exposure in the spring, when
the Southern European debt crisis started to unfold, but then cut it sharply
over the summer once the U.S. dollar peaked and started to trade lower.
We made an additional round of changes towards the end of the annual period,
taking profits on some of the position shifts above. In particular, we cut back
our overweight positions in the Canadian, Australian, and New Zealand dollars.
We also trimmed our overweight position in
- --------------------------------------------------------------------------------
8 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
investment grade corporate bonds and went back to an underweight position in
securitized assets. Finally, we increased our exposure to the U.S. dollar,
moving from an underweight to a neutral position on the view that speculation of
a second round of quantitative easing by the U.S. Federal Reserve had caused the
U.S. dollar to trade below levels justified by interest rate differentials. On
balance, these changes left the Fund in a somewhat more defensive stance as the
annual period ended.
OUR FUTURE STRATEGY
Looking forward, we expect the global economy to expand at a trend-like pace of
4% in the year ahead. The global economy has become bifurcated, however, between
economies experiencing normal cyclical recoveries and those seeing sub-par
recoveries due to the damage left behind by financial crisis.
The first group includes economies where the events of 2007-09 were largely an
external shock and where imbalances coming into the crisis were modest. Fiscal
and monetary stimulus had the desired effect and growth rebounded smartly.
Output gaps have largely or fully disappeared and central banks have generally
started normalizing monetary policy as a result. Growth appears to be moderating
to a more sustainable pace in many of these countries, but policy generally
remains accommodative and we expect the normalization process to continue.
The second group includes countries where the combination of excess leverage and
falling asset prices, especially real estate prices, damaged household balance
sheets, banks, and government finances. Fiscal and monetary policy stimulus
helped arrest the decline and spur recovery, but the transition to an
environment of healthy private sector expansion has been bumpy and halting,
reflecting the need for further deleveraging. Output gaps in this second group
of countries remain large, keeping central banks on hold at historically low
interest rates.
We expect this theme of differentiation to remain in place and anticipate
looking to capitalize on it by focusing on healthier countries, currencies, and
sectors. We also expect government yields to rise over time, but this process
will likely remain gradual as long as the major developed country central banks
remain on hold. We also expect the U.S. dollar to remain broadly weak in the
year ahead, reflecting low U.S. short-term rates, but
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
remain alert to the risk of temporary U.S. dollar appreciation during bouts of
investor risk aversion.
A year plus into the global recovery process, however, markets remain fickle.
The annual period just ended was marked by sudden and unpredictable swings in
investor risk appetite, sometimes almost monthly, and it seems likely this
pattern will continue until economic recovery in the largest developed countries
is more firmly entrenched. As a result, we continue to monitor the market for
changing conditions and adjust the Fund's duration, country, sector, yield
curve, and currency positioning in an effort to seek an attractive balance
between risk and potential return. Our sector teams remain focused on careful
individual security selection, as we continue to seek opportunities to
capitalize on attractively valued bonds.
Nicholas Pifer, CFA(R)
Portfolio Manager
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
10 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
THIS PAGE LEFT BLANK INTENTIONALLY
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Global Bond Fund Class A shares (from 11/1/00 to
10/31/10) as compared to the performance of the Barclays Capital Global
Aggregate Index and the Lipper Global Income Funds Index. In comparing the
Fund's Class A shares to these indices, you should take into account the fact
that the Fund's performance reflects the maximum initial sales charge of 4.75%,
while such charges are not reflected in the performance of the indices. Returns
for the Fund include the reinvestment of any distributions paid during each
period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
1 YEAR 3 YEARS 5 YEARS 10 YEARS
COLUMBIA GLOBAL BOND FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $10,259 $11,567 $13,215 $19,283
- ------------------------------------------------------------------------------------------
Average annual total return +2.59% +4.97% +5.73% +6.78%
- ------------------------------------------------------------------------------------------
BARCLAYS CAPITAL GLOBAL AGGREGATE INDEX(1)
Cumulative value of $10,000 $10,689 $12,331 $14,207 $20,606
- ------------------------------------------------------------------------------------------
Average annual total return +6.89% +7.23% +7.28% +7.50%
- ------------------------------------------------------------------------------------------
LIPPER GLOBAL INCOME FUNDS INDEX(2)
Cumulative value of $10,000 $10,990 $12,041 $13,763 $19,829
- ------------------------------------------------------------------------------------------
Average annual total return +9.90% +6.39% +6.60% +7.09%
- ------------------------------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA GLOBAL BOND FUND LINE
GRAPH)
<Table>
<Caption>
COLUMBIA GLOBAL
BOND FUND
CLASS A BARCLAYS CAPITAL LIPPER GLOBAL
(INCLUDES SALES GLOBAL AGGREGATE INCOME FUNDS
CHARGE) INDEX(1) INDEX(2)
----------------- ------------------ ------------------
11/1/00 $ 9,525 $10,000 $10,000
10,191 10,515 10,622
9,946 10,304 10,434
10,110 10,486 10,611
10/01 10,557 10,984 11,010
10,220 10,534 10,757
10,436 10,854 10,959
10,918 11,587 11,268
10/02 11,217 11,872 11,549
11,948 12,525 12,188
12,312 12,882 12,648
12,254 12,811 12,643
10/03 12,704 13,321 13,075
13,361 13,987 13,693
13,089 13,695 13,453
13,186 13,800 13,541
10/04 14,062 14,610 14,242
14,485 15,067 14,680
14,472 15,108 14,709
14,081 14,720 14,554
10/05 13,896 14,505 14,408
14,086 14,727 14,715
14,177 14,805 14,861
14,345 15,025 15,000
10/06 14,614 15,344 15,302
14,731 15,357 15,450
15,188 15,888 15,878
15,171 15,887 15,898
10/07 15,875 16,712 16,468
16,283 17,452 16,986
16,501 17,760 16,996
16,330 17,603 16,702
10/08 14,659 16,281 14,906
15,356 17,211 15,189
15,759 17,369 15,507
17,171 18,463 16,994
10/09 17,903 19,279 18,043
17,717 19,106 18,283
17,745 18,978 18,663
18,306 19,612 18,984
10/10 19,283 20,606 19,829
</Table>
(1) The Barclays Capital Global Aggregate Index, an unmanaged market
capitalization weighted benchmark, tracks the performance of investment
grade fixed income securities denominated in 13 currencies. The index
reflects reinvestment of all distributions and changes in market prices.
(2) The Lipper Global Income Funds Index includes the 30 largest global income
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,086.70 $ 6.50(d) 1.25%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.70 $ 6.29(d) 1.25%(d)
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,082.10 $10.49(d) 2.02%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.86 $10.15(d) 2.02%(d)
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,082.40 $10.38(d) 2.00%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.96 $10.05(d) 2.00%(d)
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,089.00 $ 4.27(d) .82%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.84 $ 4.13(d) .82%(d)
- -------------------------------------------------------------------------------------------
Class R
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,084.90 $ 8.21(d) 1.58%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.05 $ 7.95(d) 1.58%(d)
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,087.40 $ 5.83(d) 1.12%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.35 $ 5.64(d) 1.12%(d)
- -------------------------------------------------------------------------------------------
Class W
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,085.00 $ 6.55(d) 1.26%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.65 $ 6.34(d) 1.26%(d)
- -------------------------------------------------------------------------------------------
Class Z
- -------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,020.50 $ 0.84(d) .95%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.19 $ 4.78(d) .95%(d)
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class Z is as of Sept. 27, 2010 (when shares
became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class Z are equal to the annualized expense ratio for
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 15
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
the class as indicated above, multiplied by the average account value over
the period, multiplied by 32/365 (to reflect the number of days in the
period).
(c) Based on the actual return for the six months ended Oct. 31, 2010: +8.67%
for Class A, +8.21% for Class B, +8.24% for Class C, +8.90% for Class I,
+8.49% for Class R, +8.74% for Class R4 and +8.50% for Class W.
(d) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until Dec. 31, 2011, unless sooner terminated at the sole discretion of the
Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), will not exceed 1.21% for Class A, 1.96% for Class B, 1.96%
for Class C, 0.76% for Class I, 1.46% for Class R, 1.06% for Class R4, 1.21%
for Class W and 0.96% for Class Z. Any amounts waived will not be reimbursed
by the Fund. This change is effective Jan. 1, 2011. Had this change been in
place for the entire six month period ended Oct. 31, 2010, the actual
expenses paid would have been $6.29 for Class A, $10.17 for Class B, $10.18
for Class C, $3.96 for Class I, $7.59 for Class R, $5.52 for Class R4, $6.29
for Class W and $0.85 for Class Z; the hypothetical expenses paid would have
been $6.09 for Class A, $9.85 for Class B, $9.85 for Class C, $3.83 for
Class I, $7.34 for Class R, $5.34 for Class R4, $6.09 for Class W and $4.84
for Class Z.
(e) Based on the actual return for the period from Sept. 27, 2010 (when shares
became available) to Oct. 31, 2010 of +2.05% for Class Z.
- --------------------------------------------------------------------------------
16 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
BONDS (93.3%)(c)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
ARGENTINA (0.3%)
Argentina Bonos
Senior Unsecured
09-12-13 7.000% $1,033,000 $1,016,285
Argentina Government International Bond
Senior Unsecured
12-15-35 0.000 2,900,000(e) 385,700
---------------
Total 1,401,985
- -------------------------------------------------------------------------------------
AUSTRALIA (1.7%)
Australia & New Zealand Banking Group Ltd.
(AUD)
11-08-11 6.500 420,000 416,174
FMG Resources August 2006 Pty Ltd.
Senior Notes
11-01-15 7.000 64,000(d,g) 65,880
11-01-15 7.000 207,000(d) 213,082
New South Wales Treasury Corp.
(AUD) Local Government Guaranteed
05-01-12 6.000 6,825,000 6,777,148
Telstra Corp., Ltd.
Senior Unsecured
04-01-12 6.375 500,000 534,717
Westpac Banking Corp.
(AUD) Senior Unsecured
09-24-12 7.250 300,000 301,125
Woodside Finance Ltd.
11-10-14 4.500 520,000(d) 561,002
---------------
Total 8,869,128
- -------------------------------------------------------------------------------------
AUSTRIA (1.4%)
Austria Government Bond
(EUR) Senior Unsecured
07-15-14 4.300 5,045,000 7,662,763
- -------------------------------------------------------------------------------------
BELGIUM (2.0%)
Belgium Government Bond
(EUR)
03-28-11 3.500 1,470,000 2,065,930
09-28-12 5.000 5,285,000 7,847,146
Fortis Bank SA/NV
(EUR) Senior Unsecured
05-30-14 4.500 420,000 618,648
---------------
Total 10,531,724
- -------------------------------------------------------------------------------------
BERMUDA (0.2%)
Bacardi Ltd.
04-01-14 7.450 $245,000(d) 289,237
Intelsat Jackson Holdings SA
Senior Unsecured
10-15-20 7.250 350,000(d) 357,875
Weatherford International Ltd.
09-15-40 6.750 435,000 461,239
---------------
Total 1,108,351
- -------------------------------------------------------------------------------------
BRAZIL (2.3%)
Banco Nacional de Desenvolvimento Economico e Social
Senior Unsecured
06-16-18 6.369 535,000(d) 613,913
06-10-19 6.500 910,000(d) 1,052,487
Brazil Notas do Tesouro Nacional
(BRL)
01-01-12 10.000 762,500 4,562,323
01-01-13 10.000 740,000 4,343,554
Brazilian Government International Bond
01-15-18 8.000 249,167 301,118
Brazilian Government International Bond
Senior Unsecured
01-17-17 6.000 307,000 362,413
10-14-19 8.875 115,000 163,300
01-07-41 5.625 270,000 298,688
Centrais Eletricas Brasileiras SA
Senior Unsecured
07-30-19 6.875 375,000(d) 448,410
---------------
Total 12,146,206
- -------------------------------------------------------------------------------------
CANADA (2.9%)
Bank of Nova Scotia
10-29-15 1.650 1,465,000(d) 1,459,782
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
CANADA (CONT.)
Canadian Government Bond
(CAD)
06-01-18 4.250% 1,080,000 $1,186,337
Cascades, Inc.
12-15-17 7.750 $500,000 534,375
Devon Financing Corp. ULC
09-30-11 6.875 110,000 115,940
EnCana Corp.
Senior Unsecured
11-01-11 6.300 30,000 31,573
Petro-Canada
Senior Unsecured
05-15-18 6.050 350,000 412,606
Province of British Columbia Canada
(CAD)
06-18-14 5.300 1,640,000 1,797,986
Province of Ontario Canada
(CAD)
03-08-14 5.000 2,835,000 3,051,454
Province of Quebec Canada
(CAD)
12-01-17 4.500 4,083,000 4,386,092
Royal Bank of Canada
(EUR) Senior Unsecured
01-18-13 3.250 630,000 902,808
TELUS Corp.
Senior Unsecured
06-01-11 8.000 377,000 392,486
The Toronto-Dominion Bank
(EUR) Senior Unsecured
05-14-15 5.375 600,000 940,640
Thomson Reuters Corp.
Senior Unsecured
04-15-40 5.850 235,000 248,807
TransAlta Corp.
Senior Unsecured
03-15-40 6.500 180,000 188,069
---------------
Total 15,648,955
- -------------------------------------------------------------------------------------
CAYMAN ISLANDS (0.2%)
Allstate Life Funding LLC
(GBP) Senior Secured
01-17-11 6.375 250,000 $404,075
Pacific Life Funding LLC
(GBP) Secured
02-08-11 6.250 251,000 406,362
---------------
Total 810,437
- -------------------------------------------------------------------------------------
COLOMBIA (0.3%)
Colombia Government International Bond
01-27-17 7.375 $230,000 286,925
09-18-37 7.375 260,000 347,100
Colombia Government International Bond
Senior Unsecured
03-18-19 7.375 250,000(k) 319,375
01-18-41 6.125 235,000(k) 268,374
Ecopetrol SA
Senior Unsecured
07-23-19 7.625 300,000 369,000
---------------
Total 1,590,774
- -------------------------------------------------------------------------------------
CZECH REPUBLIC (0.1%)
Czech Republic Government Bond
(CZK)
06-16-13 3.700 11,530,000 679,791
- -------------------------------------------------------------------------------------
DENMARK (0.3%)
Nykredit Realkredit A/S
(DKK)
04-01-28 5.000 9,241,556 1,798,579
- -------------------------------------------------------------------------------------
EL SALVADOR (0.1%)
El Salvador Government International Bond
Senior Unsecured
01-24-23 7.750 245,000(d) 285,425
- -------------------------------------------------------------------------------------
FRANCE (5.0%)
BNP Paribas Home Loan Covered Bonds SA
11-02-15 2.200 1,300,000(d,g) 1,307,245
BNP Paribas
(EUR) Subordinated Notes
12-17-12 5.250 555,000 817,812
Cie de Financement Foncier
09-16-15 2.500 1,400,000(d) 1,413,462
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
FRANCE (CONT.)
Credit Agricole SA
(EUR) Senior Unsecured
06-24-13 6.000% 550,000 $838,557
EDF SA
(EUR) Senior Unsecured
02-05-18 5.000 750,000 1,168,669
France Government Bond OAT
(EUR)
04-25-12 5.000 540,000 794,728
04-25-13 4.000 7,020,000 10,423,950
10-25-16 5.000 3,180,000 5,110,329
10-25-19 3.750 2,000,000 2,995,804
France Telecom SA
(EUR) Senior Unsecured
02-21-17 4.750 1,180,000 1,798,438
Veolia Environnement
(EUR) Senior Unsecured
01-16-17 4.375 315,000 468,986
---------------
Total 27,137,980
- -------------------------------------------------------------------------------------
GERMANY (5.3%)
Bayerische Landesbank
(JPY) Senior Unsecured
04-22-13 1.400 170,000,000 2,151,340
Bundesrepublik Deutschland
(EUR)
01-04-15 3.750 1,650,000 2,498,535
07-04-19 3.500 2,120,000 3,195,167
07-04-27 6.500 4,140,000 8,389,129
07-04-28 4.750 2,415,000 4,136,686
07-04-34 4.750 4,025,000 7,134,435
Landwirtschaftliche Rentenbank
(AUD) Government Guaranteed
06-15-11 5.750 1,250,000 1,229,296
---------------
Total 28,734,588
- -------------------------------------------------------------------------------------
GREECE (0.3%)
Hellenic Republic Government Bond
(EUR) Senior Unsecured
03-20-24 4.700 1,800,000 1,541,697
- -------------------------------------------------------------------------------------
INDONESIA (1.5%)
Indonesia Government International Bond
Senior Unsecured
01-17-18 6.875 500,000(d) 602,500
10-12-35 8.500 190,000(d) 275,025
01-17-38 7.750 140,000(d) 188,300
Indonesia Treasury Bond
(IDR) Senior Unsecured
05-15-16 10.750 9,320,000,000 1,236,882
11-15-20 11.000 19,540,000,000 2,705,666
07-15-22 10.250 21,944,000,000 2,920,301
Perusahaan Penerbit SBSN
Senior Unsecured
04-23-14 8.800 160,000(d) 192,293
---------------
Total 8,120,967
- -------------------------------------------------------------------------------------
IRELAND (--%)
Ardagh Packaging Finance PLC
Senior Secured
10-15-17 7.375 116,000(d,k) 122,960
Warner Chilcott Co. LLC/Finance
09-15-18 7.750 134,000(d) 139,360
---------------
Total 262,320
- -------------------------------------------------------------------------------------
ITALY (3.0%)
Intesa Sanpaolo SpA
(EUR) Senior Unsecured
12-19-13 5.375 400,000 596,078
Italy Buoni Poliennali Del Tesoro
(EUR)
04-15-12 4.000 1,745,000 2,502,936
08-01-15 3.750 700,000 1,013,802
02-01-19 4.250 2,445,000 3,552,426
11-01-26 7.250 4,186,283 7,597,027
11-01-27 6.500 525,000 892,465
---------------
Total 16,154,734
- -------------------------------------------------------------------------------------
JAPAN (11.9%)
Bayer Holding Ltd.
(JPY)
06-28-12 1.955 40,000,000 501,275
Development Bank of Japan
(JPY) Government Guaranteed
06-20-12 1.400 326,000,000 4,127,095
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
JAPAN (CONT.)
Japan Government 10-Year Bond
(JPY) Senior Unsecured
06-20-12 1.400% 95,000,000 $1,204,818
12-20-12 1.000 708,000,000 8,956,794
12-20-14 1.300 200,000,000 2,589,166
09-20-17 1.700 811,000,000 10,911,423
Japan Government 20-Year Bond
(JPY) Senior Unsecured
03-20-20 2.400 420,000,000 5,946,343
12-20-22 1.400 496,000,000 6,277,423
12-20-26 2.100 757,000,000 10,047,395
09-20-29 2.100 300,000,000 3,916,899
Japan Government 30-Year Bond
(JPY) Senior Unsecured
12-20-34 2.400 283,000,000 3,838,299
03-20-39 2.300 123,000,000 1,636,473
Japanese Government CPI-Linked Bond
(JPY) Senior Unsecured
03-10-18 1.400 345,664,000(j) 4,331,603
---------------
Total 64,285,006
- -------------------------------------------------------------------------------------
KAZAKHSTAN (0.1%)
KazMunaiGaz Finance Sub BV
07-02-18 9.125 $250,000(d) 306,563
- -------------------------------------------------------------------------------------
LITHUANIA (0.1%)
Lithuania Government International Bond
Senior Unsecured
09-14-17 5.125 760,000(d) 779,000
- -------------------------------------------------------------------------------------
LUXEMBOURG (0.2%)
ArcelorMittal
Senior Unsecured
06-01-19 9.850 305,000 393,428
10-15-39 7.000 545,000 548,553
Expro Finance Luxembourg SCA
Senior Secured
12-15-16 8.500 349,000(d) 342,391
Telecom Italia Capital SA
07-18-36 7.200 35,000 38,050
---------------
Total 1,322,422
- -------------------------------------------------------------------------------------
MALAYSIA (0.5%)
Petronas Capital Ltd.
05-22-12 7.000 500,000(d) 542,709
08-12-19 5.250 1,980,000(d) 2,205,885
---------------
Total 2,748,594
- -------------------------------------------------------------------------------------
MEXICO (1.7%)
Mexican Bonos
(MXN)
12-19-13 8.000 35,940,000 3,155,680
12-17-15 8.000 55,280,000 4,974,251
Mexican Government International Bond
Senior Unsecured
09-27-34 6.750 270,000 333,450
Pemex Project Funding Master Trust
03-01-18 5.750 617,000 692,702
---------------
Total 9,156,083
- -------------------------------------------------------------------------------------
NETHERLANDS (3.6%)
Allianz Finance II BV
(EUR)
11-23-16 4.000 400,000 589,702
BMW Finance NV
(EUR)
09-19-13 8.875 650,000 1,069,089
Deutsche Telekom International Finance BV
(EUR)
01-19-15 4.000 1,335,000 1,951,496
Deutsche Telekom International Finance BV
(GBP)
12-09-10 6.250 415,000 668,180
E.ON International Finance BV
(EUR)
10-02-17 5.500 535,000 857,509
ING Groep NV
(EUR) Senior Unsecured
05-31-17 4.750 1,205,000 1,775,502
Netherlands Government Bond
(EUR)
07-15-12 5.000 1,530,000 2,269,119
07-15-13 4.250 2,345,000 3,524,978
07-15-20 3.500 4,045,000 5,989,791
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
NETHERLANDS (CONT.)
Rabobank Nederland NV
(EUR) Senior Unsecured
04-04-12 4.125% 600,000 $863,765
---------------
Total 19,559,131
- -------------------------------------------------------------------------------------
NEW ZEALAND (1.1%)
ANZ National International Ltd.
Bank Guaranteed
08-10-15 3.125 $1,270,000(d,k) 1,299,420
New Zealand Government Bond
(NZD) Senior Unsecured
04-15-13 6.500 5,850,000 4,710,747
---------------
Total 6,010,167
- -------------------------------------------------------------------------------------
NORWAY (1.0%)
Norway Government Bond
(NOK)
05-16-11 6.000 31,250,000 5,442,113
- -------------------------------------------------------------------------------------
PHILIPPINE ISLANDS (0.3%)
Philippine Government International Bond
Senior Unsecured
01-15-21 4.000 129,000 128,839
01-14-31 7.750 405,000 534,600
Power Sector Assets & Liabilities Management Corp.
Government Guaranteed
05-27-19 7.250 790,000(d) 962,813
---------------
Total 1,626,252
- -------------------------------------------------------------------------------------
POLAND (1.7%)
Poland Government Bond
(PLN)
04-25-13 5.250 6,400,000 2,269,578
10-25-17 5.250 20,485,000 7,110,202
---------------
Total 9,379,780
- -------------------------------------------------------------------------------------
QATAR (0.3%)
Qatar Government International Bond
Senior Unsecured
04-09-19 6.550 550,000(d) 657,406
Qatari Diar Finance QSC
Government Guaranteed
07-21-20 5.000 500,000(d) 523,318
Ras Laffan Liquefied Natural Gas Co., Ltd. III
Senior Secured
09-30-14 5.500 310,000(d) 343,723
---------------
Total 1,524,447
- -------------------------------------------------------------------------------------
RUSSIA (0.4%)
AK Transneft OJSC Via TransCapitalInvest Ltd.
Senior Unsecured
03-05-14 5.670 200,000(d) 213,151
08-07-18 8.700 100,000(d) 125,720
Gazprom Via Gaz Capital SA
Senior Unsecured
11-22-16 6.212 100,000(d) 106,625
08-16-37 7.288 230,000(d) 249,550
Russian Foreign Bond -- Eurobond
03-31-30 7.500 1,159,025(d) 1,385,035
---------------
Total 2,080,081
- -------------------------------------------------------------------------------------
SOUTH AFRICA (0.5%)
South Africa Government Bond
(ZAR) Senior Unsecured
12-21-14 8.750 15,975,000 2,435,322
- -------------------------------------------------------------------------------------
SOUTH KOREA (0.3%)
Export-Import Bank of Korea
Senior Unsecured
01-21-14 8.125 810,000 948,430
01-14-15 5.875 450,000 502,088
---------------
Total 1,450,518
- -------------------------------------------------------------------------------------
SPAIN (2.6%)
Ayt Cedulas Cajas Global
(EUR)
06-14-18 4.250 1,500,000 1,886,159
Caja de Ahorros y Monte de Piedad de Madrid
(EUR)
03-25-11 3.500 1,800,000 2,509,344
Instituto de Credito Oficial
(AUD) Government Guaranteed
03-08-11 5.500 1,210,000 1,180,465
Santander International Debt SA
(EUR) Bank Guaranteed
04-11-11 5.125 1,200,000 1,689,807
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
SPAIN (CONT.)
Santander U.S. Debt SA Unipersonal
Bank Guaranteed
10-07-15 3.781% $1,000,000(d) $1,015,049
Spain Government Bond
(EUR)
07-30-17 5.500 2,050,000 3,147,080
Telefonica Emisiones SAU
01-15-15 4.949 1,440,000 1,589,893
Telefonica Emisiones SAU
(EUR)
02-02-16 4.375 550,000 796,604
---------------
Total 13,814,401
- -------------------------------------------------------------------------------------
SUPRA-NATIONAL (0.3%)
Corp. Andina de Fomento
Senior Unsecured
06-04-19 8.125 730,000 904,462
European Investment Bank
(GBP) Senior Unsecured
12-07-11 5.500 445,000 749,192
---------------
Total 1,653,654
- -------------------------------------------------------------------------------------
SWEDEN (1.0%)
Sweden Government Bond
(SEK)
05-05-14 6.750 30,525,000 5,298,214
- -------------------------------------------------------------------------------------
TURKEY (0.3%)
Turkey Government International Bond
Senior Unsecured
07-14-17 7.500 350,000 435,313
04-03-18 6.750 204,000 244,800
06-05-20 7.000 235,000 291,400
03-17-36 6.875 540,000 649,350
---------------
Total 1,620,863
- -------------------------------------------------------------------------------------
UNITED KINGDOM (4.6%)
MetLife of Connecticut
(JPY)
05-24-12 0.653 100,000,000(i) 1,193,364
SABMiller PLC
Senior Unsecured
01-15-14 5.700 1,275,000(d) 1,433,576
United Kingdom Gilt
(GBP)
09-07-16 4.000 1,910,000 3,374,208
03-07-18 5.000 1,700,000 3,162,316
03-07-19 4.500 2,240,000 4,015,542
03-07-25 5.000 660,000 1,214,145
12-07-27 4.250 1,750,000 2,932,966
03-07-36 4.250 1,400,000 2,285,810
12-07-38 4.750 1,690,000 2,980,114
12-07-49 4.250 1,185,000 1,931,547
---------------
Total 24,523,588
- -------------------------------------------------------------------------------------
UNITED STATES (33.3%)
Ally Financial, Inc.
09-15-20 7.500 $480,000(d) 518,400
Amkor Technology, Inc.
Senior Unsecured
05-01-18 7.375 237,000(d,k) 246,480
Anadarko Petroleum Corp.
Senior Unsecured
09-15-16 5.950 435,000 475,738
Anheuser-Busch InBev Worldwide, Inc.
01-15-14 7.200 710,000(d) 832,310
11-15-14 5.375 2,620,000(d) 2,959,900
Ashland, Inc.
06-01-17 9.125 180,000 207,450
Associated Materials LLC
Senior Secured
11-01-17 9.125 90,000(d) 94,725
AT&T, Inc.
Senior Unsecured
02-15-39 6.550 2,570,000 2,927,489
Ball Corp.
09-01-19 7.375 35,000 39,025
09-15-20 6.750 234,000 257,985
Bank of America Corp.
(GBP) Senior Unsecured
02-02-11 0.835 950,000(i) 1,519,053
Bank of America Corp.
Senior Unsecured
05-01-18 5.650 2,190,000 2,306,879
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
22 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
BellSouth Corp.
Senior Unsecured
10-15-11 6.000% $785,000 $825,572
Berry Petroleum Co.
Senior Unsecured
11-01-20 6.750 50,000(g) 51,500
Brocade Communications Systems, Inc.
Senior Secured
01-15-18 6.625 76,000 80,940
01-15-20 6.875 67,000(k) 72,025
Burlington Northern Santa Fe LLC
Senior Unsecured
05-01-40 5.750 730,000 774,201
Cardtronics, Inc.
09-01-18 8.250 190,000 201,400
CC Holdings GS V LLC/Crown Castle GS III Corp.
Senior Secured
05-01-17 7.750 820,000(d) 920,450
CCO Holdings LLC/Capital Corp.
04-30-18 7.875 136,000(d) 144,500
Celanese U.S. Holdings LLC
10-15-18 6.625 232,000(d) 244,180
CenterPoint Energy Houston Electric LLC
03-01-14 7.000 605,000 714,664
CenterPoint Energy Resources Corp.
Senior Unsecured
02-15-11 7.750 1,270,000 1,295,693
CF Industries, Inc.
05-01-18 6.875 65,000 73,938
05-01-20 7.125 65,000 75,563
Charter Communications Operating LLC/Capital
Secured
04-30-12 8.000 140,000(d) 148,925
Chesapeake Energy Corp.
08-15-20 6.625 560,000 593,599
CIT Group, Inc.
Senior Secured
05-01-16 7.000 535,000 532,994
CitiFinancial Auto Issuance Trust
Series 2009-1 Class A2
11-15-12 1.830 3,463,227(d) 3,477,835
Citigroup Commercial Mortgage Trust
Series 2006-C5 Class A4
10-15-49 5.431 1,700,000(f) 1,822,872
Citigroup, Inc.
(EUR) Senior Unsecured
08-02-19 5.000 595,000 848,923
Citigroup, Inc.
Senior Unsecured
08-09-20 5.375 755,000 794,614
Colorado Interstate Gas Co.
Senior Unsecured
11-15-15 6.800 3,170,000 3,769,266
Comcast Corp.
07-01-39 6.550 865,000 968,540
Commercial Mortgage Pass-Through Certificates
Series 2006-CN2A Class BFL
02-05-19 0.567 400,000(d,f,i) 355,632
Cott Beverages, Inc.
09-01-18 8.125 34,000 36,805
Credit Suisse First Boston Mortgage Securities Corp.
Series 2004-C2 Class A1
05-15-36 3.819 446,156(f) 464,637
Cricket Communications, Inc.
Senior Secured
05-15-16 7.750 317,000 341,568
CSC Holdings LLC
Senior Unsecured
02-15-19 8.625 100,000 115,625
CVS Caremark Corp.
Senior Unsecured
09-15-39 6.125 305,000 328,682
Del Monte Corp.
10-15-19 7.500 370,000 406,075
Denbury Resources, Inc.
04-01-13 7.500 170,000 172,338
03-01-16 9.750 310,000 351,075
DIRECTV Holdings LLC/Financing Co., Inc.
02-15-16 3.125 1,465,000 1,500,371
DISH DBS Corp.
10-01-14 6.625 440,000 465,850
02-01-16 7.125 290,000 307,400
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 23
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
Dominion Resources, Inc.
Senior Unsecured
08-01-33 5.250% $1,460,000 $1,670,006
Dr Pepper Snapple Group, Inc.
12-21-11 1.700 1,310,000 1,321,160
DTE Energy Co.
Senior Unsecured
06-01-11 7.050 115,000 119,142
05-15-14 7.625 1,540,000 1,831,057
Duke Energy Corp.
Senior Unsecured
02-01-14 6.300 450,000 515,795
Duke Energy Indiana, Inc.
1st Mortgage
08-15-38 6.350 940,000 1,113,623
Dunkin Securitization
Series 2006-1 Class A2 (AMBAC)
06-20-31 5.779 1,600,000(d,m) 1,622,544
El Paso Corp.
Senior Unsecured
09-15-20 6.500 405,000(d) 421,200
Embarq Corp.
Senior Unsecured
06-01-36 7.995 920,000 1,005,204
Energy Transfer Equity LP
10-15-20 7.500 285,000(k) 310,650
Entravision Communications Corp.
Senior Secured
08-01-17 8.750 300,000(d) 319,500
ERAC USA Finance LLC
10-15-37 7.000 905,000(d) 1,001,847
Esterline Technologies Corp.
08-01-20 7.000 15,000(d) 15,938
Federal Home Loan Mortgage Corp. #A11799
08-01-33 6.500 130,955(f) 147,398
Federal Home Loan Mortgage Corp. #A15881
11-01-33 5.000 905,051(f) 975,087
Federal Home Loan Mortgage Corp. #E91486
09-01-17 6.500 89,086(f) 98,077
Federal Home Loan Mortgage Corp. #E99684
10-01-18 5.000 346,789(f) 375,155
Federal Home Loan Mortgage Corp. #G01960
12-01-35 5.000 1,983,697(f) 2,117,376
Federal National Mortgage Association
10-15-14 4.625 1,565,000 1,784,123
Federal National Mortgage Association #545874
08-01-32 6.500 129,018(f) 147,245
Federal National Mortgage Association #555528
04-01-33 6.000 552,513(f) 613,943
Federal National Mortgage Association #555734
07-01-23 5.000 564,651(f) 602,925
Federal National Mortgage Association #555740
08-01-18 4.500 721,125(f) 770,392
Federal National Mortgage Association #555851
01-01-33 6.500 651,783(f) 736,675
Federal National Mortgage Association #575487
04-01-17 6.500 244,469(f) 266,505
Federal National Mortgage Association #621581
12-01-31 6.500 176,739(f) 199,937
Federal National Mortgage Association #633966
03-01-17 6.000 59,467(f) 64,711
Federal National Mortgage Association #634749
03-01-17 5.500 347,427(f) 381,505
Federal National Mortgage Association #640996
05-01-32 7.500 239,053(f) 275,362
Federal National Mortgage Association #643381
06-01-17 6.000 133,307(f) 145,063
Federal National Mortgage Association #645053
05-01-32 7.000 422,284(f) 483,717
Federal National Mortgage Association #646147
06-01-32 7.000 248,467(f) 284,793
Federal National Mortgage Association #652284
08-01-32 6.500 200,588(f) 226,463
Federal National Mortgage Association #653145
07-01-17 6.000 116,919(f) 127,032
Federal National Mortgage Association #653730
09-01-32 6.500 139,381(f) 158,979
Federal National Mortgage Association #655589
08-01-32 6.500 939,844(f) 1,062,734
Federal National Mortgage Association #666424
08-01-32 6.500 150,598(f) 170,024
Federal National Mortgage Association #670461
11-01-32 7.500 140,242(f) 161,542
Federal National Mortgage Association #677333
01-01-33 6.000 2,664,233(f) 2,960,452
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
24 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
Federal National Mortgage Association #688034
03-01-33 5.500% $297,965(f) $326,120
Federal National Mortgage Association #688691
03-01-33 5.500 393,751(f) 426,886
Federal National Mortgage Association #711503
06-01-33 5.500 647,340(f) 705,595
Federal National Mortgage Association #720576
06-01-33 5.000 1,525,618(f) 1,633,909
Federal National Mortgage Association #735029
09-01-13 5.322 599,837(f) 649,397
Federal National Mortgage Association #741850
09-01-33 5.500 1,284,380(f) 1,392,463
Federal National Mortgage Association #753507
12-01-18 5.000 1,202,141(f) 1,291,191
Federal National Mortgage Association #755498
11-01-18 5.500 528,518(f) 576,255
Federal National Mortgage Association #756788
11-01-33 6.500 209,545(f) 236,369
Federal National Mortgage Association #928019
01-01-37 5.500 1,282,397(f,o) 1,400,733
Florida Power Corp.
1st Mortgage
06-15-38 6.400 210,000 251,004
04-01-40 5.650 600,000 654,927
Forest Oil Corp.
02-15-14 8.500 210,000 232,575
Frontier Communications Corp.
Senior Unsecured
04-15-15 7.875 78,000 87,360
04-15-17 8.250 194,000 221,160
04-15-20 8.500 158,000 182,490
General Electric Capital Assurance Co.
Series 2003-1 Class A4
05-12-35 5.254 370,459(d,f) 399,491
General Electric Capital Corp.
(GBP) Senior Unsecured
05-17-12 6.125 474,000 803,619
General Electric Capital Corp.
Senior Unsecured
09-16-20 4.375 2,320,000 2,340,216
01-10-39 6.875 290,000 333,435
Georgia-Pacific LLC
05-01-16 8.250 230,000(d) 263,925
11-01-20 5.400 260,000(d,g) 262,600
Government National Mortgage Association #604708
10-15-33 5.500 647,584(f) 706,268
Government National Mortgage Association
CMO I.O. Series 2002-80 Class CI
01-20-32 0.000 57,692(f,l) 494
Graphic Packaging International, Inc.
10-01-18 7.875 38,000 40,090
Greenwich Capital Commercial Funding Corp.
Series 2003-C1 Class A3
07-05-35 3.858 725,000(f) 743,691
Greenwich Capital Commercial Funding Corp.
Series 2004-GG1 Class A5
06-10-36 4.883 500,000(f) 507,396
Greenwich Capital Commercial Funding Corp.
Series 2007-GG9 Class A4
03-10-39 5.444 2,100,000(f) 2,244,829
Greif, Inc.
Senior Unsecured
02-01-17 6.750 195,000 203,288
GS Mortgage Securities Corp. II
Series 2007-EOP Class J
03-06-20 1.107 1,250,000(d,f,i) 1,066,555
GS Mortgage Securities Corp. II
Series 2007-GG10 Class F
08-10-45 5.808 775,000(f) 100,841
GTP Towers Issuer LLC
02-15-15 4.436 450,000(d) 488,929
Harborview Mortgage Loan Trust
CMO Series 2004-1 Class 4A
04-19-34 4.757 1,270,077(f,i) 1,173,249
HCA, Inc.
Senior Secured
02-15-17 9.875 325,000 364,812
09-15-20 7.250 745,000 814,843
HJ Heinz Finance Co.
07-15-11 6.625 500,000 520,353
Indiana Michigan Power Co.
Senior Unsecured
03-15-37 6.050 85,000 90,880
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 25
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
Invista
05-01-12 9.250% $103,000(d) $104,674
Jarden Corp.
05-01-16 8.000 300,000 331,125
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2003-LN1 Class A1
10-15-37 4.134 154,230(f) 160,693
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2003-ML1A Class A1
03-12-39 3.972 111,363(f) 114,623
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2003-ML1A Class A2
03-12-39 4.767 1,200,000(f) 1,277,702
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2005-LDP3 Class ASB
08-15-42 4.893 1,109,074(f) 1,170,972
JPMorgan Chase & Co.
Senior Unsecured
10-15-20 4.250 2,155,000 2,170,720
K Hovnanian Enterprises, Inc.
Senior Secured
10-15-16 10.625 470,000 478,225
Kraft Foods, Inc.
Senior Unsecured
02-19-14 6.750 145,000 169,376
08-11-17 6.500 609,000 731,120
02-01-18 6.125 2,830,000 3,333,793
Lamar Media Corp.
04-01-14 9.750 255,000 294,525
04-15-18 7.875 73,000 77,928
LB-UBS Commercial Mortgage Trust
Series 2004-C2 Class A3
03-15-29 3.973 750,000(f) 765,585
LB-UBS Commercial Mortgage Trust
Series 2006-C4 Class AAB
06-15-32 6.055 750,000(f) 832,515
LB-UBS Commercial Mortgage Trust
Series 2007-C7 Class A3
09-15-45 5.866 1,660,000(f) 1,770,805
Lear Corp.
03-15-18 7.875 214,000 233,260
03-15-20 8.125 117,000(k) 129,285
LifePoint Hospitals, Inc.
10-01-20 6.625 75,000(d) 78,938
LyondellBasell Industries
Senior Secured
11-01-17 8.000 531,000(d) 582,773
Mantech International Corp.
04-15-18 7.250 57,000 60,563
Mellon Funding Corp.
(GBP)
11-08-11 6.375 370,000 616,572
Metropolitan Life Global Funding I
(GBP) Senior Secured
01-27-11 4.625 540,000 869,263
MGM Resorts International
Senior Secured
11-15-17 11.125 290,000 333,500
Midwest Generation LLC
Pass-Through Certificates
01-02-16 8.560 135,366 135,705
Morgan Stanley Capital I
Series 2004-HQ4 Class A5
04-14-40 4.590 750,000(f) 754,980
Morgan Stanley Capital I
Series 2006-T23 Class AAB
08-12-41 5.795 575,000(f) 633,890
Morgan Stanley
(EUR) Senior Unsecured
10-02-17 5.500 625,000 904,150
Morgan Stanley
(GBP) Senior Unsecured
04-11-11 7.500 470,000 765,056
Morgan Stanley
Senior Unsecured
04-01-18 6.625 205,000 230,262
07-24-20 5.500 1,180,000 1,228,024
Nalco Co.
Senior Notes
05-15-17 8.250 460,000 512,325
National Collegiate Student Loan Trust
CMO I.O. Series 2006-3 Class AIO
01-25-12 5.880 2,400,000(l) 160,225
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
26 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
Nevada Power Co.
01-15-15 5.875% $1,000,000 $1,148,707
05-15-18 6.500 365,000 439,261
Nextel Communications, Inc.
08-01-15 7.375 445,000 446,669
Nisource Finance Corp.
09-15-17 5.250 2,855,000 3,114,371
09-15-20 5.450 970,000 1,046,822
Northern States Power Co.
1st Mortgage
08-28-12 8.000 515,000 580,575
Northwest Pipeline GP
Senior Unsecured
04-15-17 5.950 1,085,000 1,250,536
NRG Energy, Inc.
02-01-16 7.375 1,125,000 1,171,406
Oracle Corp.
Senior Notes
07-15-40 5.375 90,000(d) 94,058
Oshkosh Corp.
03-01-17 8.250 146,000 159,504
03-01-20 8.500 119,000 131,793
Pacific Gas & Electric Co.
Senior Unsecured
01-15-40 5.400 425,000 441,776
PacifiCorp
1st Mortgage
10-15-37 6.250 200,000 233,522
01-15-39 6.000 440,000 499,058
Peabody Energy Corp.
09-15-20 6.500 250,000 279,375
Petrohawk Energy Corp.
08-01-14 10.500 260,000 296,400
Phillips-Van Heusen Corp.
Senior Unsecured
05-15-20 7.375 110,000 118,800
Pinafore LLC/Inc.
Senior Secured
10-01-18 9.000 30,000(d) 32,100
Potomac Electric Power Co.
1st Mortgage
04-15-14 4.650 280,000 306,555
PPL Electric Utilities Corp.
1st Mortgage
11-30-13 7.125 2,850,000 3,346,375
Progress Energy, Inc.
Senior Unsecured
03-01-11 7.100 325,000 331,751
03-15-14 6.050 875,000 996,791
QEP Resources, Inc.
Senior Unsecured
03-01-21 6.875 170,000 184,875
Quicksilver Resources, Inc.
08-01-15 8.250 245,000 248,675
QVC, Inc.
Senior Secured
04-15-17 7.125 316,000(d) 336,540
10-15-20 7.375 316,000(d) 338,120
Qwest Communications International, Inc.
04-01-18 7.125 370,000(d) 393,125
Range Resources Corp.
05-15-16 7.500 265,000 277,588
05-15-19 8.000 720,000 797,399
Regal Cinemas Corp.
07-15-19 8.625 200,000 213,500
Regency Energy Partners LP/Finance Corp.
06-01-16 9.375 5,000(k) 5,600
12-01-18 6.875 75,000 78,844
Renaissance Home Equity Loan Trust
Series 2005-4 Class A3
02-25-36 5.565 369,862 350,465
Reynolds Group Issuer, Inc./LLC
Senior Secured
10-15-16 7.750 270,000(d) 286,200
04-15-19 7.125 234,000(d) 243,945
RR Donnelley & Sons Co.
Senior Unsecured
01-15-17 6.125 2,190,000 2,302,471
Santander Drive Auto Receivables Trust
Series 2007-1 Class A4 (FGIC)
09-15-14 0.306 764,802(i,m) 760,039
SBA Telecommunications, Inc.
08-15-16 8.000 240,000 264,600
08-15-19 8.250 85,000 95,625
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 27
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
SCANA Corp.
Senior Unsecured
05-15-11 6.875% $205,000 $211,464
Select Medical Corp.
02-01-15 7.625 242,000 245,328
Sierra Pacific Power Co.
05-15-16 6.000 2,935,000 3,437,590
Southern California Gas Co.
1st Mortgage
03-15-14 5.500 845,000 959,964
Southern Natural Gas Co.
Senior Unsecured
04-01-17 5.900 2,131,000(d) 2,337,193
Spectrum Brands Holdings, Inc.
Senior Secured
06-15-18 9.500 100,000(d) 111,000
Speedway Motorsports, Inc.
06-01-16 8.750 380,000 415,150
Sprint Nextel Corp.
Senior Unsecured
08-15-17 8.375 150,000(k) 165,375
Tampa Electric Co.
Senior Unsecured
05-15-18 6.100 620,000 728,440
TCM Sub LLC
01-15-15 3.550 845,000(d) 893,824
The Cleveland Electric Illuminating Co.
1st Mortgage
11-15-18 8.875 750,000 992,151
The Dow Chemical Co.
(EUR) Senior Unsecured
05-27-11 4.625 520,000 731,183
The Dow Chemical Co.
Senior Unsecured
05-15-19 8.550 825,000 1,059,577
The Goldman Sachs Group, Inc.
(EUR) Senior Unsecured
05-02-18 6.375 350,000 535,835
The Goldman Sachs Group, Inc.
Senior Unsecured
03-15-20 5.375 860,000 909,944
The Hertz Corp.
10-15-18 7.500 155,000(d) 159,263
The Manitowoc Co., Inc.
11-01-13 7.125 470,000(k) 473,525
11-01-20 8.500 90,000 93,938
The Toledo Edison Co.
Senior Secured
05-15-37 6.150 450,000 475,796
Transcontinental Gas Pipe Line Co. LLC
Senior Unsecured
04-15-16 6.400 3,590,000 4,268,547
tw telecom holdings, inc.
03-01-18 8.000 216,000 233,280
U.S. Treasury
10-31-11 1.000 670,000(k) 674,999
07-15-12 1.500 2,130,000(k) 2,174,097
09-30-15 1.250 1,293,000(k) 1,299,062
07-31-17 2.375 715,000(k) 739,578
08-15-20 2.625 1,525,000(k) 1,526,430
08-15-23 6.250 4,400,000 5,882,251
05-15-40 4.375 4,989,000 5,314,083
United States Cellular Corp.
Senior Unsecured
12-15-33 6.700 165,000 166,985
United States Steel Corp.
Senior Unsecured
02-01-18 7.000 63,000 64,418
04-01-20 7.375 173,000 179,920
Valeant Pharmaceuticals International
10-01-20 7.000 465,000(d) 488,250
Valmont Industries, Inc.
04-20-20 6.625 522,000 544,752
Verizon New York, Inc.
Senior Unsecured
04-01-12 6.875 2,380,000 2,567,060
04-01-32 7.375 1,255,000 1,437,033
Wachovia Bank Commercial Mortgage Trust
Series 2005-C20 Class A5
07-15-42 5.087 800,000(f) 818,824
Wachovia Bank Commercial Mortgage Trust
Series 2006-C24 Class APB
03-15-45 5.576 500,000(f) 537,680
Wachovia Bank Commercial Mortgage Trust
Series 2006-C27 Class APB
07-15-45 5.727 650,000(f) 693,204
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
28 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BONDS (CONTINUED)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
UNITED STATES (CONT.)
Wells Fargo & Co.
(EUR) Senior Unsecured
11-03-16 4.125% 330,000 $476,366
Wells Fargo & Co.
(GBP) Senior Unsecured
11-30-10 4.750 1,300,000 2,087,618
Windstream Corp.
08-01-16 8.625 $144,000 153,000
03-15-19 7.000 40,000 40,450
Wyndham Worldwide Corp.
Senior Unsecured
02-01-18 5.750 107,000 111,187
XM Satellite Radio, Inc.
Senior Unsecured
11-01-18 7.625 237,000(d) 242,333
---------------
Total 179,321,720
- -------------------------------------------------------------------------------------
URUGUAY (0.2%)
Uruguay Government International Bond
11-18-22 8.000 450,000 605,250
Uruguay Government International Bond
Senior Unsecured
03-21-36 7.625 275,000 364,375
---------------
Total 969,625
- -------------------------------------------------------------------------------------
VENEZUELA (0.4%)
Petroleos de Venezuela SA
04-12-17 5.250 1,190,000 702,100
Venezuela Government International Bond
02-26-16 5.750 620,000 441,750
Venezuela Government International Bond
Senior Unsecured
10-08-14 8.500 160,000 134,800
05-07-23 9.000 931,000 623,863
---------------
Total 1,902,513
- -------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $455,517,284) $501,696,461
- -------------------------------------------------------------------------------------
<Caption>
SENIOR LOANS (0.1%)(p)
COUPON PRINCIPAL
BORROWER RATE AMOUNT VALUE(a)
UNITED STATES
Fairpoint Communications, Inc.
Tranche B Term Loan
03-31-15 1.750% $558,658(b,n) $362,837
Goodman Global, Inc.
1st Lien Term Loan
TBD TBD 35,000(g,h) 35,433
- -------------------------------------------------------------------------------------
TOTAL SENIOR LOANS
(Cost: $353,820) $398,270
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (2.0%)
SHARES VALUE(a)
MONEY MARKET FUND
Columbia Short-Term Cash Fund, 0.241% 10,951,314(q) $10,951,314
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $10,951,314) $10,951,314
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (0.6%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS(r)
Societe Generale
dated 10-29-10, matures 11-01-10,
repurchase price
$3,005,095 0.230% $3,005,038 $3,005,038
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN
(Cost: $3,005,038) $3,005,038
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $469,827,456)(s) $516,051,083
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 29
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
INVESTMENTS IN DERIVATIVES
FUTURES CONTRACTS OUTSTANDING AT OCT. 31, 2010
<Table>
<Caption>
NUMBER OF UNREALIZED
CONTRACTS NOTIONAL EXPIRATION APPRECIATION
CONTRACT DESCRIPTION LONG (SHORT) MARKET VALUE DATE (DEPRECIATION)
- ------------------------------------------------------------------------------------
Euro-Bobl, 5-year 9 $1,498,097 Dec. 2010 $(11,599)
Euro-Bund, 10-year (25) (4,494,944) Dec. 2010 41,628
Japanese Government
Bond, 10-year 4 7,118,181 Dec. 2010 86,414
U.S. Long Bond, 20-year 25 3,273,437 Dec. 2010 (28,163)
U.S. Treasury Note, 5-
year (137) (16,656,204) Jan. 2011 (236,542)
U.S. Treasury Note, 10-
year (105) (13,259,531) Dec. 2010 (177,650)
U.S. Treasury Ultra
Bond, 30-year (23) (3,101,406) Dec. 2010 178,575
- ------------------------------------------------------------------------------------
Total $(147,337)
- ------------------------------------------------------------------------------------
</Table>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS OPEN AT OCT. 31, 2010
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
COUNTERPARTY EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
- ----------------------------------------------------------------------------------------------
UBS Securities Nov. 5, 2010 2,290,987 3,935,000 $23,621 $--
(USD) (BRL)
J.P. Morgan Nov. 8, 2010 17,984,780 1,506,585,000 738,179 --
Securities, Inc.
(USD) (JPY)
HSBC Securities (USA), Nov. 12, 2010 280,000 446,251 -- (2,341)
Inc.
(GBP) (USD)
Barclays Bank PLC Nov. 15, 2010 2,188,000 2,486,420 -- (46,434)
(GBP) (EUR)
HSBC Securities (USA), Nov. 22, 2010 6,150,000 4,721,598 -- (30,494)
Inc.
(SGD) (USD)
J.P. Morgan Nov. 23, 2010 2,497,795 31,150,000 21,365 --
Securities, Inc.
(USD) (MXN)
UBS Securities Nov. 29, 2010 3,377,000 2,513,501 -- (55,522)
(NZD) (USD)
HSBC Securities (USA), Dec. 2, 2010 4,877,128 5,038,000 58,831 --
Inc.
(USD) (CAD)
State Street Bank & Dec. 6, 2010 4,358,000 6,056,683 -- (4,569)
Trust Company
(EUR) (USD)
State Street Bank & Dec. 6, 2010 3,836,000 5,392,687 57,450 --
Trust Company
(EUR) (USD)
HSBC Securities (USA), Dec. 6, 2010 5,125,446 229,620,000 19,072 --
Inc.
(USD) (INR)
HSBC Securities (USA), Dec. 7, 2010 5,260,000 5,072,113 -- (58,769)
Inc.
(AUD) (USD)
- ----------------------------------------------------------------------------------------------
Total $918,518 $(198,129)
- ----------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
30 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
AUD -- Australian Dollar
BRL -- Brazilian Real
CAD -- Canadian Dollar
CMO -- Collateralized Mortgage Obligation
CZK -- Czech Koruna
DKK -- Danish Krone
EUR -- European Monetary Unit
GBP -- British Pound Sterling
IDR -- Indonesian Rupiah
INR -- Indian Rupee
I.O. -- Interest Only
JPY -- Japanese Yen
MXN -- Mexican Peso
NOK -- Norwegian Krone
NZD -- New Zealand Dollar
PLN -- Polish Zloty
SEK -- Swedish Krona
SGD -- Singapore Dollar
ZAR -- South African Rand
</Table>
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security
may be determined to be liquid under guidelines established by the Fund's
Board of Directors. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At Oct. 31, 2010,
the value of these securities amounted to $44,608,374 or 8.30% of net
assets.
(e) This is a variable rate security that entitles holders to receive only
interest payments. Interest is paid annually. The interest payment is based
on the Gross Domestic Product (GDP) level of the previous year for the
respective country. To the extent that the previous year's GDP exceeds the
'base case GDP', an interest payment is made equal to 0.012225 of the
difference.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 31
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(f) Mortgage-backed securities represent direct or indirect participations in,
or are secured by and payable from, mortgage loans secured by real
property, and include single- and multi-class pass-through securities and
collateralized mortgage obligations. These securities may be issued or
guaranteed by U.S. government agencies or instrumentalities, or by private
issuers, generally originators and investors in mortgage loans, including
savings associations, mortgage bankers, commercial banks, investment
bankers and special purpose entities. The maturity dates shown represent
the original maturity of the underlying obligation. Actual maturity may
vary based upon prepayment activity on these obligations. Unless otherwise
noted, the coupon rates presented are fixed rates.
(g) At Oct. 31, 2010, the cost of securities purchased, including interest
purchased, on a when-issued and/or other forward-commitment basis was
$1,708,205. See Note 2 to the financial statements.
(h) Represents a senior loan purchased on a when-issued or delayed-delivery
basis. Certain details associated with this purchase are not known prior to
the settlement date of the transaction. In addition, senior loans typically
trade without accrued interest and therefore a weighted average coupon rate
is not available prior to settlement. At settlement, if still unknown, the
borrower or counterparty will provide the Fund with the final weighted
average coupon rate and maturity date.
(i) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Oct. 31,
2010.
(j) Inflation-indexed bonds are securities in which the principal amount is
adjusted for inflation and the semiannual interest payments equal a fixed
percentage of the inflation-adjusted principal amount.
(k) At Oct. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(l) Interest only represents securities that entitle holders to receive only
interest payments on the underlying mortgages. The yield to maturity of an
interest only security is extremely sensitive to the rate of principal
payments on the underlying mortgage assets. A rapid (slow) rate of
principal repayments may have an adverse (positive) effect on yield to
maturity. The principal amount shown is the notional amount of the
underlying mortgages. The interest rate disclosed represents yield based
upon the estimated timing and amount of future cash flows at Oct. 31, 2010.
(m) The following abbreviations are used in the portfolio security descriptions
to identify the insurer and/or guarantor of the issue:
<Table>
AMBAC -- Ambac Assurance Corporation
FGIC -- Financial Guaranty Insurance Company
</Table>
(n) This position is in bankruptcy.
(o) At Oct. 31, 2010, investments in securities included securities valued at
$497,820 that were partially pledged as collateral to cover initial margin
deposits on open interest rate futures contracts.
- --------------------------------------------------------------------------------
32 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(p) Senior loans have rates of interest that float periodically based primarily
on the London Interbank Offered Rate ("LIBOR") and other short-term rates.
Remaining maturities of senior loans may be less than the stated maturities
shown as a result of contractual or optional prepayments by the borrower.
Such prepayments cannot be predicted with certainty.
(q) Affiliated Money Market Fund -- See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(r) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
SOCIETE GENERALE (0.230%)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Government National Mortgage Association $3,065,138
------------------------------------------------------------
Total market value of collateral securities $3,065,138
------------------------------------------------------------
</Table>
(s) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $474,975,951 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $44,332,818
Unrealized depreciation (3,257,686)
-----------------------------------------------------------
Net unrealized appreciation $41,075,132
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 33
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in valuations may
- --------------------------------------------------------------------------------
34 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
include, but are not limited to, financial statement analysis, capital account
balances, discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
Fair value at Oct. 31, 2010
----------------------------------------------------------------
Level 1 Level 2
quoted prices other Level 3
in active significant significant
markets for observable unobservable
DESCRIPTION(a) identical assets inputs(b) inputs Total
- --------------------------------------------------------------------------------------------
Bonds
Foreign Government
Obligations &
Agencies $-- $280,736,759 -- $280,736,759
U.S. Government
Obligations &
Agencies 17,610,500 1,784,123 -- 19,394,623
Asset-Backed
Securities -- 6,860,037 1,798,579 8,658,616
Commercial Mortgage-
Backed Securities -- 17,886,814 -- 17,886,814
Residential Mortgage-
Backed Securities -- 23,422,624 -- 23,422,624
Corporate Debt
Securities -- 150,403,661 1,193,364 151,597,025
- --------------------------------------------------------------------------------------------
Total Bonds 17,610,500 481,094,018 2,991,943 501,696,461
- --------------------------------------------------------------------------------------------
Other
Senior Loans -- 398,270 -- 398,270
Affiliated Money
Market Fund(c) 10,951,314 -- -- 10,951,314
Investments of Cash
Collateral Received
for Securities on
Loan -- 3,005,038 -- 3,005,038
- --------------------------------------------------------------------------------------------
Total Other 10,951,314 3,403,308 -- 14,354,622
- --------------------------------------------------------------------------------------------
Investments in
Securities 28,561,814 484,497,326 2,991,943 516,051,083
Derivatives(d)
Assets
Futures Contracts 306,617 -- -- 306,617
Forward Foreign
Currency Exchange
Contracts -- 918,518 -- 918,518
Liabilities
Futures Contracts (453,954) -- -- (453,954)
Forward Foreign
Currency Exchange
Contracts -- (198,129) -- (198,129)
- --------------------------------------------------------------------------------------------
Total $28,414,477 $485,217,715 $2,991,943 $516,624,135
- --------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) There were no significant transfers between Levels 1 and 2 during the
period.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 35
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Oct. 31, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
The following table is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value.
<Table>
<Caption>
ASSET- CORPORATE
BACKED DEBT
SECURITIES SECURITIES TOTAL
- ------------------------------------------------------------------------------
Balance as of Oct. 31, 2009 $2,060,678 $-- $2,060,678
Accrued discounts/premiums 403 27,576 27,979
Realized gain (loss) 13,557 -- 13,557
Change in unrealized appreciation
(depreciation)* (115,940) 118,392 2,452
Sales (611,479) -- (611,479)
Purchases 451,360 1,047,396 1,498,756
Transfers into Level 3 -- -- --
Transfers out of Level 3 -- -- --
- ------------------------------------------------------------------------------
Balance as of Oct. 31, 2010 $1,798,579 $1,193,364 $2,991,943
- ------------------------------------------------------------------------------
</Table>
* Change in unrealized appreciation (depreciation) relating to securities
held at Oct. 31, 2010 was $2,452, which is comprised of Asset-Backed
Securities of $(115,940) and Corporate Debt Securities of $118,392.
Transfers in and/or out of Level 3 are determined based on the fair value at the
beginning of the period for security positions held throughout the period.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
36 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
STATEMENT OF ASSETS AND
LIABILI-
TIE-
S ------------------------------------------------------------------------------
- -
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $455,871,104) $502,094,731
Affiliated money market fund (identified cost $10,951,314) 10,951,314
Investments of cash collateral received for securities on loan
(identified cost $3,005,038) 3,005,038
- -------------------------------------------------------------------------------
Total investments in securities (identified cost $469,827,456) 516,051,083
Foreign currency holdings (identified cost $15,464,984) 16,473,441
Receivable from Investment Manager 1,155
Capital shares receivable 3,606,385
Dividends and accrued interest receivable 6,329,571
Receivable for investment securities sold 8,704,537
Unrealized appreciation on forward foreign currency exchange
contracts 918,518
- -------------------------------------------------------------------------------
Total assets 552,084,690
- -------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 135,252
Capital shares payable 751,804
Payable for investment securities purchased 10,229,040
Payable upon return of securities loaned 3,005,038
Variation margin payable on futures contracts 120,748
Unrealized depreciation on forward foreign currency exchange
contracts 198,129
Accrued investment management services fees 10,303
Accrued distribution fees 2,842
Accrued transfer agency fees 9,410
Accrued administrative services fees 1,164
Accrued plan administration services fees 3
Other accrued expenses 141,609
- -------------------------------------------------------------------------------
Total liabilities 14,605,342
- -------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $537,479,348
- -------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 719,074
Additional paid-in capital 496,267,496
Undistributed net investment income 5,782,355
Accumulated net realized gain (loss) (13,304,257)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 48,014,680
- -------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $537,479,348
- -------------------------------------------------------------------------------
*Value of securities on loan $ 8,771,604
- -------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 37
STATEMENT OF ASSETS AND LIABILITIES (continued) -------------------------
OCT. 31, 2010
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $246,929,356 33,048,004 $7.47(1)
Class B $ 18,512,676 2,460,622 $7.52
Class C $ 6,162,276 827,014 $7.45
Class I $195,612,882 26,157,651 $7.48
Class R $ 5,341 716 $7.46
Class R4 $ 407,251 54,466 $7.48
Class W $ 69,842,043 9,357,911 $7.46
Class Z $ 7,523 1,006 $7.48
- ------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $7.84. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 4.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
38 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS -------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Interest $22,761,691
Income distributions from affiliated money market fund 20,786
Income from securities lending -- net 15,219
Foreign taxes withheld (73,968)
- ------------------------------------------------------------------------------
Total income 22,723,728
- ------------------------------------------------------------------------------
Expenses:
Investment management services fees 3,543,599
Distribution fees
Class A 613,780
Class B 256,387
Class C 61,070
Class R 16
Class R3 5
Class W 136,877
Transfer agency fees
Class A 564,981
Class B 63,609
Class C 14,350
Class R 3
Class R3 2
Class R4 168
Class R5 2
Class W 107,035
Class Z 1
Administrative services fees 400,481
Plan administration services fees
Class R 6
Class R3 5
Class R4 730
Compensation of board members 14,762
Custodian fees 74,385
Printing and postage 86,000
Registration fees 105,300
Professional fees 43,836
Other 50,526
- ------------------------------------------------------------------------------
Total expenses 6,137,916
Expenses waived/reimbursed by the Investment Manager and its
affiliates (347,134)
- ------------------------------------------------------------------------------
Total net expenses 5,790,782
- ------------------------------------------------------------------------------
Investment income (loss) -- net 16,932,946
- ------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 39
STATEMENT OF OPERATIONS (continued) -------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 3,955,678
Foreign currency transactions 1,765,452
Futures contracts (436,414)
- ------------------------------------------------------------------------------
Net realized gain (loss) on investments 5,284,716
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies 15,264,873
- ------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 20,549,589
- ------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $37,482,535
- ------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
40 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 16,932,946 $ 14,084,975
Net realized gain (loss) on investments 5,284,716 (6,929,498)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies 15,264,873 96,312,630
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations 37,482,535 103,468,107
- ----------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (5,782,358) (14,451,166)
Class B (373,924) (2,363,547)
Class C (100,533) (247,912)
Class I (4,785,145) (12,198,283)
Class R (60) N/A
Class R3 (25) N/A
Class R4 (6,931) (7,374)
Class R5 (32) N/A
Class W (1,333,863) (5,231,186)
- ----------------------------------------------------------------------------------------------
Total distributions (12,382,871) (34,499,468)
- ----------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 41
STATEMENTS OF CHANGES IN NET ASSETS (continued) -------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares $ 36,915,658 $ 34,656,103
Class B shares 3,786,502 4,760,950
Class C shares 2,784,327 1,892,530
Class I shares 46,339,721 44,757,560
Class R shares 5,000 N/A
Class R3 shares 5,000 N/A
Class R4 shares 253,675 42,421
Class R5 shares 5,000 N/A
Class W shares 42,249,228 47,318,890
Class Z shares 7,503 N/A
Reinvestment of distributions at net asset value
Class A shares 5,281,045 13,585,257
Class B shares 350,444 2,243,075
Class C shares 93,758 228,357
Class I shares 4,784,860 12,197,728
Class R4 shares 6,931 7,374
Class W shares 1,333,742 5,230,912
Conversions from Class B to Class A
Class A shares 7,184,278 6,603,705
Class B shares (7,184,278) (6,603,705)
Payments for redemptions
Class A shares (67,135,882) (83,721,233)
Class B shares (9,329,593) (17,508,600)
Class C shares (2,542,770) (1,461,886)
Class I shares (34,389,475) (115,655,803)
Class R3 shares (5,000) N/A
Class R4 shares (46,250) (18,796)
Class R5 shares (5,000) N/A
Class W shares (36,839,123) (135,568,998)
- ----------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (6,090,699) (187,014,159)
- ----------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 19,008,965 (118,045,520)
Net assets at beginning of year 518,470,383 636,515,903
- ----------------------------------------------------------------------------------------------
Net assets at end of year $537,479,348 $ 518,470,383
- ----------------------------------------------------------------------------------------------
Undistributed (excess of distributions over) net investment
income $ 5,782,355 $ (1,411,247)
- ----------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
42 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. For periods ended 2007 and after, per
share net investment income (loss) amounts are calculated based on average
shares outstanding during the period. Total returns assume reinvestment of all
dividends and distributions. Total returns do not reflect payment of sales
charges, if any, and are not annualized for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.10 $6.16 $6.89 $6.60 $6.59
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .23 .17 .22 .20 .19
Net gains (losses) (both realized and
unrealized) .31 1.15 (.73) .35 .14
- ------------------------------------------------------------------------------------------------------
Total from investment operations .54 1.32 (.51) .55 .33
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.17) (.38) (.22) (.26) (.32)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.47 $7.10 $6.16 $6.89 $6.60
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 7.70% 22.12% (7.66%) 8.63% 5.17%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.34% 1.36% 1.32% 1.37% 1.39%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.25% 1.25% 1.25% 1.25% 1.25%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.31% 2.72% 3.26% 3.08% 2.77%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $247 $253 $249 $259 $276
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77% 68%
- ------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 43
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.14 $6.23 $6.96 $6.67 $6.59
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .18 .13 .17 .15 .13
Net gains (losses) (both realized and
unrealized) .31 1.15 (.73) .35 .16
- ------------------------------------------------------------------------------------------------------
Total from investment operations .49 1.28 (.56) .50 .29
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.11) (.37) (.17) (.21) (.21)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.52 $7.14 $6.23 $6.96 $6.67
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 6.89% 21.14% (8.28%) 7.68% 4.45%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 2.10% 2.13% 2.09% 2.13% 2.16%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 2.02% 2.01% 2.01% 2.01% 2.02%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.58% 2.00% 2.49% 2.30% 1.98%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $19 $30 $42 $47 $63
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77% 68%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.08 $6.18 $6.91 $6.62 $6.57
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .18 .13 .17 .15 .14
Net gains (losses) (both realized and
unrealized) .31 1.14 (.73) .35 .13
- ------------------------------------------------------------------------------------------------------
Total from investment operations .49 1.27 (.56) .50 .27
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.12) (.37) (.17) (.21) (.22)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.45 $7.08 $6.18 $6.91 $6.62
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 6.95% 21.15% (8.27%) 7.75% 4.25%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 2.10% 2.12% 2.08% 2.13% 2.16%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 2.01% 2.01% 2.01% 2.01% 2.02%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 2.58% 1.94% 2.51% 2.32% 2.00%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $6 $6 $4 $3 $3
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77% 68%
- ------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
44 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.11 $6.14 $6.87 $6.59 $6.61
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .26 .20 .25 .23 .21
Net gains (losses) (both realized and
unrealized) .31 1.15 (.73) .34 .14
- ------------------------------------------------------------------------------------------------------
Total from investment operations .57 1.35 (.48) .57 .35
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.20) (.38) (.25) (.29) (.37)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.48 $7.11 $6.14 $6.87 $6.59
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.16% 22.83% (7.30%) 8.91% 5.52%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement .86% .86% .85% .87% .88%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) .82% .82% .82% .87% .88%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.70% 3.16% 3.68% 3.47% 3.18%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $196 $170 $206 $157 $145
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77% 68%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CLASS R* YEAR ENDED
PER SHARE DATA OCT. 31, 2010(c)
Net asset value, beginning of period $6.98
- -------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .16
Net gains (losses) (both realized and
unrealized) .40
- -------------------------------------------------------------------
Total from investment operations .56
- -------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.08)
- -------------------------------------------------------------------
Net asset value, end of period $7.46
- -------------------------------------------------------------------
TOTAL RETURN 8.15%
- -------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.66%(d)
- -------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.59%(d)
- -------------------------------------------------------------------
Net investment income (loss) 3.58%(d)
- -------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------------
Portfolio turnover rate 62%
- -------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 45
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 ---------------------------------------------------
PER SHARE DATA 2010 2009 2008 2007 2006
Net asset value, beginning of period $7.11 $6.16 $6.89 $6.60 $6.61
- ------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24 .18 .25 .22 .20
Net gains (losses) (both realized and
unrealized) .31 1.15 (.72) .35 .13
- ------------------------------------------------------------------------------------------------------
Total from investment operations .55 1.33 (.47) .57 .33
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.18) (.38) (.26) (.28) (.34)
- ------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.48 $7.11 $6.16 $6.89 $6.60
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN 7.85% 22.42% (7.19%) 8.84% 5.29%
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.18% 1.16% 1.14% 1.17% 1.20%
- ------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.12% 1.06% .87% 1.08% 1.08%
- ------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.35% 2.86% 3.64% 3.27% 2.95%
- ------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
- ------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77% 68%
- ------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS W ------------------------------------------
PER SHARE DATA 2010 2009 2008 2007(e)
Net asset value, beginning of period $7.09 $6.15 $6.88 $6.79
- ---------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .22 .17 .22 .20
Net gains (losses) (both realized and
unrealized) .31 1.14 (.73) .17
- ---------------------------------------------------------------------------------------------
Total from investment operations .53 1.31 (.51) .37
- ---------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.16) (.37) (.22) (.28)
- ---------------------------------------------------------------------------------------------
Net asset value, end of period $7.46 $7.09 $6.15 $6.88
- ---------------------------------------------------------------------------------------------
TOTAL RETURN 7.66% 22.04% (7.62%) 5.71%
- ---------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.31% 1.30% 1.30% 1.35%(d)
- ---------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) 1.27% 1.27% 1.27% 1.26%(d)
- ---------------------------------------------------------------------------------------------
Net investment income (loss) 3.15% 2.70% 3.27% 3.34%(d)
- ---------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $70 $60 $135 $54
- ---------------------------------------------------------------------------------------------
Portfolio turnover rate 62% 69% 75% 77%
- ---------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
46 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
CLASS Z YEAR ENDED
PER SHARE DATA OCT. 31, 2010(f)
Net asset value, beginning of period $7.33
- -------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01
Net gains (losses) (both realized and
unrealized) .14
- -------------------------------------------------------------------
Total from investment operations .15
- -------------------------------------------------------------------
Net asset value, end of period $7.48
- -------------------------------------------------------------------
TOTAL RETURN 2.05%
- -------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense
waiver/reimbursement 1.13%(d)
- -------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(b) .95%(d)
- -------------------------------------------------------------------
Net investment income (loss) 2.31%(d)
- -------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------------
Portfolio turnover rate 62%
- -------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
* Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(a) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(b) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds).
(c) For the period from March 15, 2010 (when shares became available) to Oct.
31, 2010.
(d) Annualized.
(e) For the period from Dec. 1, 2006 (when shares became available) to Oct. 31,
2007.
(f) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Columbia Global Bond Fund (formerly known as RiverSource Global Bond Fund) (the
Fund) is a series of RiverSource Global Series, Inc. (the Corporation) and is
registered under the Investment Company Act of 1940, as amended (the 1940 Act),
as a non-diversified, open-end management investment company. The Corporation
has 10 billion authorized shares of capital stock that can be allocated among
the separate series as designated by the Corporation's Board of Directors (the
Board).
The Fund offers Class A, Class B, Class C, Class I, Class R, Class R4, Class W
and Class Z shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class R shares are offered without a front-end sales charge or CDSC to
qualifying institutional investors. Effective Sept. 7, 2010, Class R2 shares
were renamed Class R shares.
- - Class R4 shares are not subject to sales charges, however, this class is
closed to new investors effective Dec. 31, 2010.
- - Class W shares are offered without a front-end sales charge or CDSC and are
offered through qualifying discretionary accounts.
- --------------------------------------------------------------------------------
48 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
- - Class Z shares are offered without a front-end sales charge or CDSC to
certain eligible investors. Class Z shares became effective Sept. 27, 2010.
At Aug. 27, 2010, all Class R3 and Class R5 shares were liquidated. The shares
in these classes had consisted solely of seed capital from Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager).
At Oct. 31, 2010, the Investment Manager and affiliated funds-of-funds owned
100% of Class I shares, and the Investment Manager owned 100% of Class R shares.
At Oct. 31, 2010, the Investment Manager and affiliated funds-of-funds owned
approximately 36% of the total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
(such as foreign securities) that is not reflected in price quotations or
valuations from other sources. A fair value price is a good faith estimate of
the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE. The fair value of a security is
likely to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Oct. 31, 2010, foreign currency holdings consisted of
multiple denominations, primarily European monetary units and Japanese Yen.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
- --------------------------------------------------------------------------------
50 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
SECURITIES PURCHASED ON A FORWARD-COMMITMENT BASIS
Delivery and payment for securities that have been purchased by the Fund on a
forward-commitment basis, including when-issued securities and other forward-
commitments, can take place one month or more after the transaction date. During
this period, such securities are subject to market fluctuations, and they may
affect the Fund's net assets the same as owned securities. The Fund designates
cash or liquid securities at least equal to the amount of its forward-
commitments. At Oct. 31, 2010, the Fund has outstanding when-issued securities
of $1,673,555 and other forward-commitments of $34,650.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared and paid each calendar quarter,
when available, are reinvested in additional shares of the Fund at net asset
value
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
or payable in cash. Capital gains, when available, are normally distributed
along with the last income dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income, if any, is recognized on the ex-dividend date or upon
receipt of ex-dividend notification in the case of certain foreign securities.
Interest income, including amortization of premium, market discount and original
issue discount using the effective interest method, is accrued daily.
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk and credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts in
connection with the settlement of purchases and sales of securities, to hedge
the
- --------------------------------------------------------------------------------
52 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
currency exposure associated with some or all of the Fund's securities, to shift
foreign currency exposure back to U.S. dollars, to shift investment exposure
from one currency to another, to shift U.S. dollar exposure to achieve a
representative weighted mix of major currencies in its benchmark, and/or to
recover an underweight country exposure in its portfolio and to gain exposure to
currencies where either the underlying bond market is unattractive or where
foreign investors cannot easily invest in local fixed income securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
FUTURES CONTRACTS
Futures contracts represent commitments for the future purchase or sale of an
asset at a specified price on a specified date. The Fund bought and sold futures
contracts traded on U.S. and foreign exchanges to produce incremental earnings,
to manage the duration and yield curve exposure of the Fund vs. the benchmark
(interest rate futures), to manage exposure to movements in interest rates
(interest rate futures), to manage the duration and yield curve exposure of the
Fund vs. the benchmark (U.S. Treasury Note futures) and to implement cross
market strategies efficiently (i.e., a sale of U.S. 10 yr futures versus a
purchase of German 10 yr futures to position for expected changes in the spread
between U.S. and German yields). Upon entering into futures contracts, the Fund
bears risks which may include interest rates, exchange rates or securities
prices moving unexpectedly, in which case, the Fund may not achieve the
anticipated benefits of the futures contracts and may realize a loss. Additional
risks include counterparty credit risk, the possibility of an illiquid market,
and that a change in the value of the contract or option may not correlate with
changes in the value of the underlying asset.
Upon entering into a futures contract, the Fund pledges cash or securities with
the broker in an amount sufficient to meet the initial margin requirement.
Subsequent payments (variation margin) are made or received by the Fund each
day. The variation margin payments are equal to the daily change in the contract
value and are recorded as variation margin receivable or payable and are offset
in unrealized gains or losses. The Fund recognizes a realized gain or loss when
the
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
contract is closed or expires. Futures contracts involve, to varying degrees,
risk of loss in excess of the variation margin disclosed in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Unrealized Unrealized
appreciation on depreciation on
forward foreign forward foreign
Foreign exchange currency exchange currency exchange
contracts contracts $918,518 contracts $198,129
- -------------------------------------------------------------------------------------------
Net assets --
unrealized
Interest rate depreciation on
contracts N/A N/A investments 147,337*
- -------------------------------------------------------------------------------------------
Total $918,518 $345,466
- -------------------------------------------------------------------------------------------
</Table>
* Includes cumulative appreciation (depreciation) of futures contracts as
reported in the Futures Contracts Outstanding table following the Portfolio
of Investments. Only the current day's variation margin is reported in
receivables or payables in the Statement of Assets and Liabilities.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE YEAR
ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- -----------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY FUTURES
RISK EXPOSURE CATEGORY EXCHANGE CONTRACTS CONTRACTS TOTAL
- -----------------------------------------------------------------------------------
Foreign exchange contracts $2,539,065 $ -- $2,539,065
- -----------------------------------------------------------------------------------
Interest rate contracts -- (436,414) $ (436,414)
- -----------------------------------------------------------------------------------
Total $2,539,065 $(436,414) $2,102,651
- -----------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED IN
INCOME
- ----------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY FUTURES
RISK EXPOSURE CATEGORY EXCHANGE CONTRACTS CONTRACTS TOTAL
- ----------------------------------------------------------------------------------
Foreign exchange contracts $445,405 $ -- $445,405
- ----------------------------------------------------------------------------------
Interest rate contracts -- (98,865) $(98,865)
- ----------------------------------------------------------------------------------
Total $445,405 $(98,865) $346,540
- ----------------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The gross notional amount of contracts outstanding was approximately $60.4
million at Oct. 31, 2010. The monthly average gross notional amount for these
contracts was $46.2 million for the year ended Oct. 31, 2010. The fair value of
such contracts at Oct. 31, 2010 is set forth in the table above.
FUTURES CONTRACTS
The gross notional amount of long and short contracts outstanding was
approximately $11.9 million and $37.5 million, respectively, at Oct. 31, 2010.
The monthly average gross notional amounts for long and short contracts was
$15.1 million and $15.4 million, respectively, for the year ended Oct. 31, 2010.
The fair value of such contracts at Oct. 31, 2010 is set forth in the table
above.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 0.72% to 0.52% as the Fund's net assets increase. The
management fee for the year ended Oct. 31, 2010 was 0.71% of the Fund's average
daily net assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 55
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $1,017.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable to Class R, Class R4 and Class W shares, which amount varied by
class. In addition, the Transfer Agent charged an annual fee per inactive
account and received reimbursement from the Fund for certain out-of-pocket
expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's shares maintained in each such omnibus account (other than omnibus
accounts for which American Enterprise Investment Services, Inc. is the broker
of record or accounts where the beneficial shareholder is a customer of
Ameriprise Financial Services, Inc., which are paid a per account fee). The
Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is
not entitled to reimbursement for such fees from the Fund.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to
- --------------------------------------------------------------------------------
56 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.23%
Class B.............................................. 0.25
Class C.............................................. 0.24
Class R.............................................. 0.08
Class R4............................................. 0.06
Class W.............................................. 0.20
Class Z.............................................. 0.13*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services. Prior to Sept. 7, 2010,
the Fund also paid an annual fee at a rate of 0.25% of the Fund's average daily
net assets attributable to Class R shares for such services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class W shares, a fee at an annual rate of up to 0.50% of the Fund's average
daily net assets attributable to Class R shares (of which up to 0.25% may be
used for services) and a fee at an annual rate of up to 1.00% of the Fund's
average daily net assets attributable to Class B and Class C shares. For Class B
and Class C shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution
expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $1,130,000 and $83,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of July 31, 2010, and may be recovered from
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 57
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $214,527 for Class A, $6,190 for Class B and
$2,282 for Class C for the year ended Oct. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Oct. 31, 2010, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*) were as follows:
<Table>
Class A.............................................. 1.25%
Class B.............................................. 2.02
Class C.............................................. 2.01
Class I.............................................. 0.82
Class R.............................................. 1.59
Class R4............................................. 1.12
Class W.............................................. 1.27
Class Z.............................................. 0.95
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A........................................... $123,060
Class B........................................... 12,851
Class C........................................... 3,061
Class R4.......................................... 21
</Table>
The management fees waived/reimbursed at the Fund level were $208,141.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and reimburse certain expenses until Dec. 31, 2010, unless sooner
terminated at the sole discretion of the Board, such that net expenses
(excluding fees and expenses of acquired funds*) will not exceed the following
percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.25%
Class B.............................................. 2.02
Class C.............................................. 2.01
Class I.............................................. 0.82
Class R.............................................. 1.62
Class R4............................................. 1.12
Class W.............................................. 1.27
Class Z.............................................. 1.00
</Table>
Effective Jan. 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
Dec. 31, 2011, unless sooner terminated at the sole discretion of the Board,
such
- --------------------------------------------------------------------------------
58 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
that net expenses (excluding fees and expenses of acquired funds*), will not
exceed the following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.21%
Class B.............................................. 1.96
Class C.............................................. 1.96
Class I.............................................. 0.76
Class R.............................................. 1.46
Class R4............................................. 1.06
Class W.............................................. 1.21
Class Z.............................................. 0.96
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $296,998,710 and $310,324,179, respectively, for the
year ended Oct. 31, 2010. Realized gains and losses are determined on an
identified cost basis.
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
CLASS A
Sold 5,227,742 5,231,964
Converted from Class B(a) 1,004,833 969,818
Reinvested distributions 745,196 2,146,170
Redeemed (9,534,806) (13,137,526)
- ------------------------------------------------------------------
Net increase (decrease) (2,557,035) (4,789,574)
- ------------------------------------------------------------------
CLASS B
Sold 533,314 725,964
Reinvested distributions 49,123 349,934
Converted to Class A(a) (999,242) (962,748)
Redeemed (1,320,786) (2,725,361)
- ------------------------------------------------------------------
Net increase (decrease) (1,737,591) (2,612,211)
- ------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 59
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
CLASS C
Sold 394,093 281,159
Reinvested distributions 13,210 35,905
Redeemed (364,923) (227,718)
- ------------------------------------------------------------------
Net increase (decrease) 42,380 89,346
- ------------------------------------------------------------------
CLASS I
Sold 6,515,742 6,812,712
Reinvested distributions 675,045 1,933,079
Redeemed (4,919,521) (18,357,075)
- ------------------------------------------------------------------
Net increase (decrease) 2,271,266 (9,611,284)
- ------------------------------------------------------------------
CLASS R(B,C)
Sold 716 N/A
- ------------------------------------------------------------------
Net increase (decrease) 716 N/A
- ------------------------------------------------------------------
CLASS R3(b)
Sold 716 N/A
Redeemed (716) N/A
- ------------------------------------------------------------------
Net increase (decrease) -- N/A
- ------------------------------------------------------------------
CLASS R4
Sold 36,368 6,358
Reinvested distributions 974 1,165
Redeemed (6,616) (3,012)
- ------------------------------------------------------------------
Net increase (decrease) 30,726 4,511
- ------------------------------------------------------------------
CLASS R5(b)
Sold 715 N/A
Redeemed (715) N/A
- ------------------------------------------------------------------
Net increase (decrease) -- N/A
- ------------------------------------------------------------------
CLASS W
Sold 5,960,012 7,283,695
Reinvested distributions 187,672 826,368
Redeemed (5,289,790) (21,598,586)
- ------------------------------------------------------------------
Net increase (decrease) 857,894 (13,488,523)
- ------------------------------------------------------------------
CLASS Z(d)
Sold 1,006 N/A
- ------------------------------------------------------------------
Net increase (decrease) 1,006 N/A
- ------------------------------------------------------------------
</Table>
(a) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
(b) For the period from March 15, 2010 (when shares became available) to Oct.
31, 2010.
(c) Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(d) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
- --------------------------------------------------------------------------------
60 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Oct. 31, 2010,
securities valued at $8,771,604 were on loan, secured by U.S. government
securities valued at $5,887,409 and by cash collateral of $3,005,038 invested in
short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$15,219 earned from securities lending for the year ended Oct. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 61
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $129,611,914 and $130,927,530, respectively, for the year
ended Oct. 31, 2010. The income distributions received with respect to the
Fund's investment in Columbia Short-Term Cash Fund can be found in the Statement
of Operations and the Fund's invested balance in Columbia Short-Term Cash Fund
at Oct. 31, 2010, can be found in the Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
10. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of futures contracts,
foreign currency transactions, foreign tax credits and losses deferred due to
wash sales. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions,
- --------------------------------------------------------------------------------
62 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
the fiscal year in which amounts are distributed may differ from the year that
the income or realized gains were recorded by the Fund.
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by
$2,643,527 and accumulated net realized loss has been increased by $969,791
resulting in a net reclassification adjustment to decrease paid-in capital by
$1,673,736.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ------------------------------------------------------------------
Ordinary income........................... 12,382,871 34,499,468
Long-term capital gain.................... -- --
</Table>
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income................... $ 9,830,118
Undistributed accumulated long-term gain........ $ --
Accumulated realized loss....................... $(11,380,428)
Unrealized appreciation (depreciation).......... $ 42,043,088
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$11,380,428 at Oct. 31, 2010, that if not offset by capital gains will expire as
follows:
<Table>
<Caption>
2014 2016 2017
$498,771 $2,328,738 $8,552,919
</Table>
For the year ended Oct. 31, 2010, $1,991,313 of capital loss carry-over was
utilized and $1,673,736 expired unused. It is unlikely the Board will authorize
a distribution of any net realized capital gains until the available capital
loss carry-over has been offset or expires. There is no assurance that the Fund
will be able to utilize all of its capital loss carry-over before it expires.
11. RISKS RELATING TO CERTAIN INVESTMENTS
NON-DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. Because each
investment has a greater effect on the Fund's performance, the Fund may be more
exposed to the risks of loss and volatility than a fund that invests more
broadly.
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions,
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 63
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
which may result in greater market volatility. In addition, certain foreign
securities may not be as liquid as U.S. securities. Investing in emerging
markets may accentuate these risks.
12. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
13. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in Jones v. Harris Associates. On December 9,
- --------------------------------------------------------------------------------
64 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
2010, the District Court reinstated its July 9, 2007 summary judgment order in
favor of the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 65
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
adverse effect on the consolidated financial condition or results of operations
of Ameriprise Financial.
- --------------------------------------------------------------------------------
66 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA GLOBAL BOND FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Global Bond Fund (formerly known as
RiverSource Global Bond Fund) (the Fund) (one of the portfolios constituting the
RiverSource Global Series, Inc.) as of October 31, 2010, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the four years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights of the Fund for the period ended October 31, 2006, were audited by
other auditors whose report dated December 20, 2006, expressed an unqualified
opinion on those financial highlights.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 67
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) ------------
In our opinion, the financial statements and financial highlights audited by us
as referred to above present fairly, in all material respects, the financial
position of Columbia Global Bond Fund of the RiverSource Global Series, Inc. at
October 31, 2010, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the four years in the period then
ended, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
68 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 0.00%
Dividends Received Deduction for corporations................ 0.00%
U.S. Government Obligations.................................. 3.66%
Foreign Taxes Paid........................................... $74,010
$3,162,4-
Foreign Source Income........................................ 09
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 69
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
70 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 71
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
72 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 73
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
74 COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL BOND FUND -- 2010 ANNUAL REPORT 75
COLUMBIA GLOBAL BOND FUND
(formerly known as RiverSource Global Bond Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6309 AG (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
COLUMBIA
GLOBAL EXTENDED ALPHA FUND
(FORMERLY KNOWN AS THREADNEEDLE GLOBAL EXTENDED ALPHA FUND)
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
COLUMBIA GLOBAL EXTENDED ALPHA FUND SEEKS TO PROVIDE SHAREHOLDERS WITH LONG-TERM
CAPITAL GROWTH.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 6
The Fund's Long-term Performance... 12
Fund Expenses Example.............. 14
Portfolio of Investments........... 17
Statement of Assets and
Liabilities...................... 26
Statement of Operations............ 27
Statements of Changes in Net
Assets........................... 29
Financial Highlights............... 30
Notes to Financial Statements...... 37
Report of Independent Registered
Public Accounting Firm........... 56
Federal Income Tax Information..... 58
Board Members and Officers......... 59
Proxy Voting....................... 64
</Table>
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Columbia Global Extended Alpha Fund (the Fund) Class A shares gained 21.21%
(excluding sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) All Country World Index, which advanced 14.65% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 8/1/08
- ----------------------------------------------------------------
Columbia Global Extended Alpha Fund
Class A (excluding sales charge) +21.21% +3.04%
- ----------------------------------------------------------------
MSCI All Country World Index (unmanaged) +14.65% -0.75%
- ----------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The index does not reflect the effects of sales charges, expenses and taxes. It
is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR INCEPTION
Class A (inception 8/1/08) +21.21% +3.04%
- ---------------------------------------------------------------
Class B (inception 8/1/08) +20.32% +2.23%
- ---------------------------------------------------------------
Class C (inception 8/1/08) +20.27% +2.24%
- ---------------------------------------------------------------
Class I (inception 8/1/08) +21.58% +3.36%
- ---------------------------------------------------------------
Class R* (inception 8/1/08) +20.69% +2.61%
- ---------------------------------------------------------------
Class R4 (inception 8/1/08) +21.26% +3.11%
- ---------------------------------------------------------------
Class Z (inception 9/27/10) N/A +5.12%**
- ---------------------------------------------------------------
With sales charge
Class A (inception 8/1/08) +14.24% +0.36%
- ---------------------------------------------------------------
Class B (inception 8/1/08) +15.32% +0.93%
- ---------------------------------------------------------------
Class C (inception 8/1/08) +19.27% +2.24%
- ---------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R, Class R4 and Class Z shares. Class I,
Class R and Class R4 are available to qualifying institutional investors only.
Class Z shares are offered to certain eligible investors.
*Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
**Not annualized.
- --------------------------------------------------------------------------------
4 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
MORNINGSTAR STYLE BOX(TM)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity Style
Value Blend Growth
X Large
Medium Size
Small
</Table>
The Morningstar Style Box(TM) is based on the fund's portfolio holdings as of
period end. The vertical axis shows the market capitalization of the stocks
owned, and the horizontal axis shows investment style (value, blend, or growth).
Information shown is based on the most recent data provided by Morningstar.
(C)2010 Morningstar, Inc. All rights reserved. The information contained herein
is proprietary to Morningstar and/or its content providers, may not be copied or
distributed and is not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no guarantee of
future results.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
Effective Sept. 27, 2010, Threadneedle Global Extended Alpha Fund was renamed
Columbia Global Extended Alpha Fund.
Dear Shareholders,
Columbia Global Extended Alpha Fund (the Fund) Class A shares gained 21.21%
(excluding sales charge) for the 12 months ended Oct. 31, 2010. The Fund
outperformed its benchmark, the Morgan Stanley Capital International (MSCI) All
Country World Index (MSCI Index), which advanced 14.65% for the 12-month period.
SIGNIFICANT PERFORMANCE FACTORS
The MSCI Index delivered a double-digit return as the world moved further from
the epicenter of the financial crisis, having escaped the worst case scenario
many investors feared. Productivity gains and global economic growth have
translated to revenue and profit growth for many companies. Balance sheets
appear generally healthy and cash flow has been strong, while companies still
trade at valuations we find attractive.
PORTFOLIO BREAKDOWN BY COUNTRY(1) (at Oct. 31, 2010; % of portfolio and
portfolio swap(2))
- --------------------------------------------------------------------------------
<Table>
<Caption>
LONG SHORT(3) NET
Australia 0.9% 0.0% 0.9%
- ------------------------------------------------------------------
Brazil 3.6% 0.0% 3.6%
- ------------------------------------------------------------------
Canada 6.4% -0.9% 5.5%
- ------------------------------------------------------------------
China 3.3% 0.0% 3.3%
- ------------------------------------------------------------------
Denmark 1.0% 0.0% 1.0%
- ------------------------------------------------------------------
France 2.3% -1.0% 1.3%
- ------------------------------------------------------------------
Germany 4.6% 0.0% 4.6%
- ------------------------------------------------------------------
Hong Kong 2.6% 0.0% 2.6%
- ------------------------------------------------------------------
India 2.9% 0.0% 2.9%
- ------------------------------------------------------------------
Indonesia 3.0% 0.0% 3.0%
- ------------------------------------------------------------------
Ireland 1.6% 0.0% 1.6%
- ------------------------------------------------------------------
Italy 1.7% 0.0% 1.7%
- ------------------------------------------------------------------
Japan 4.3% -2.0% 2.3%
- ------------------------------------------------------------------
Mexico 1.4% 0.0% 1.4%
- ------------------------------------------------------------------
Netherlands 3.2% 0.0% 3.2%
- ------------------------------------------------------------------
Panama 1.7% 0.0% 1.7%
- ------------------------------------------------------------------
Portugal 1.2% 0.0% 1.2%
- ------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
6 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
PORTFOLIO BREAKDOWN BY COUNTRY(1) (at Oct. 31, 2010; % of portfolio and
portfolio swap(2)) (continued)
- --------------------------------------------------------------------------------
<Table>
<Caption>
LONG SHORT(3) NET
South Africa 1.9% 0.0% 1.9%
- -------------------------------------------------------------------
South Korea 2.4% 0.0% 2.4%
- -------------------------------------------------------------------
Spain 0.0% -0.8% -0.8%
- -------------------------------------------------------------------
Switzerland 7.0% -2.4% 4.6%
- -------------------------------------------------------------------
Turkey 2.0% 0.0% 2.0%
- -------------------------------------------------------------------
United Kingdom 9.5% -1.2% 8.4%
- -------------------------------------------------------------------
United States 55.0% -18.8% 36.2%
- -------------------------------------------------------------------
Other(4) 3.6% -0.1% 3.5%
- -------------------------------------------------------------------
127.2% -27.2% 100.0%
- -------------------------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) The Fund has entered into a portfolio swap agreement. A portfolio swap
allows the Fund to obtain exposure to a custom basket of securities and
foreign markets (both long and short exposures) without owning or taking
physical custody of such securities. The portfolio breakdown by country for
each underlying position in the custom basket has been estimated by
multiplying the notional amount of each security by its Oct. 31, 2010
closing market price as obtained from an authorized pricing source. The
notional amounts and the market values of the positions in the custom basket
are not presented in the financial statements.
(3) At Oct. 31, 2010, the Fund had no short positions. However, the Fund had
entered into a portfolio swap in order to gain short exposure to foreign
equity markets. See Portfolio Swap Outstanding at Oct. 31, 2010 following
the Portfolio of Investments, and Note 3 to the financial statements.
(4) Cash & Cash Equivalents.
Top ten holdings do not include notional exposure to holdings the Fund has
through its use of a portfolio swap. For more information regarding the Fund's
portfolio swap, see "Portfolio of Investments" pages 20-21.
During the year, we saw continued divergence between developed and emerging
economies. While growth slowed in the developed world, emerging markets grew at
a rapid pace, supporting their stock markets, particularly in India and
Indonesia. China's stock market, which suffered from high valuations and
inflation concerns, was an exception.
The Fund significantly outperformed the MSCI Index over the period. Stock
selection in most geographic areas and industry sectors added to relative
performance, with selection in the financial and industrial sectors of the
emerging markets and Europe having the most notable positive effect. The
portfolio's long segment outperformed its short segment,
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
which is what we would expect given the strong market gains during the period
and our strategy of taking short positions and reinvesting the proceeds into the
long positions we think will perform best.
Notable individual performers included U.K. luxury retailer BURBERRY, U.S.
luxury goods company TIFFANY and Swiss luxury watch brand SWATCH. These
companies are benefiting from growing demand for their products in emerging
markets. Industrial stocks AGGREKO and THE WEIR GROUP, which are U.K.-listed,
also benefited from emerging market growth. Companies such as these, while based
in developed countries, get most of their earnings from overseas rather than
their own local markets.
The Fund also benefited from exposure to emerging market financial stocks
including BANK RAKYAT in Indonesia, GARANTI BANKASI in Turkey and STATE BANK OF
INDIA. Also within the emerging markets, the Fund's holdings of FOCUS MEDIA, a
Chinese outdoor advertising company, performed well. We sold FOCUS MEDIA as its
valuation became less attractive to us.
Within the developed markets, the Fund benefited from its holdings of high
quality businesses with sustainable growth including U.S. technology
TOP TEN HOLDINGS(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
AsiaInfo-Linkage, Inc. (China) 3.5%
- ------------------------------------------------
Nestle SA (Switzerland) 2.9%
- ------------------------------------------------
The Coca-Cola Co. (United States) 2.9%
- ------------------------------------------------
McDonald's Corp. (United States) 2.9%
- ------------------------------------------------
Banco Santander Brasil SA, ADR (Brazil) 2.8%
- ------------------------------------------------
NHN Corp. (South Korea) 2.6%
- ------------------------------------------------
Thermo Fisher Scientific, Inc. (United
States) 2.6%
- ------------------------------------------------
Linde AG (Germany) 2.5%
- ------------------------------------------------
Tyco Electronics Ltd. (Switzerland) 2.5%
- ------------------------------------------------
MTU Aero Engines Holding AG (Germany) 2.3%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
8 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
companies APPLE and ORACLE CORP., U.S. dental equipment company SIRONA DENTAL,
U.S. cell phone tower operator AMERICAN TOWER and LINDE, a German industrial
gases company.
The Fund benefited from short positions in a Swiss dental implants company, a
Spanish industrial company and a Japanese investment bank.
Individual detractors included HEWLETT-PACKARD, which had a management change
over the period, WALGREENS, a drug store chain that reported disappointing
earnings results, and COLGATE-PALMOLIVE, which suffered from an increasingly
competitive environment and commodity price pressures. We believe Hewlett-
Packard still has appreciation potential given its broad exposure to a recovery
in technology spending and we think the pressures affecting Colgate-Palmolive
will diminish over the next several years. We believe Colgate-Palmolive has good
prospects due to its strong brands and entrenched presence in the emerging
markets. Walgreens, on the other hand, was a turnaround story that didn't evolve
as well as we had expected. We sold the stock during the fiscal year. The
consumer discretionary sector was the only sector that detracted for the year,
mainly due to holdings of Colgate-Palmolive and Walgreens.
CHANGES TO THE FUND'S PORTFOLIO
We have begun to find attractive opportunities in sustainable growth businesses
we believe are trading at reasonable valuations, so we have added to select blue
chip companies including COCA COLA and MCDONALDS. We also added to the Fund's
emerging markets position, but were careful to focus on what we view as
attractively
Overall, we currently remain positive about global economic growth and we see
good opportunities for profit growth across a number of different companies.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
valued stocks such as BANCO SANTANDER BRASIL, ASIAINFO-LINKAGE, which is a
China-domiciled telecommunications software company, and HYUNDAI HOME SHOPPING,
a Korean television home shopping company trading at a very attractive
valuation.
Within the Fund's cyclical exposure we have been emphasizing quality and looking
for cyclical companies with definitive performance drivers, such as continued
cost cutting or restructuring that can boost profit growth. Examples include
U.S. industrial conglomerate ROPER INDUSTRIES, U.S. aviation fuel service
company WORLD FUEL SERVICES, U.S. based TYCO ELECTRONICS and MAKITA CORP. a
Japanese tools company.
In terms of overall sector allocations, we added to the industrials position
where we find good high quality, cyclical growth companies, and also increased
exposure to energy, which looks attractive to us because energy prices have
lagged other commodities. We reduced the Fund's weightings in the health care
and financials sectors, two areas where we think companies have less pricing
power.
Regionally, we increased the emerging market exposure and reduced the U.S.
weighting. During the period, we increased the portfolio's gross equity exposure
by adding new short positions and also taking a short position in an index ETF.
We then reinvested the proceeds into the long positions. In our view, the Fund's
long positions, in general, fit under the banner of good companies selling at
fair prices or fair companies at low prices. Conversely, we have taken short
positions in what we believe are weak companies selling at fair prices or fair
companies selling at high prices. Short positions established during the period
include a U.S. trucking company that is selling at a high price and losing
market share, an expensive Canadian information technology company with a poor
history of capital allocation, and an expensive Japanese utility that is
experiencing pressure on returns and also not allocating capital effectively.
OUR FUTURE STRATEGY
In general, we anticipate positive global economic growth. However, we still
expect a prolonged low growth trend in developed countries, which are weighed
down by both government and private debt. Despite loose fiscal and monetary
policy, we do not think developed countries will be
- --------------------------------------------------------------------------------
10 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
able to deliver strong sustainable economic growth as they come to grips with
imbalances in their economies. We are mindful of potential missteps in monetary
and fiscal policy as developed countries, particularly the U.S. and parts of
Western Europe, address their deficits.
Amid continued rapid growth in emerging markets, we are now starting to see
inflationary pressures in select countries, which may lead to tighter monetary
policies. However, we believe these inflationary concerns are cyclical rather
than secular.
Overall, we currently remain positive about global economic growth and we see
good opportunities for profit growth across a number of different companies. We
will continue to seek to identify a host of well-managed companies with growth
businesses, good balance sheets and very attractive valuations. Also, we believe
that in a world where inflation risks seem to be rising, equities, as an asset
class, appear increasingly attractive.
<Table>
Andrew Holliman, CFA(R) Jeremy Podger
Portfolio Manager Deputy Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 11
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Columbia Global Extended Alpha Fund Class A shares (from 8/1/08 to
10/31/10) as compared to the performance of the Morgan Stanley Capital
International (MSCI) All Country World Index. In comparing the Fund's Class A
shares to this index, you should take into account the fact that the Fund's
performance reflects the maximum initial sales charge of 5.75%, while such
charges are not reflected in the performance of the index. Returns for the Fund
include the reinvestment of any distributions paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
SINCE
INCEPTION
1 YEAR 8/1/08
COLUMBIA GLOBAL EXTENDED ALPHA FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $11,424 $10,082
- -----------------------------------------------------------------------
Average annual total return +14.24% +0.36%
- -----------------------------------------------------------------------
MSCI ALL COUNTRY WORLD INDEX(1)
Cumulative value of $10,000 $11,465 $9,833
- -----------------------------------------------------------------------
Average annual total return +14.65% -0.75%
- -----------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN COLUMBIA GLOBAL EXTENDED ALPHA
FUND LINE GRAPH)
<Table>
<Caption>
COLUMBIA GLOBAL
EXTENDED ALPHA
FUND CLASS MSCI ALL
A (INCLUDES COUNTRY WORLD
SALES CHARGE) INDEX(1)
--------------- -------------
8/1/08 $ 9,425 $10,000
10/08 6,583 6,949
1/09 6,070 6,162
4/09 6,508 6,740
7/09 7,724 8,034
10/09 8,318 8,576
1/10 8,574 8,728
4/10 9,478 9,437
7/10 8,936 8,967
10/10 10,082 9,833
</Table>
(1) The Morgan Stanley Capital International (MSCI) All Country World Index, an
unmanaged index of equity securities, is designed to measure equity market
performance in the global developed and emerging markets. The index reflects
reinvestment of all distributions and changes in market prices. The Fund's
performance is currently measured against this index for purposes of
determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,063.70 $ 8.64(d) 1.68%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.55 $ 8.45(d) 1.68%(d)
- -------------------------------------------------------------------------------------------
Class B
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,059.60 $12.38(d) 2.41%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,012.91 $12.09(d) 2.41%(d)
- -------------------------------------------------------------------------------------------
Class C
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,059.60 $12.53(d) 2.44%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,012.76 $12.24(d) 2.44%(d)
- -------------------------------------------------------------------------------------------
Class I
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,065.60 $ 6.90(d) 1.34%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.25 $ 6.74(d) 1.34%(d)
- -------------------------------------------------------------------------------------------
Class R
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,061.40 $10.74(d) 2.09%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.51 $10.50(d) 2.09%(d)
- -------------------------------------------------------------------------------------------
Class R4
- -------------------------------------------------------------------------------------------
Actual(c) $1,000 $1,063.70 $ 8.44(d) 1.64%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.75 $ 8.25(d) 1.64%(d)
- -------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 15
FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010(a) OCT. 31, 2010 THE PERIOD(b) EXPENSE RATIO
- -------------------------------------------------------------------------------------------
Class Z
- -------------------------------------------------------------------------------------------
Actual(e) $1,000 $1,051.20 $ 1.37(d) 1.52%(d)
- -------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.35 $ 7.64(d) 1.52%(d)
- -------------------------------------------------------------------------------------------
</Table>
(a) The beginning account value for Class Z is as of Sept. 27, 2010 (when shares
became available) for actual expense calculations.
(b) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period). Actual expenses
for Class Z are equal to the annualized expense ratio for the class as
indicated above, multiplied by the average account value over the period,
multiplied by 32/365 (to reflect the number of days in the period).
(c) Based on the actual return for the six months ended Oct. 31, 2010: +6.37%
for Class A, +5.96% for Class B, +5.96% for Class C, +6.56% for Class I,
+6.14% for Class R and +6.37% for Class R4.
(d) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until Dec. 31, 2011, unless sooner terminated at the sole discretion of the
Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 1.55% for Class A, 2.30% for Class B, 2.30% for
Class C, 1.18% for Class I, 1.80% for Class R, 1.48% for Class R4 and 1.30%
for Class Z. Any amounts waived will not be reimbursed by the Fund. This
change is effective Jan. 1, 2011. Had this change been in place for the
entire six month period ended Oct. 31, 2010, the actual expenses paid would
have been $6.75 for Class I, $9.92 for Class R and $8.28 for Class R4; the
hypothetical expenses paid would have been $6.59 for Class I, $9.70 for
Class R and $8.10 for Class R4. The actual and hypothetical expenses paid
for Class A, Class B, Class C and Class Z would have been the same as those
expenses presented in the table above.
(e) Based on the actual return for the period from Sept. 27, 2010 (when shares
became available) to Oct. 31, 2010 of +5.12% for Class Z.
- --------------------------------------------------------------------------------
16 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
PORTFOLIO OF INVESTMENTS ------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (94.9%)(c)
ISSUER SHARES VALUE(a)
AUSTRALIA (0.9%)
InterOil Corp. 1,320(b) $93,959
- -------------------------------------------------------------------------------------
BRAZIL (3.6%)
Banco Santander Brasil SA, ADR 18,700 269,280
MRV Engenharia e Participacoes SA 10,000 97,422
---------------
Total 366,702
- -------------------------------------------------------------------------------------
CANADA (6.4%)
Barrick Gold Corp. 1,800 86,691
CGI Group, Inc., Class A 6,000(b) 92,303
Fairfax Financial Holdings Ltd. 400 163,621
IESI-BFC Ltd. 6,500 151,970
MacDonald, Dettwiler & Associates Ltd. 3,100(b) 154,438
---------------
Total 649,023
- -------------------------------------------------------------------------------------
CHINA (3.3%)
AsiaInfo-Linkage, Inc. 15,095(b) 335,410
- -------------------------------------------------------------------------------------
DENMARK (1.0%)
FLSmidth & Co. A/S 1,350(d) 99,754
- -------------------------------------------------------------------------------------
FRANCE (2.3%)
Euler Hermes SA 1,000(b) 94,121
Renault SA 2,550(b) 141,647
---------------
Total 235,768
- -------------------------------------------------------------------------------------
GERMANY (4.6%)
Linde AG 1,690 243,242
MTU Aero Engines Holding AG 3,699 223,355
---------------
Total 466,597
- -------------------------------------------------------------------------------------
HONG KONG (2.6%)
361 Degrees International Ltd. 100,000(d) 96,891
Great Eagle Holdings Ltd. 54,359 162,705
---------------
Total 259,596
- -------------------------------------------------------------------------------------
INDIA (2.9%)
State Bank of India, GDR 1,010 139,380
Union Bank of India 18,085 153,860
---------------
Total 293,240
- -------------------------------------------------------------------------------------
INDONESIA (2.9%)
Bank Rakyat Indonesia Persero Tbk PT 123,000 156,933
PT Perusahaan Gas Negara Tbk 309,000 140,062
---------------
Total 296,995
- -------------------------------------------------------------------------------------
IRELAND (1.6%)
Accenture PLC, Class A 3,596 160,777
- -------------------------------------------------------------------------------------
ITALY (1.7%)
Prysmian SpA 9,000 174,427
- -------------------------------------------------------------------------------------
JAPAN (4.5%)
Asahi Breweries Ltd. 9,800 197,900
Makita Corp. 4,500 158,258
Ushio, Inc. 5,800 96,655
---------------
Total 452,813
- -------------------------------------------------------------------------------------
MEXICO (1.4%)
America Movil SAB de CV, Series L, ADR 2,500 143,149
- -------------------------------------------------------------------------------------
NETHERLANDS (2.0%)
Fugro NV-CVA 2,890 204,380
- -------------------------------------------------------------------------------------
PANAMA (1.7%)
Copa Holdings SA, Class A 3,350 169,946
- -------------------------------------------------------------------------------------
SOUTH AFRICA (1.9%)
MTN Group Ltd. 10,750 193,563
- -------------------------------------------------------------------------------------
SOUTH KOREA (2.5%)
NHN Corp. 1,400(b) 248,249
- -------------------------------------------------------------------------------------
SWITZERLAND (5.1%)
Nestle SA 5,150 282,041
Tyco Electronics Ltd. 7,500 237,600
---------------
Total 519,641
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
TURKEY (2.0%)
Turkiye Garanti Bankasi AS 34,000 $205,419
- -------------------------------------------------------------------------------------
UNITED KINGDOM (7.7%)
Aggreko PLC 2,800 70,657
BG Group PLC 9,900 192,800
Ensco PLC, ADR 2,000 92,680
Tesco PLC 22,000 150,458
The Weir Group PLC 5,500 137,292
Tullow Oil PLC 6,800 129,105
---------------
Total 772,992
- -------------------------------------------------------------------------------------
UNITED STATES (32.1%)
Advance Auto Parts, Inc. 3,200 207,936
Air Products & Chemicals, Inc. 1,200 101,964
American Tower Corp., Class A 1,991(b) 102,756
Blackstone Group LP 12,000 161,760
Cloud Peak Energy, Inc. 6,275(b) 108,997
Colgate-Palmolive Co. 1,446 111,516
Flowserve Corp. 1,350 135,000
Hartford Financial Services Group, Inc. 5,045 120,979
Hewlett-Packard Co. 3,500 147,210
Laboratory Corp. of America Holdings 2,499(b) 203,219
McDonald's Corp. 3,517 273,517
Micron Technology, Inc. 12,579(b) 104,028
Oasis Petroleum, Inc. 2,600(b) 55,302
Roper Industries, Inc. 2,300 159,689
The Coca-Cola Co. 4,485 275,019
Thermo Fisher Scientific, Inc. 4,790(b) 246,302
Union Pacific Corp. 2,100 184,128
Waste Connections, Inc. 3,800 154,812
WESCO International, Inc. 5,200(b) 222,664
World Fuel Services Corp. 5,696 160,797
---------------
Total 3,237,595
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $8,330,724) $9,579,995
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (5.1%)
SHARES VALUE(a)
Columbia Short-Term Cash Fund, 0.241% 515,048(f) $515,048
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $515,048) $515,048
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (1.4%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS(e)
Deutsche Bank AG
dated 10-29-10, matures 11-01-10,
repurchase price
$146,094 0.230% $146,092 $146,092
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $146,092) $146,092
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $8,991,864)(g) $10,241,135
=====================================================================================
</Table>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at Oct. 31, 2010:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(a)
- -----------------------------------------------------------------------
Aerospace & Defense 2.2% $223,355
Airlines 1.7 169,946
Automobiles 1.4 141,647
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES
BY INDUSTRY (CONTINUED)
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(a)
- -----------------------------------------------------------------------
Beverages 4.7% $472,919
Capital Markets 1.6 161,760
Chemicals 3.4 345,206
Commercial Banks 9.2 924,872
Commercial Services & Supplies 3.7 377,439
Computers & Peripherals 1.5 147,210
Construction & Engineering 1.0 99,754
Electrical Equipment 4.3 430,771
Electronic Equipment, Instruments &
Components 2.4 237,600
Energy Equipment & Services 2.9 297,060
Food & Staples Retailing 1.5 150,458
Food Products 2.8 282,041
Gas Utilities 1.4 140,062
Health Care Providers & Services 2.0 203,219
Hotels, Restaurants & Leisure 2.7 273,517
Household Durables 1.0 97,422
Household Products 1.1 111,516
Insurance 3.7 378,721
Internet Software & Services 2.5 248,249
IT Services 2.5 253,080
Life Sciences Tools & Services 2.4 246,302
Machinery 4.3 430,550
Metals & Mining 0.9 86,691
Oil, Gas & Consumable Fuels 7.3 740,960
Real Estate Management & Development 1.6 162,705
Road & Rail 1.8 184,128
Semiconductors & Semiconductor Equipment 1.0 104,028
Software 4.8 489,848
Specialty Retail 2.1 207,936
Textiles, Apparel & Luxury Goods 1.0 96,891
Trading Companies & Distributors 2.2 222,664
Wireless Telecommunication Services 4.3 439,468
Other(1) 6.5 661,140
- -----------------------------------------------------------------------
Total $10,241,135
- -----------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
INVESTMENTS IN DERIVATIVES
PORTFOLIO SWAP(1) OUTSTANDING AT OCT. 31, 2010
<Table>
<Caption>
NEXT NET UNREALIZED
COUNTERPARTY DESCRIPTION RESET DATE APPRECIATION
- -------------------------------------------------------------------------------
UBS The Fund receives (pays) the total Nov. 8, 2010 $80,931
return on a custom basket of long
(short) equity positions and pays
(receives) a floating rate based on
the 1-day LIBOR which is
denominated in various foreign
currencies based on the local
currencies of the securities
underlying the custom basket.
- -------------------------------------------------------------------------------
Total $80,931
- -------------------------------------------------------------------------------
</Table>
SUMMARY OF PORTFOLIO SWAP EXPOSURE BY INDUSTRY
The following table represents the exposure of the custom basket of equity
securities underlying the portfolio swap by industry classifications as a
percentage of net assets at Oct. 31, 2010:
<Table>
<Caption>
VALUE
PERCENTAGE OF -----------------------------------
NET ASSETS LONG SHORT NET
- -----------------------------------------------------------------------------------
Capital Markets (1.3)% $-- $(133,187) $(133,187)
Commercial Banks 2.0 197,869 -- 197,869
Communications Equipment 2.3 228,300 -- 228,300
Computers & Peripherals 3.0 300,870 -- 300,870
Construction & Engineering (1.0) -- (98,300) (98,300)
Construction Materials (1.5) -- (155,552) (155,552)
Diversified Financial
Services 3.0 305,534 -- 305,534
Electric Utilities (2.4) -- (242,789) (242,789)
Health Care Equipment &
Supplies (0.6) 190,132 (246,808) (56,676)
Health Care Providers &
Services 1.6 157,220 -- 157,220
Hotels, Restaurants, &
Leisure (1.9) -- (188,139) (188,139)
IT Services 5.1 516,960 -- 516,960
Machinery 0.8 164,768 (83,269) 81,499
Media (0.9) -- (95,625) (95,625)
Oil, Gas & Consumable Fuels 0.7 185,913 (116,727) 69,186
Real Estate Investment Trusts
(REITs) (2.1) -- (214,160) (214,160)
Road & Rail (1.7) -- (168,829) (168,829)
Software 3.5 352,800 -- 352,800
Specialty Retail 2.0 201,400 -- 201,400
Textiles, Apparel & Luxury
Goods 0.9 191,069 (101,810) 89,259
U.S. Large Cap (8.2) -- (829,710) (829,710)
Water Utilities (0.9) (86,120) (86,120)
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
20 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF PORTFOLIO SWAP EXPOSURE BY INDUSTRY (CONTINUED)
(1) The Fund has entered into a portfolio swap agreement. A portfolio swap
allows the Fund to obtain exposure to a custom basket of securities and
foreign markets (both long and short exposures) without owning or taking
physical custody of such securities. Under the terms of the agreement,
payments made by the Fund or the counterparty are based on the total return
of the reference assets within the basket. That is, one party agrees to pay
another party the return on the basket in return for a specified interest
rate. The agreement allows the Investment Manager of the Fund to alter the
composition of the custom basket by trading in and out of the notional
security positions at its discretion.
The notional amounts of the security positions held in the basket are not
recorded in the financial statements. The portfolio swap is valued daily,
and the change in value is recorded as unrealized appreciation
(depreciation). The swap resets monthly at which time the Fund settles in
cash with the counterparty. Payments received or made are recorded as
realized gains (losses).
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
</Table>
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) At Oct. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
DEUTSCHE BANK AG (0.230%)
SECURITY DESCRIPTION VALUE(a)
-----------------------------------------------------------
Fannie Mae Pool $149,013
-----------------------------------------------------------
Total market value of collateral securities $149,013
-----------------------------------------------------------
</Table>
(f) Affiliated Money Market Fund - See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(g) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $9,037,898 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $1,268,356
Unrealized depreciation (65,119)
-----------------------------------------------------------
Net unrealized appreciation $1,203,237
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
- --------------------------------------------------------------------------------
22 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in valuations may include, but are not limited to,
financial statement analysis, capital account balances, discount rates and
estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCT. 31, 2010
-----------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS(B) INPUTS INPUTS TOTAL
- ----------------------------------------------------------------------------------------------
Equity Securities
Common Stocks $9,579,995 $-- $-- $9,579,995
- ----------------------------------------------------------------------------------------------
Total Equity Securities 9,579,995 -- -- 9,579,995
- ----------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(c) 515,048 -- -- 515,048
Investments of Cash
Collateral Received
for Securities on
Loan -- 146,092 -- 146,092
- ----------------------------------------------------------------------------------------------
Total Other 515,048 146,092 -- 661,140
- ----------------------------------------------------------------------------------------------
Investments in Securities 10,095,043 146,092 -- 10,241,135
Derivatives(d)
Assets
Swap Contracts -- 80,931 -- 80,931
- ----------------------------------------------------------------------------------------------
Total $10,095,043 $227,023 $-- $10,322,066
- ----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) Includes certain securities trading outside the U.S. whose values were
adjusted at Oct. 31, 2009 as a result of significant market movements
following the close of local trading, and were classified as Level 2.
Values were not adjusted as of Oct. 31, 2010. Therefore, these investment
securities were classified as Level 1 instead of Level 2 at Oct. 31, 2010.
The amount of securities transferred out of Level 2 into Level 1 during the
period was $1,356,738. Transfers between Levels 1 and 2 are determined
based on the fair value at the beginning of the period for security
positions held throughout the period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Oct. 31, 2010.
(d) Derivative instruments are valued at unrealized appreciation
(depreciation).
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 23
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
24 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $8,330,724) $ 9,579,995
Affiliated money market fund (identified cost $515,048) 515,048
Investments of cash collateral received for securities on loan
(identified cost $146,092) 146,092
- ------------------------------------------------------------------------------
Total investments in securities (identified cost $8,991,864) 10,241,135
Cash 2
Foreign currency holdings (identified cost $27,440) 28,350
Receivable from Investment Manager 353
Capital shares receivable 21,778
Dividends and accrued interest receivable 7,421
Receivable for investment securities sold 89,848
Reclaims receivable 5,448
Unrealized appreciation on swap contracts 80,931
- ------------------------------------------------------------------------------
Total assets 10,475,266
- ------------------------------------------------------------------------------
LIABILITIES
Payable for investment securities purchased 159,684
Payable upon return of securities loaned 146,092
Accrued investment management services fees 289
Accrued distribution fees 43
Accrued transfer agency fees 81
Accrued administrative services fees 22
Accrued plan administration services fees 1
Other accrued expenses 70,574
- ------------------------------------------------------------------------------
Total liabilities 376,786
- ------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $10,098,480
- ------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 4,834
Additional paid-in capital 9,102,052
Undistributed net investment income 122,554
Accumulated net realized gain (loss) (461,496)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies 1,330,536
- ------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $10,098,480
- ------------------------------------------------------------------------------
*Value of securities on loan $ 136,296
- ------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $4,320,527 207,166 $20.86(1)
Class B $ 303,638 14,721 $20.63
Class C $ 181,374 8,801 $20.61
Class I $5,163,998 246,500 $20.95
Class R $ 10,370 500 $20.74
Class R4 $ 90,339 4,331 $20.86
Class Z $ 28,234 1,348 $20.95
- ----------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $22.13. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 25
STATEMENT OF OPERATIONS --------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 133,224
Interest 54
Income distributions from affiliated money market fund 1,032
Income from securities lending -- net 1,055
Foreign taxes withheld (7,699)
- ------------------------------------------------------------------------
Total income 127,666
- ------------------------------------------------------------------------
Expenses:
Investment management services fees 96,692
Distribution fees
Class A 8,488
Class B 3,593
Class C 1,535
Class R 47
Class R3 19
Transfer agency fees
Class A 4,310
Class B 476
Class C 198
Class R 6
Class R3 4
Class R4 53
Class R5 4
Administrative services fees 6,913
Plan administration services fees
Class R 19
Class R3 19
Class R4 220
Compensation of board members 251
Custodian fees 13,745
Printing and postage 34,022
Registration fees 88,049
Professional fees 37,909
Other 5,021
- ------------------------------------------------------------------------
Total expenses 301,593
Expenses waived/reimbursed by the Investment Manager and
its affiliates (173,544)
- ------------------------------------------------------------------------
Total net expenses 128,049
- ------------------------------------------------------------------------
Investment income (loss) -- net (383)
- ------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
26 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $1,055,296
Foreign currency transactions 6,340
Swap transactions 121,378
- ------------------------------------------------------------------------
Net realized gain (loss) on investments 1,183,014
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 490,188
- ------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 1,673,202
- ------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $1,672,819
- ------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 27
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ (383) $ 46,023
Net realized gain (loss) on investments 1,183,014 (839,697)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 490,188 2,246,014
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 1,672,819 1,452,340
- --------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (67,438) --
Class B (6,160) --
Class C (2,835) --
Class I (127,867) --
Class R (199) --
Class R3 (218) --
Class R4 (2,332) --
Class R5 (256) --
- --------------------------------------------------------------------------------------
Total distributions (207,305) --
- --------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 2,417,981 1,183,549
Class B shares 162,448 152,947
Class C shares 68,669 65,424
Class R4 shares 49,967 31,011
Class Z shares 28,110 N/A
Reinvestment of distributions at net asset value
Class A shares 64,358 --
Class B shares 5,630 --
Class C shares 1,903 --
Class R4 shares 2,083 --
Conversions from Class B to Class A
Class A shares 98,714 49,083
Class B shares (98,714) (49,083)
Payments for redemptions
Class A shares (1,497,316) (1,216,964)
Class B shares (65,530) (155,807)
Class C shares (38,722) (56,896)
Class R3 shares (9,480) --
Class R4 shares (31,125) (1,985)
Class R5 shares (9,480) --
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 1,149,496 1,279
- --------------------------------------------------------------------------------------
Total increase (decrease) in net assets 2,615,010 1,453,619
Net assets at beginning of year 7,483,470 6,029,851
- --------------------------------------------------------------------------------------
Net assets at end of year $10,098,480 $ 7,483,470
- --------------------------------------------------------------------------------------
Undistributed net investment income $ 122,554 $ 202,524
- --------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
28 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for periods shown. Per share net investment income (loss)
amounts are calculated based on average shares outstanding during the period.
Total returns assume reinvestment of all dividends and distributions. Total
returns do not reflect payment of sales charges, if any, and are not annualized
for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.65 $13.97 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.03) .09 .00(b)
Net gains (losses) (both realized and
unrealized) 3.71 3.59 (6.03)
- ----------------------------------------------------------------------------------
Total from investment operations 3.68 3.68 (6.03)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.47) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.86 $17.65 $13.97
- ----------------------------------------------------------------------------------
TOTAL RETURN 21.21% 26.34% (30.15%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 3.73% 3.78% 5.55%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.63% 1.55% 1.55%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) (.14%) .59% (.07%)(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $3 $2
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.47 $13.94 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.16) (.01) (.02)
Net gains (losses) (both realized and
unrealized) 3.66 3.54 (6.04)
- ----------------------------------------------------------------------------------
Total from investment operations 3.50 3.53 (6.06)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.34) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.63 $17.47 $13.94
- ----------------------------------------------------------------------------------
TOTAL RETURN 20.32% 25.32% (30.30%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 4.15% 4.52% 6.33%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.36% 2.31% 2.31%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) (.84%) (.05%) (.55%)(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
30 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.48 $13.94 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.17) (.02) (.03)
Net gains (losses) (both realized and
unrealized) 3.66 3.56 (6.03)
- ----------------------------------------------------------------------------------
Total from investment operations 3.49 3.54 (6.06)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.61 $17.48 $13.94
- ----------------------------------------------------------------------------------
TOTAL RETURN 20.27% 25.39% (30.30%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 4.42% 4.58% 6.22%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.37% 2.30% 2.30%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) (.89%) (.12%) (.79%)(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.72 $13.98 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .04 .14 .03
Net gains (losses) (both realized and
unrealized) 3.71 3.60 (6.05)
- ----------------------------------------------------------------------------------
Total from investment operations 3.75 3.74 (6.02)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.52) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.95 $17.72 $13.98
- ----------------------------------------------------------------------------------
TOTAL RETURN 21.58% 26.75% (30.10%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 3.23% 3.42% 4.94%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.28% 1.22% 1.21%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) .19% .94% .63%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $4 $3
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
32 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R* -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.56 $13.96 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.11) .03 .00(b)
Net gains (losses) (both realized and
unrealized) 3.69 3.57 (6.04)
- ----------------------------------------------------------------------------------
Total from investment operations 3.58 3.60 (6.04)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.40) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.74 $17.56 $13.96
- ----------------------------------------------------------------------------------
TOTAL RETURN 20.69% 25.79% (30.20%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 3.99% 4.22% 5.74%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.04% 1.96% 1.81%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) (.58%) .19% .03%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 33
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $17.67 $13.98 $20.00
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01) .08 .01
Net gains (losses) (both realized and
unrealized) 3.70 3.61 (6.03)
- ----------------------------------------------------------------------------------
Total from investment operations 3.69 3.69 (6.02)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.50) -- --
- ----------------------------------------------------------------------------------
Net asset value, end of period $20.86 $17.67 $13.98
- ----------------------------------------------------------------------------------
TOTAL RETURN 21.26% 26.40% (30.10%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 3.49% 3.92% 5.38%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.57% 1.47% 1.36%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) (.06%) .52% .30%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 128% 133% 36%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
34 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED
CLASS Z OCT. 31,
PER SHARE DATA 2010(f)
Net asset value, beginning of period $19.93
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and
unrealized) 1.03
- -------------------------------------------------------------
Total from investment operations 1.02
- -------------------------------------------------------------
Net asset value, end of period $20.95
- -------------------------------------------------------------
TOTAL RETURN 5.12%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 55.17%(d)
- -------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.52%(d)
- -------------------------------------------------------------
Net investment income (loss) (.48%)(d)
- -------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
- -------------------------------------------------------------
Portfolio turnover rate 128%
- -------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
* Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(a) For the period from Aug. 1, 2008 (when shares became available) to Oct. 31,
2008.
(b) Rounds to less than $0.01 per share.
(c) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the reported expense ratios.
(d) Annualized.
(e) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds), before
giving effect to any performance incentive adjustment.
(f) For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Columbia Global Extended Alpha Fund (formerly known as Threadneedle Global
Extended Alpha Fund) (the Fund) is a series of RiverSource Global Series, Inc.
(the Corporation) and is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as a diversified, open-end management investment
company. The Corporation has 10 billion authorized shares of capital stock that
can be allocated among the separate series as designated by the Corporation's
Board of Directors (the Board).
The Fund offers Class A, Class B, Class C, Class I, Class R, Class R4 and Class
Z shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class R shares are offered without a front-end sales charge or CDSC to
qualifying institutional investors. Effective Sept. 7, 2010, Class R2 shares
were renamed Class R shares.
- - Class R4 shares are not subject to sales charges, however, this class is
closed to new investors effective Dec. 31, 2010.
- - Class Z shares are offered without a front-end sales charge or CDSC to
certain eligible investors. Class Z shares became effective Sept. 27, 2010.
- --------------------------------------------------------------------------------
36 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
At Aug. 27, 2010, all Class R3 and Class R5 shares were liquidated. The shares
in these classes had consisted solely of seed capital from Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager).
At Oct. 31, 2010, the Investment Manager owned 100% of Class I and Class R
shares. At Oct. 31, 2010, the Investment Manager owned approximately 52% of the
total outstanding Fund shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market conditions as of the close of the NYSE. The fair value of a security is
likely to be different from the quoted or published price, if available. Swap
transactions are valued through an independent pricing service or broker, or if
neither is available, through an internal model based upon observable inputs.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Oct. 31, 2010, foreign currency holdings consisted of
multiple denominations, primarily Brazilian reais.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
- --------------------------------------------------------------------------------
38 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
SECURITIES SOLD SHORT
The Fund may enter into short sales of securities that it concurrently holds or
for which it holds no corresponding position. Short selling is the practice of
selling securities which have been borrowed from a third party in anticipation
of a decline in the market price of that security. Securities which have been
sold short represent a liability of the Fund to acquire specific securities at
prevailing market prices at a future date in order to satisfy the obligation to
deliver the securities sold. The Fund is required to return securities borrowed
for the short sale at the lender's demand. A realized gain, limited to the price
at which the Fund sold the security short, or a realized loss, unlimited in
size, will be recorded upon the termination of a short sale. Short sales are
collateralized with segregated securities or cash held at the custodian as noted
in the Portfolio of Investments, if any. The collateral required is determined
daily based on the market value of the securities sold short. At Oct. 31, 2010,
the Fund had no outstanding securities sold short.
The Fund is liable to pay the counterparty for any dividends accrued on a
security it has borrowed and sold short and to pay interest for any net
financing costs incurred during the time the short position is held by the Fund.
Such dividends (recognized on ex-date) and interest are recorded as an expense
and shown in the Statement of Operations. During the year ended Oct. 31, 2010,
the Fund had no dividend or interest expense related to securities sold short in
the Statement of Operations.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
normally distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may also use derivative instruments to mitigate certain
investment risks, such as foreign currency exchange rate risk, interest rate
risk and credit risk. Derivatives may involve various risks, including the
potential inability of the counterparty to fulfill its obligation under the
terms of the contract, the potential for an illiquid secondary market and the
potential for market movements which may expose the Fund to gains or losses in
excess of the amount shown in the Statement of Assets and Liabilities.
- --------------------------------------------------------------------------------
40 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts to hedge
the currency exposure associated with some or all of the Fund's securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
PORTFOLIO SWAPS
The Fund entered into a portfolio swap transaction, which allowed the Fund to
obtain exposure to a custom basket of securities and foreign markets (both long
and short exposures) without owning or taking physical custody of such
securities. Under the terms of the contract, payments made by the Fund or the
counterparty are based on the total return of the reference assets within the
basket in return for a specified interest rate. The contract allows the
Investment Manager of the Fund to alter the composition of the custom basket by
trading in and out of the notional reference security positions at its
discretion.
The notional amounts of the swap transactions are not recorded in the financial
statements. The portfolio swap is valued daily, and the change in value is
recorded as unrealized appreciation (depreciation). The swap resets monthly at
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
which time the Fund settles in cash with the counterparty. Payments received (or
made) by the Fund are recorded as realized gains (losses). See the Portfolio
Swap Outstanding table following the Portfolio of Investments for additional
information.
Portfolio swap transactions may be subject to liquidity risk, which exists when
a particular swap is difficult to purchase or sell. It may not be possible for
the Fund to initiate a transaction or liquidate a position at an advantageous
time or price, which may result in significant losses. Portfolio swaps are
subject to the risk associated with the investment in the reference securities
within the basket. The risk in the case of short portfolio swap transactions is
unlimited based on the potential for unlimited increases in the market value of
the reference securities in the basket. This risk may be offset if the Fund
holds any of the reference securities. The risk in the case of long portfolio
swap transactions is limited to the current notional amount of the portfolio
swap.
Portfolio swap transactions are also subject to the risk of the counterparty not
fulfilling its obligations under the contract (counterparty credit risk). The
Fund attempts to mitigate counterparty credit risk by entering into portfolio
swap transactions only with counterparties that meet prescribed levels of
creditworthiness, as determined by the Investment Manager. The Fund and any
counterparty are required to maintain an agreement that requires the Fund and
that counterparty to monitor (on a daily basis) the net market value of all
derivative transactions entered into pursuant to the contract between the Fund
and such counterparty. If the net market value of such derivatives transactions
between the Fund and that counterparty exceeds a certain threshold (as defined
in the agreement), the Fund or the counterparty is required to post cash and/or
securities as collateral. Market values of derivatives transactions presented in
the financial statements are not netted with the market values of other
derivatives transactions or with any collateral amounts posted by the Fund or
any counterparty.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
- --------------------------------------------------------------------------------
42 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
<Table>
<Caption>
ASSET DERIVATIVES LIABILITY DERIVATIVES
------------------------------- -------------------------------
STATEMENT OF ASSETS STATEMENT OF ASSETS
RISK EXPOSURE AND LIABILITIES AND LIABILITIES
CATEGORY LOCATION FAIR VALUE LOCATION FAIR VALUE
- -------------------------------------------------------------------------------------------
Unrealized
appreciation on
swap
Equity contracts transactions $80,931 N/A N/A
- -------------------------------------------------------------------------------------------
</Table>
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- -----------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS SWAPS TOTAL
- -----------------------------------------------------------------------------
Equity contracts $ -- $121,378 $121,378
- -----------------------------------------------------------------------------
Foreign exchange contracts 1,406 -- 1,406
- -----------------------------------------------------------------------------
Total $1,406 $121,378 $122,784
- -----------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
- -----------------------------------------------------------------------
FORWARD FOREIGN
CURRENCY EXCHANGE
RISK EXPOSURE CATEGORY CONTRACTS SWAPS TOTAL
- -----------------------------------------------------------------------------
Equity contracts $-- $76,959 $76,959
- -----------------------------------------------------------------------------
Foreign exchange contracts -- -- --
- -----------------------------------------------------------------------------
Total $-- $76,959 $76,959
- -----------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At Oct. 31, 2010, the Fund had no outstanding forward foreign currency exchange
contracts. The monthly average gross notional amount for these contracts was
$20,000 for the year ended Oct. 31, 2010.
PORTFOLIO SWAP CONTRACT
At Oct. 31, 2010, the value of long and short securities underlying the
portfolio swap contract were $2,847,767 and $2,766,836 respectively. The monthly
average value of long and short securities underlying the portfolio swap
contract were $1,921,828 and $1,921,282, respectively for the year ended Oct.
31, 2010.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement (IMSA), the Investment Manager
is responsible for the management of the Fund. Day-to-day portfolio management
of the Fund is provided by the Fund's subadviser. See Subadvisory agreement
below. The management fee is an annual fee that is equal to a percentage of the
Fund's average daily net assets that declines from 1.05% to 0.99% as the Fund's
net assets increase. The fee may be adjusted upward or downward by a performance
incentive adjustment (PIA) determined monthly by measuring the percentage
difference over a rolling 36-month period between the annualized performance of
one Class A share of the Fund and the annualized performance of the MSCI All
Country World Index. In certain circumstances, the Board may approve a change in
the index. The maximum adjustment is 0.50% per year. If the performance
difference is less than 1.00%, the adjustment will be zero. The first adjustment
was made on Aug. 1, 2010 and covered the 24-month period beginning Aug. 1, 2008.
The adjustment increased the management fee by $5,960 for the year ended Oct.
31, 2010. The management fee for the year ended Oct. 31, 2010 was 1.12% of the
Fund's average daily net assets, including the adjustment under the terms of the
performance incentive arrangement.
In September 2010, the Board approved, subject to approval by shareholders, an
amended IMSA that would eliminate the Fund's PIA. If approved by Fund
shareholders, the IMSA proposal is expected to be effective in the second
quarter of 2011. If not approved, the current IMSA will stay in effect including
any adjustment under the terms of the PIA.
SUBADVISORY AGREEMENT
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
44 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $11.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable to Class R and Class R4 shares. In addition, the Transfer Agent
charged an annual fee per inactive account and received reimbursement from the
Fund for certain out-of-pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's shares maintained in each such omnibus account (other than omnibus
accounts for which American Enterprise Investment Services, Inc. is the broker
of record or accounts where the beneficial shareholder is a customer of
Ameriprise Financial Services, Inc., which are paid a per account fee). The
Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is
not entitled to reimbursement for such fees from the Fund.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.13%
Class B.............................................. 0.13
Class C.............................................. 0.13
Class R.............................................. 0.06
Class R4............................................. 0.06
Class Z.............................................. 0.10*
</Table>
* Annualized.
Class I shares do not pay transfer agent fees.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services. Prior to Sept. 7, 2010,
the Fund also paid an annual fee at a rate of 0.25% of the Fund's average daily
net assets attributable to Class R shares for such services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A shares,
a fee at an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R shares (of which up to 0.25% may be used for services)
and a fee at an annual rate of up to 1.00% of the Fund's average daily net
assets attributable to Class B and Class C shares. For Class B and Class C
shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $37,000 and $1,000 for Class
B and Class C shares, respectively. These amounts are based on the most recent
information available as of July 31, 2010, and may be recovered from
- --------------------------------------------------------------------------------
46 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
future payments under the distribution plan or CDSCs. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $8,844 for Class A and $35 for Class B for the
year ended Oct. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Oct. 31, 2010, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*), including the adjustment under the terms
of a performance incentive arrangement, were as follows:
<Table>
Class A.............................................. 1.63%
Class B.............................................. 2.36
Class C.............................................. 2.37
Class I.............................................. 1.28
Class R.............................................. 2.04
Class R4............................................. 1.57
Class Z.............................................. 1.52
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A............................................. $1,255
Class B............................................. 133
Class C............................................. 60
Class R4............................................ 9
</Table>
The management fees and other Fund level expenses waived/reimbursed were
$172,087.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and reimburse certain expenses until Dec. 31, 2010, unless sooner
terminated at the sole discretion of the Board, such that net expenses
(excluding fees and expenses of acquired funds*), before giving effect to any
performance
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
incentive adjustment, will not exceed the following percentage of the class'
average daily net assets:
<Table>
Class A.............................................. 1.55%
Class B.............................................. 2.31
Class C.............................................. 2.30
Class I.............................................. 1.21
Class R.............................................. 2.01
Class R4............................................. 1.51
Class Z.............................................. 1.30
</Table>
Effective Jan. 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
Dec. 31, 2011, unless sooner terminated at the sole discretion of the Board,
such that net expenses (excluding fees and expenses of acquired funds*), before
giving effect to any performance incentive adjustment, will not exceed the
following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.55%
Class B.............................................. 2.30
Class C.............................................. 2.30
Class I.............................................. 1.18
Class R.............................................. 1.80
Class R4............................................. 1.48
Class Z.............................................. 1.30
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $11,315,596 and $10,382,612, respectively, for the year
ended Oct. 31, 2010. Realized gains and losses are determined on an identified
cost basis.
- --------------------------------------------------------------------------------
48 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ---------------------------------------------------------------
CLASS A
Sold 128,007 77,358
Converted from Class B* 5,339 2,995
Reinvested distributions 3,522 --
Redeemed (79,720) (88,344)
- ---------------------------------------------------------------
Net increase (decrease) 57,148 (7,991)
- ---------------------------------------------------------------
CLASS B
Sold 8,750 10,919
Reinvested distributions 309 --
Converted to Class A* (5,385) (3,019)
Redeemed (3,741) (10,228)
- ---------------------------------------------------------------
Net increase (decrease) (67) (2,328)
- ---------------------------------------------------------------
CLASS C
Sold 3,707 4,412
Reinvested distributions 105 --
Redeemed (2,165) (3,982)
- ---------------------------------------------------------------
Net increase (decrease) 1,647 430
- ---------------------------------------------------------------
CLASS R3
Redeemed (500) --
- ---------------------------------------------------------------
Net increase (decrease) (500) --
- ---------------------------------------------------------------
CLASS R4
Sold 2,622 1,836
Reinvested distributions 114 --
Redeemed (1,750) (154)
- ---------------------------------------------------------------
Net increase (decrease) 986 1,682
- ---------------------------------------------------------------
CLASS R5
Redeemed (500) --
- ---------------------------------------------------------------
Net increase (decrease) (500) --
- ---------------------------------------------------------------
CLASS Z**
Sold 1,348 N/A
- ---------------------------------------------------------------
Net increase (decrease) 1,348 N/A
- ---------------------------------------------------------------
</Table>
* Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
** For the period from Sept. 27, 2010 (when shares became available) to Oct.
31, 2010.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Oct. 31, 2010,
securities valued at $136,296 were on loan, secured by cash collateral of
$146,092 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$1,055 earned from securities lending for the year ended Oct. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $6,698,379 and $6,474,641, respectively, for the year ended
Oct. 31, 2010. The income distributions received with respect to the Fund's
investment in Columbia Short-Term Cash Fund can be found in the Statement of
Operations and the Fund's invested balance in Columbia Short-Term Cash Fund at
Oct. 31, 2010, can be found in the Portfolio of Investments.
- --------------------------------------------------------------------------------
50 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
10. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, recognition of unrealized appreciation (depreciation) for certain
derivative investments, re-characterization of real estate investment trust
distributions, investments in partnerships, foreign tax credits and losses
deferred due to wash sales. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains were recorded by the
Fund.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 51
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $127,718
and accumulated net realized loss has been increased by $127,718.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- --------------------------------------------------------------
Ordinary income............................... $207,305 $--
Long-term capital gain........................ -- --
</Table>
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income.................... $ 203,698
Undistributed accumulated long-term gain......... $ --
Accumulated realized loss........................ $ (415,463)
Unrealized appreciation (depreciation)........... $1,203,359
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$415,463 at Oct. 31, 2010, that if not offset by capital gains will expire in
2017.
For the year ended Oct. 31, 2010, $992,480 of capital loss carry-over was
utilized. It is unlikely the Board will authorize a distribution of any net
realized capital gains until the available capital loss carry-over has been
offset or expires. There is no assurance that the Fund will be able to utilize
all of its capital loss carry-over before it expires.
11. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
SHORT SELLING RISK
The Fund may make short sales, which involves selling a security the Fund does
not own in anticipation that the security's price will decline. The Fund's
potential losses could exceed those of other mutual funds which hold only long
security positions if the value of the securities held long decreases and the
value of the securities sold short increases. The Fund's use of short sales in
effect "leverages" the Fund, as the Fund may use the cash proceeds from the
short sales to invest in additional long securities positions. Leveraging
potentially exposes the Fund to greater risks due to
- --------------------------------------------------------------------------------
52 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
unanticipated market movements, which may magnify losses and increase volatility
of returns. There is no assurance that a leveraging strategy will be successful.
12. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
13. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 53
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Jones v. Harris Associates. On December 9, 2010, the District Court reinstated
its July 9, 2007 summary judgment order in favor of the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
54 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COLUMBIA GLOBAL EXTENDED ALPHA FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Columbia Global Extended Alpha Fund (formerly
known as Threadneedle Global Extended Alpha Fund) (the Fund) (one of the
portfolios constituting the RiverSource Global Series, Inc.) as of October 31,
2010, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the two years then ended and for
the period from August 1, 2008 (when shares became available) to October 31,
2008. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 55
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) ------------
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Columbia Global Extended Alpha Fund of the RiverSource Global Series, Inc. at
October 31, 2010, the results of its operations for the year then ended, the
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the two years then ended and for the period
from August 1, 2008 (when shares became available) to October 31, 2008, in
conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
56 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION -------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 100%
Dividends Received Deduction for corporations................ 24.76%
U.S. Government Obligations.................................. 0.00%
Foreign Taxes Paid........................................... $5,923
Foreign Source Income........................................ $44,791
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 57
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
58 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 59
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
60 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 61
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
62 COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
COLUMBIA GLOBAL EXTENDED ALPHA FUND -- 2010 ANNUAL REPORT 63
COLUMBIA GLOBAL EXTENDED ALPHA FUND
(formerly known as Threadneedle Global Extended Alpha Fund)
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6527 AJ (12/10)
</Table>
Annual Report
and Prospectus
(COLUMBIA MANAGEMENT LOGO)
THREADNEEDLE
GLOBAL EQUITY INCOME FUND
- --------------------------------------------------------------------------------
ANNUAL REPORT FOR THE PERIOD ENDED
OCTOBER 31, 2010
(Prospectus also enclosed)
THREADNEEDLE GLOBAL EQUITY INCOME FUND SEEKS TO PROVIDE SHAREHOLDERS WITH A HIGH
LEVEL OF CURRENT INCOME AND SECONDARILY, GROWTH OF CAPITAL.
This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Manager Commentary................. 6
The Fund's Long-term Performance... 12
Fund Expenses Example.............. 14
Portfolio of Investments........... 16
Statement of Assets and
Liabilities...................... 24
Statement of Operations............ 25
Statements of Changes in Net
Assets........................... 27
Financial Highlights............... 28
Notes to Financial Statements...... 34
Report of Independent Registered
Public Accounting Firm........... 51
Federal Income Tax Information..... 53
Board Members and Officers......... 54
Proxy Voting....................... 59
</Table>
In August 2010, the Board of Directors of Threadneedle Global Equity Income
Fund (the "Fund") approved a proposal to merge the Fund with and into Columbia
Global Equity Fund (formerly known as Threadneedle Global Equity Fund). The
merger is expected to be a tax-free reorganization for U.S. federal income tax
purposes. More information about Columbia Global Equity Fund and the
definitive terms of the proposed merger will be included in proxy materials.
The merger is subject to certain conditions, including final approval by
shareholders of the Fund. It is currently anticipated that proxy materials
regarding the merger will be distributed to shareholders of the Fund later
this year or in early 2011, and that a meeting of shareholders to consider the
merger will be held in the first half of 2011.
SEE THE FUND'S PROSPECTUS FOR RISKS ASSOCIATED WITH INVESTING IN THE FUND.
- --------------------------------------------------------------------------------
2 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
FUND SUMMARY
- --------------------------------------------------------------------------------
> Threadneedle Global Equity Income Fund (the Fund) Class A shares gained 23.01%
(excluding sales charge) for the 12 months ended Oct. 31, 2010.
> The Fund outperformed its benchmark, the Morgan Stanley Capital International
(MSCI) All Country World Index, which advanced 14.65% for the 12-month period.
ANNUALIZED TOTAL RETURNS (for period ended Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
SINCE
INCEPTION
1 YEAR 8/1/08
- ----------------------------------------------------------------
Threadneedle Global Equity Income Fund Class
A (excluding sales charge) +23.01% +3.46%
- ----------------------------------------------------------------
MSCI All Country World Index (unmanaged) +14.65% -0.75%
- ----------------------------------------------------------------
</Table>
(See "The Fund's Long-term Performance" for Index descriptions)
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting columbiamanagement.com or calling 800.345.6611.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the Fund's returns
would be lower. See the Average Annual Total Returns table for performance of
other share classes of the Fund.
The index does not reflect the effects of sales charges, expenses and taxes. It
is not possible to invest directly in an index.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT OCT. 31, 2010
SINCE
Without sales charge 1 YEAR INCEPTION
Class A (inception 8/1/08) +23.01% +3.46%
- ----------------------------------------------------------------
Class B (inception 8/1/08) +22.10% +2.66%
- ----------------------------------------------------------------
Class C (inception 8/1/08) +22.10% +2.71%
- ----------------------------------------------------------------
Class I (inception 8/1/08) +23.56% +3.84%
- ----------------------------------------------------------------
Class R* (inception 8/1/08) +22.65% +3.08%
- ----------------------------------------------------------------
Class R4 (inception 8/1/08) +23.09% +3.54%
- ----------------------------------------------------------------
With sales charge
Class A (inception 8/1/08) +15.93% +0.77%
- ----------------------------------------------------------------
Class B (inception 8/1/08) +17.10% +1.36%
- ----------------------------------------------------------------
Class C (inception 8/1/08) +21.10% +2.71%
- ----------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R and Class R4 shares. Class I, Class R
and Class R4 are available to qualifying institutional investors only.
* Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
- --------------------------------------------------------------------------------
4 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
MORNINGSTAR STYLE BOX(TM)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity Style
Value Blend Growth
X Large
Medium Size
Small
</Table>
The Morningstar Style Box(TM) is based on the fund's portfolio holdings as of
period end. The vertical axis shows the market capitalization of the stocks
owned, and the horizontal axis shows investment style (value, blend, or growth).
Information shown is based on the most recent data provided by Morningstar.
(C)2010 Morningstar, Inc. All rights reserved. The information contained herein
is proprietary to Morningstar and/or its content providers, may not be copied or
distributed and is not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no guarantee of
future results.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 5
MANAGER COMMENTARY -------------------------------------------------------------
Threadneedle Global Equity Income Fund portfolio managers Stephen Thornber and
Jeremy Podger of Threadneedle International Limited (Threadneedle) discuss the
Fund's results and positioning for the 12 months ended Oct. 31, 2010.
Threadneedle, an indirect wholly-owned subsidiary of Ameriprise Financial Inc.
is the subadviser to the Fund.
Dear Shareholders,
Threadneedle Global Equity Income Fund (the Fund) Class A shares gained 23.01%
(excluding sales charge) for the 12 months ended Oct. 31, 2010. The Fund
outperformed its benchmark, the Morgan Stanley Capital International (MSCI) All
Country World Index (MSCI Index), which advanced 14.65% for the 12-month period.
COUNTRY BREAKDOWN(1) (at Oct. 31, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Australia 5.0%
- ------------------------------------------------
Brazil 2.8%
- ------------------------------------------------
Canada 4.0%
- ------------------------------------------------
Finland 4.3%
- ------------------------------------------------
France 4.8%
- ------------------------------------------------
Germany 3.1%
- ------------------------------------------------
Greece 0.5%
- ------------------------------------------------
Hong Kong 2.7%
- ------------------------------------------------
Indonesia 0.9%
- ------------------------------------------------
Italy 3.0%
- ------------------------------------------------
Malaysia 0.3%
- ------------------------------------------------
Mexico 1.0%
- ------------------------------------------------
Poland 0.8%
- ------------------------------------------------
Singapore 4.1%
- ------------------------------------------------
South Africa 2.0%
- ------------------------------------------------
South Korea 3.1%
- ------------------------------------------------
Spain 1.1%
- ------------------------------------------------
Sweden 1.1%
- ------------------------------------------------
Taiwan 6.7%
- ------------------------------------------------
United Kingdom 18.4%
- ------------------------------------------------
United States 28.4%
- ------------------------------------------------
Other(2) 1.9%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
- --------------------------------------------------------------------------------
6 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SIGNIFICANT PERFORMANCE FACTORS
The past fiscal year played out much as we expected it to. The global economy
exhibited two speeds. Growth in developed countries was subdued and fragile,
with investors shifting between optimism and pessimism and rotating among
industry sectors. On the other hand, emerging markets showed strong consumer
spending and economic growth, which drove those stock markets, as well as
companies in developed markets that do business in emerging regions.
Though economic data in developed markets have been broadly favorable, results
have been variable, with both positive and negative reports causing volatility
in equity markets.
The Fund significantly outperformed the MSCI Index, primarily due to effective
stock selection.
TOP TEN HOLDINGS(1) (at Oct. 31, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
BP Prudhoe Bay Royalty Trust (United
States) 2.2%
- -------------------------------------------
Vodafone Group PLC (United Kingdom) 2.1%
- -------------------------------------------
Talvivaara Mining Co. PLC 2013 5.250%
(Finland) 2.1%
- -------------------------------------------
HTC Corp. (Taiwan) 2.0%
- -------------------------------------------
Pearson PLC (United Kingdom) 1.9%
- -------------------------------------------
Chunghwa Telecom Co., Ltd., ADR
(Taiwan) 1.9%
- -------------------------------------------
Admiral Group PLC (United Kingdom) 1.8%
- -------------------------------------------
Baytex Energy Trust Unit (Canada) 1.8%
- -------------------------------------------
Linn Energy LLC Unit (United States) 1.8%
- -------------------------------------------
France Telecom SA (France) 1.7%
- -------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
The Fund significantly outperformed the MSCI Index, primarily due to effective
stock selection.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 7
MANAGER COMMENTARY (continued) -------------------------------------------------
Exposure to Latin America and Asia also had a positive effect on relative
performance. Furthermore, the Fund had a smaller allocation to Japan than the
MSCI Index. This was advantageous as Japanese equities continued to perform
poorly, reflecting the fact that investors looking for growth and confidence are
not finding either in Japan.
Positioning in the financials sector had the largest positive effect on results
relative to the MSCI Index. The Fund's allocation to financials, particularly
banks, was smaller than the MSCI Index. Many banks are focused on improving
their balance sheets and have cut or eliminated dividends. That leaves few banks
that meet the Fund's demand for income. The underweight in banks was a notable
advantage for the fiscal year.
Within the financials sector, individual contributors included ADMIRAL GROUP and
BLUEBAY ASSET MANAGEMENT. ADMIRAL GROUP, a U.K. online car insurance company,
benefited from a more favorable pricing environment in the U.K. The company has
been gaining market share from its competitors due to its superior online
platform and has expanded into other European markets, as well as Virginia in
the U.S. The company's share price benefited from its stronger profits. BlueBay
Asset Management is a U.K. fixed income investment company that pays out most of
its earnings in dividends. We bought the company for its high dividend income
and because it was rapidly growing its assets under management. Toward the end
of the year, the company received a takeover offer that drove the stock price
higher.
The materials and energy sectors were also areas of strength for the Fund.
Within materials, the Fund benefited from its commodity exposure, particularly
mining. Emerging markets continue to exhibit voracious demand for commodities
across the spectrum. Stock selection was largely responsible for the positive
contribution from materials, though a small overweight was also advantageous.
Individual contributors in the materials sector included SOUTHERN COPPER, a U.S.
company that mines in Mexico and benefited from rising commodity prices, and
COAL AND ALLIED INDUSTRIES, an Australian coal company. Another contributor,
MASABI TRUST, controls the rights to an iron ore mine. This year iron prices
moved to a quarterly price valuation, so prices changed more frequently
- --------------------------------------------------------------------------------
8 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
and, during this time, the price trend was upward, adding to iron companies'
revenue.
Positioning in the information technology also had a positive effect.
Information technology is typically not an income producing industry so the Fund
tends to have less exposure than the MSCI Index. This underweight was an
advantage and stock selection within the sector was also especially strong. HTC,
a Taiwanese cell phone handset manufacturer, benefited from the successful
introduction of a new cell phone series using Google's Android platform. HTC's
profits have come through strongly and its share price rose in response. DELTA
ELECTRONICS, a Korean technology company, was another contributor.
Stock selection in consumer staples added to relative return and within the
consumer discretionary segment, NATURA COSMETICOS, a Brazilian cosmetics
company, was an individual contributor. The company benefited from economic
growth in Brazil and stronger demand for its products. Profits beat
expectations, leading the shares to perform well.
In all regions except the U.K., the Fund's results surpassed those of the MSCI
Index; the Fund's return in the U.K. was flat relative to the benchmark.
The consumer discretionary sector was an area of weakness for the Fund. The
sector does not offer much in the way of income, so the Fund's weighting is
typically smaller than that of the MSCI Index. This was a disadvantage given the
sector's strong performance during the fiscal year. Individual detractors from
relative return included BP and DIAMOND OFFSHORE, two energy companies that
suffered in the wake of the oil spill in the Gulf of Mexico. Once BP cut its
dividend, we sold the Fund's holdings because we invest for income rather than
capital appreciation.
CHANGES TO THE FUND'S PORTFOLIO
Our strategy for managing the Fund changed little over the period. The Fund's
positioning remains broadly defensive. However, as we saw evidence of economic
recovery and strength in emerging regions, we added to the Fund's holdings in
the emerging markets, in Asia and in the mining sector. The Fund entered its
fiscal year with an underweight in mining and by year end, had moved to an
overweight. This resulted partly
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 9
MANAGER COMMENTARY (continued) -------------------------------------------------
from the industry's strong performance and partly from our deliberate additions
to the sector.
We also added to the Fund's holdings in North America, while reducing exposure
in the U.K. and Europe.
In addition to mining, we increased the Fund's exposure to utilities. We reduced
the technology and health care weightings, all the result of individual stock
selection rather than betting for or against specific sectors. We also increased
exposure to financials, which had initially been a significant underweight and
by year end was about the same weight as the MSCI Index. We still have a strong
bias toward insurance and real estate stocks, with a significant underweight in
banks.
OUR FUTURE STRATEGY
The Fund's weightings in Europe and Asia are larger than those of the MSCI
Index. In both regions, we are focusing on high quality companies that offer
income generation and growth potential. Particularly in Asia (other than Japan)
we anticipate superior economic growth. The Fund has smaller weightings in Japan
and North America, partly because companies in those areas pay lower dividends.
The portfolio's weightings in telecommunications, consumer staples and utilities
are larger than the respective sectors in the MSCI Index. We are seeing strong
balance sheets, stable earnings, and attractive valuations in those areas. As
noted above, we moved the Fund to an overweight in mining to capitalize on
rising commodity prices and we believe there is still room for prices to go
higher.
Also, as noted above, the Fund remains underweight in the banks and we see no
reason to change that strategy at this time. Though we are always on the lookout
for good opportunities in the information technology sector, the Fund remains
underweight there due to the sector's emphasis on growth over dividend payments.
Our current outlook for the developed economies is cautious; we are not
expecting much in the way of economic growth due to the hangover from the
financial crisis. Thus, we anticipate a continuation of this past year, with a
two-tiered global economy. We see developed markets staying on the recovery
track, but still potentially fragile. Governments face a
- --------------------------------------------------------------------------------
10 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
tightrope walk as they balance support for economic growth with the pressure of
rising budget deficits. We are still confident that emerging markets, including
China, India and Brazil, can deliver substantial growth, so they remain
attractive areas for investment.
Corporate profits have recovered strongly, mainly due to aggressive cost cutting
and effective inventory management. Unfortunately, we are not yet seeing end
demand increase and we wonder how much profits can increase without strong end
demand. Though there are reasons to be concerned about equity markets, we think
those concerns are already reflected in stock prices. The reality is that
emerging markets look attractive and their stocks prices reflect it just as
developed markets face certain obstacles and their prices reflect that. In
short, we are currently optimistic because equity valuations remain attractive
to us.
<Table>
Stephen Thornber Jeremy Podger
Portfolio Manager Deputy Portfolio Manager
</Table>
Any specific securities mentioned are for illustrative purposes only and are not
a complete list of securities that have increased or decreased in value. The
views expressed in this statement reflect those of the portfolio manager(s) only
through the end of the period of the report as stated on the cover and do not
necessarily represent the views of Columbia Management Investment Advisers, LLC*
(the Investment Manager) or any subadviser to the Fund or any other person in
the Investment Manager or subadviser organizations. Any such views are subject
to change at any time based upon market or other conditions and the Investment
Manager disclaims any responsibility to update such views. These views may not
be relied on as investment advice and, because investment decisions for the Fund
are based on numerous factors, may not be relied on as an indication of trading
intent on behalf of the Fund.
* Effective May 1, 2010, RiverSource Investments, LLC became known as Columbia
Management Investment Advisers, LLC.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 11
THE FUND'S LONG-TERM PERFORMANCE -----------------------------------------------
The chart on the facing page illustrates the total value of an assumed $10,000
investment in Threadneedle Global Equity Income Fund Class A shares (from 8/1/08
to 10/31/10) as compared to the performance of the Morgan Stanley Capital
International (MSCI) All Country World Index. In comparing the Fund's Class A
shares to this index, you should take into account the fact that the Fund's
performance reflects the maximum initial sales charge of 5.75%, while such
charges are not reflected in the performance of the index. Returns for the Fund
include the reinvestment of any distributions paid during each period.
The performance information shown represents past performance and is not a
guarantee of future results. The table below and the chart on the facing page do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. The investment return and
principal value of your investment will fluctuate so that your shares, when
redeemed, may be worth more or less than their original cost. Current
performance may be lower or higher than the performance information shown. You
may obtain performance information current to the most recent month-end by
contacting your financial intermediary or visiting columbiamanagement.com. Also
see "Past Performance" in the Fund's current prospectus.
COMPARATIVE RESULTS
- --------------------------------------------------------------------------------
<Table>
<Caption>
Results at Oct. 31, 2010
SINCE
INCEPTION
1 YEAR 8/1/08
THREADNEEDLE GLOBAL EQUITY INCOME FUND
(INCLUDES SALES CHARGE)
Class A Cumulative value of $10,000 $11,593 $10,175
- -----------------------------------------------------------------------
Average annual total return +15.93% +0.77%
- -----------------------------------------------------------------------
MSCI ALL COUNTRY WORLD INDEX(1)
Cumulative value of $10,000 $11,465 $9,833
- -----------------------------------------------------------------------
Average annual total return +14.65% -0.75%
- -----------------------------------------------------------------------
</Table>
Results for other share classes can be found on page 4.
- --------------------------------------------------------------------------------
12 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
(VALUE OF A HYPOTHETICAL $10,000 INVESTMENT IN THREADNEEDLE GLOBAL EQUITY INCOME
FUND LINE GRAPH)
<Table>
<Caption>
THREADNEEDLE GLOBAL
EQUITY INCOME
FUND CLASS MSCI ALL
A (INCLUDES COUNTRY WORLD
SALES CHARGE) INDEX(1)
------------------- -------------
8/1/08 $ 9,425 $10,000
10/08 6,878 6,949
1/09 6,062 6,162
4/09 6,430 6,740
7/09 7,711 8,034
10/09 8,256 8,576
1/10 8,415 8,728
4/10 8,892 9,437
7/10 8,906 8,967
10/10 10,175 9,833
</Table>
(1) The Morgan Stanley Capital International (MSCI) All Country World Index, an
unmanaged index of equity securities, is designed to measure equity market
performance in the global developed and emerging markets. The index reflects
reinvestment of all distributions and changes in market prices. The Fund's
performance is currently measured against this index for purposes of
determining the performance incentive adjustment.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 13
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period indicated and held until Oct. 31, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
14 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
MAY 1, 2010 OCT. 31, 2010 THE PERIOD(a) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,142.00 $ 7.48 1.40%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.95 $ 7.04 1.40%
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,137.60 $11.40(c) 2.14%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.26 $10.75(c) 2.14%(c)
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,138.60 $11.52(c) 2.16%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.16 $10.85(c) 2.16%(c)
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,145.20 $ 5.40(c) 1.01%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.90 $ 5.09(c) 1.01%(c)
- ------------------------------------------------------------------------------------------
Class R
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,141.00 $ 9.39(c) 1.76%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.16 $ 8.85(c) 1.76%(c)
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $1,142.40 $ 7.32(c) 1.37%(c)
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.10 $ 6.89(c) 1.37%(c)
- ------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 182/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended Oct. 31, 2010: +14.20%
for Class A, +13.76% for Class B, +13.86% for Class C, +14.52% for Class I,
+14.10% for Class R and +14.24% for Class R4.
(c) Columbia Management Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC) (the Investment Manager) and its affiliates have
contractually agreed to waive certain fees and to absorb certain expenses
until Dec. 31, 2011, unless sooner terminated at the sole discretion of the
Fund's Board, such that net expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 2.20% for Class B, 2.20% for Class C, 1.03% for
Class I, 1.70% for Class R and 1.33% for Class R4. Any amounts waived will
not be reimbursed by the Fund. This change is effective Jan. 1, 2011. Had
this change been in place for the entire six month period ended Oct. 31,
2010, the actual expenses paid would have been $11.30 for Class B, $11.46
for Class C, $5.24 for Class I, $8.81 for Class R and $7.16 for Class R4;
the hypothetical expenses paid would have been $10.65 for Class B, $10.80
for Class C, $4.94 for Class I, $8.30 for Class R and $6.74 for Class R4.
The actual and hypothetical expenses paid for Class A would have been the
same as those expenses presented in the table above.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
OCT. 31, 2010
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (94.7%)(c)
ISSUER SHARES VALUE(a)
AUSTRALIA (5.0%)
Coal & Allied Industries Ltd. 3,797(d) $416,546
Coca-Cola Amatil Ltd. 33,700(d) 401,722
Foster's Group Ltd. 63,159 361,287
National Australia Bank Ltd. 13,837 345,068
Telstra Corp., Ltd. 115,737 302,683
---------------
Total 1,827,306
- -------------------------------------------------------------------------------------
BRAZIL (1.2%)
Multiplus SA 18,037 302,599
Redecard SA 11,500 148,861
---------------
Total 451,460
- -------------------------------------------------------------------------------------
CANADA (4.0%)
AGF Management Ltd., Class B 24,700 401,293
Baytex Energy Trust Unit 17,357 648,458
Crescent Point Energy Corp. 11,058(d) 438,026
---------------
Total 1,487,777
- -------------------------------------------------------------------------------------
FINLAND (2.3%)
Fortum OYJ 9,826 278,477
Sampo OYJ, Series A 19,704 551,848
---------------
Total 830,325
- -------------------------------------------------------------------------------------
FRANCE (4.8%)
France Telecom SA 26,425 634,750
Sanofi-Aventis SA 3,840 268,091
Total SA 5,900 320,508
Vivendi SA 19,091 544,374
---------------
Total 1,767,723
- -------------------------------------------------------------------------------------
GERMANY (3.2%)
Allianz SE 1,327 166,237
BASF SE 7,810 568,077
Deutsche Telekom AG 13,917 201,566
E.ON AG 7,177 224,671
---------------
Total 1,160,551
- -------------------------------------------------------------------------------------
GREECE (0.5%)
OPAP SA 10,223 192,725
- -------------------------------------------------------------------------------------
HONG KONG (2.7%)
Champion REIT 1,143,000(d) 629,675
Hang Seng Bank Ltd. 24,300 355,518
---------------
Total 985,193
- -------------------------------------------------------------------------------------
INDONESIA (0.9%)
Perusahaan Gas Negara Tbk 722,500 327,490
- -------------------------------------------------------------------------------------
ITALY (3.0%)
ENI SpA 12,916 290,935
Snam Rete Gas SpA 62,397 337,920
Telecom Italia SpA 136,667 209,540
Tod's SpA 2,917(d) 282,750
---------------
Total 1,121,145
- -------------------------------------------------------------------------------------
MALAYSIA (0.3%)
Maxis Bhd 71,000 120,768
- -------------------------------------------------------------------------------------
MEXICO (1.0%)
Grupo Continental SAB de CV 124,300 350,345
- -------------------------------------------------------------------------------------
POLAND (0.8%)
KGHM Polska Miedz SA 6,201 278,657
- -------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
16 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SINGAPORE (4.1%)
Ascendas Real Estate Investment Trust 203,000 $323,193
DBS Group Holdings Ltd. 55,500 596,220
Mapletree Industrial Trust 431,000(b) 356,419
StarHub Ltd. 116,000 237,576
---------------
Total 1,513,408
- -------------------------------------------------------------------------------------
SOUTH AFRICA (2.0%)
Kumba Iron Ore Ltd. 7,780 442,494
The Foschini Group Ltd. 24,077 292,562
---------------
Total 735,056
- -------------------------------------------------------------------------------------
SOUTH KOREA (3.1%)
Kangwon Land, Inc. 21,440 504,043
KT Corp., ADR 13,454 278,363
KT&G Corp. 6,014 369,367
---------------
Total 1,151,773
- -------------------------------------------------------------------------------------
SPAIN (1.1%)
Banco Santander SA 31,416 403,479
- -------------------------------------------------------------------------------------
SWEDEN (1.1%)
Skanska AB, Series B 20,313 388,611
- -------------------------------------------------------------------------------------
TAIWAN (6.8%)
Chunghwa Telecom Co., Ltd., ADR 28,946 677,336
Delta Electronics, Inc. 104,040 429,861
HTC Corp. 32,900 742,525
Hung Poo Real Estate Development Corp. 227,000 337,716
Taiwan Semiconductor Manufacturing Co., Ltd. 144,000 295,365
---------------
Total 2,482,803
- -------------------------------------------------------------------------------------
UNITED KINGDOM (18.4%)
Admiral Group PLC 25,892 676,191
AstraZeneca PLC 8,386 420,481
BAE Systems PLC 69,961 386,379
BlueBay Asset Management PLC 50,470 395,016
British American Tobacco PLC 12,648 482,298
Close Brothers Group PLC 18,595 229,852
GlaxoSmithKline PLC 19,626 383,941
Man Group PLC 107,696 450,012
National Grid PLC 43,612 412,264
Pearson PLC 44,473 680,126
Royal Dutch Shell PLC, Series B 15,057 482,125
RSA Insurance Group PLC 153,231 321,614
United Utilities Group PLC 28,475 278,754
Vodafone Group PLC 285,388 776,637
Wincanton PLC 106,124 404,676
---------------
Total 6,780,366
- -------------------------------------------------------------------------------------
UNITED STATES (28.4%)
AllianceBernstein Holding LP 12,957 316,151
Altria Group, Inc. 24,504 622,891
Annaly Capital Management, Inc. 21,186 375,204
AT&T, Inc. 13,937 397,205
Blackstone Group LP 27,544 371,293
BP Prudhoe Bay Royalty Trust 7,827 804,693
Bristol-Myers Squibb Co. 22,069 593,656
CenturyLink, Inc. 12,462 515,678
Enterprise Products Partners LP 8,408 360,283
Foot Locker, Inc. 18,306 291,615
Frontier Communications Corp. 22,067 193,748
Kinder Morgan Energy Partners LP 8,329 578,616
Linn Energy LLC Unit 18,478 646,360
Merck & Co., Inc. 16,381 594,302
Mesabi Trust 12,246 507,352
Penn Virginia Resource Partners LP 14,768 397,998
Pfizer, Inc. 18,214 316,924
Philip Morris International, Inc. 8,405 491,693
Plum Creek Timber Co., Inc. 8,501 313,177
Qwest Communications International, Inc. 48,681 321,295
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
UNITED STATES (CONT.)
Reynolds American, Inc. 6,741 $437,491
Southern Co. 10,182 385,592
Southern Copper Corp. 9,587 410,323
Verizon Communications, Inc. 6,475 210,243
---------------
Total 10,453,783
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $27,607,518) $34,810,744
- -------------------------------------------------------------------------------------
<Caption>
PREFERRED STOCKS (1.5%)(c)
ISSUER SHARES VALUE(a)
BRAZIL
Cia de Bebidas das Americas 4,123 $565,541
- -------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost: $212,654) $565,541
- -------------------------------------------------------------------------------------
<Caption>
RIGHTS (--%)(c)
ISSUER SHARES VALUE(a)
SPAIN
Banco Santander SA 31,416(b) $5,201
- -------------------------------------------------------------------------------------
TOTAL RIGHTS
(Cost: $--) $5,201
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (2.1%)(c)
COUPON PRINCIPAL
ISSUER RATE AMOUNT VALUE(a)
FINLAND (2.1%)
Talvivaara Mining Co. PLC
(EUR) Senior Unsecured Convertible
05-20-13 5.250% $500,000 $768,694
- -------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $362,934) $768,694
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (1.9%)
SHARES VALUE(a)
Columbia Short-Term Cash Fund, 0.241% 694,979(f) $694,979
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $694,979) $694,979
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (3.3%)
EFFECTIVE PRINCIPAL
ISSUER YIELD AMOUNT VALUE(a)
REPURCHASE AGREEMENTS(E)
Deutsche Bank AG
dated 10-29-10, matures 11-01-10,
repurchase price
$1,229,232 0.230% $1,229,208 $1,229,208
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $1,229,208) $1,229,208
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $30,107,293)(g) $38,074,367
=====================================================================================
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
18 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of net assets at Oct. 31, 2010:
<Table>
<Caption>
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE(a)
- -----------------------------------------------------------------------
Aerospace & Defense 1.1% $386,379
Air Freight & Logistics 1.1 404,676
Beverages 3.0 1,113,354
Capital Markets 5.9 2,163,617
Chemicals 1.5 568,077
Commercial Banks 4.6 1,705,486
Commercial Services & Supplies 0.8 302,599
Communications Equipment 2.0 742,525
Construction & Engineering 1.1 388,611
Diversified Telecommunication Services 10.7 3,942,407
Electric Utilities 2.4 888,740
Electronic Equipment, Instruments &
Components 1.2 429,861
Food and Beverage 1.5 565,541
Gas Utilities 1.8 665,410
Hotels, Restaurants & Leisure 1.9 696,768
Insurance 4.7 1,715,890
IT Services 0.4 148,861
Media 3.3 1,224,500
Metals 2.1 768,694
Metals & Mining 4.5 1,638,826
Multi-Utilities 1.9 691,018
Oil, Gas & Consumable Fuels 14.7 5,384,548
Pharmaceuticals 7.0 2,577,395
Real Estate Investment Trusts (REITs) 5.4 1,997,668
Real Estate Management & Development 0.9 337,716
Semiconductors & Semiconductor Equipment 0.8 295,365
Specialty Retail 1.6 584,177
Textiles, Apparel & Luxury Goods 0.8 282,750
Tobacco 6.6 2,403,740
Wireless Telecommunication Services 3.1 1,134,981
Other(1) 5.2 1,924,187
- -----------------------------------------------------------------------
Total $38,074,367
- -----------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
<Table>
ADR -- American Depositary Receipt
EUR -- European Monetary Unit
</Table>
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in U.S. dollar currency unless otherwise
noted.
(d) At Oct. 31, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian and, pursuant to the
terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. The value of securities and/or cash held as collateral for
repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
<Table>
<Caption>
DEUTSCHE BANK AG (0.230%)
SECURITY DESCRIPTION VALUE(a)
------------------------------------------------------------
Fannie Mae Pool $1,253,792
------------------------------------------------------------
Total market value of collateral securities $1,253,792
------------------------------------------------------------
</Table>
(f) Affiliated Money Market Fund - See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at Oct. 31, 2010.
(g) At Oct. 31, 2010, the cost of securities for federal income tax purposes
was $30,508,314 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
Unrealized appreciation $7,779,050
Unrealized depreciation (212,997)
-----------------------------------------------------------
Net unrealized appreciation $7,566,053
-----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
20 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date
(to include NAV for open-end mutual funds). Valuation adjustments are not
applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 21
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Level 3 investments due to lack of market transparency and corroboration to
support these quoted prices. Additionally, valuation models may be used as the
pricing source for any remaining investments classified as Level 3. These models
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in valuations may include,
but are not limited to, financial statement analysis, capital account balances,
discount rates and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of Oct. 31, 2010:
<Table>
<Caption>
FAIR VALUE AT OCT. 31, 2010
-----------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS(B) INPUTS INPUTS TOTAL
- ----------------------------------------------------------------------------------------------
Equity Securities
Common Stocks $34,810,744 $-- $-- $34,810,744
Preferred Stocks 565,541 -- -- 565,541
Rights 5,201 -- -- 5,201
- ----------------------------------------------------------------------------------------------
Total Equity Securities 35,381,486 -- -- 35,381,486
- ----------------------------------------------------------------------------------------------
Bonds
Corporate Debt
Securities
Metals -- -- 768,694 768,694
- ----------------------------------------------------------------------------------------------
Total Bonds -- -- 768,694 768,694
- ----------------------------------------------------------------------------------------------
Other
Affiliated Money Market
Fund(c) 694,979 -- -- 694,979
Investments of Cash
Collateral Received
for Securities on
Loan -- 1,229,208 -- 1,229,208
- ----------------------------------------------------------------------------------------------
Total Other 694,979 1,229,208 -- 1,924,187
- ----------------------------------------------------------------------------------------------
Total $36,076,465 $1,229,208 $768,694 $38,074,367
- ----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) Includes certain securities trading outside the U.S. whose values were
adjusted at Oct. 31, 2009 as a result of significant market movements
following the close of local trading, and were classified as Level 2.
Values were not adjusted as of Oct. 31, 2010. Therefore, these investment
securities were classified as Level 1 instead of Level 2 at Oct. 31, 2010.
The amount of securities transferred out of Level 2 into Level 1 during the
period was $13,259,410. Transfers between Levels 1 and 2 are determined
based on the fair value at the beginning of the period for security
positions held throughout the period.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at Oct. 31, 2010.
- --------------------------------------------------------------------------------
22 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The following table is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value.
<Table>
<Caption>
CORPORATE
DEBT
SECURITIES
- ----------------------------------------------------------------
Balance as of Oct. 31, 2009 $618,029
Accrued discounts/premiums 67,674
Realized gain (loss) --
Change in unrealized appreciation
(depreciation)* 82,991
Sales --
Purchases --
Transfers into Level 3 --
Transfers out of Level 3 --
- ----------------------------------------------------------------
Balance as of Oct. 31, 2010 $768,694
- ----------------------------------------------------------------
</Table>
* Change in unrealized appreciation (depreciation) relating to securities
held at Oct. 31, 2010 was $82,991.
Transfers in and/or out of Level 3 are determined based on the fair value at the
beginning of the period for security positions held throughout the period.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.345.6611.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 23
STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------
OCT. 31, 2010
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $28,183,106) $36,150,180
Affiliated money market fund (identified cost $694,979) 694,979
Investments of cash collateral received for securities on loan
(identified cost $1,229,208) 1,229,208
- -------------------------------------------------------------------------------------
Total investments in securities (identified cost $30,107,293) 38,074,367
Foreign currency holdings (identified cost $115,696) 119,076
Receivable from Investment Manager 926
Capital shares receivable 53,174
Dividends and accrued interest receivable 136,437
Receivable from investment securities sold 455,180
- -------------------------------------------------------------------------------------
Total assets 38,839,160
- -------------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 218
Capital shares payable 46,842
Payable for investment securities purchased 735,045
Payable upon return of securities loaned 1,229,208
Accrued investment management services fees 804
Accrued distribution fees 273
Accrued transfer agency fees 695
Accrued administrative services fees 80
Other accrued expenses 72,812
- -------------------------------------------------------------------------------------
Total liabilities 2,085,977
- -------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $36,753,183
- -------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value $ 36,773
Additional paid-in capital 28,982,069
Undistributed net investment income 248,130
Accumulated net realized gain (loss) (486,152)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 7,972,363
- -------------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding capital stock $36,753,183
- -------------------------------------------------------------------------------------
*Value of securities on loan $ 1,156,881
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $29,056,833 2,907,285 $ 9.99(1)
Class B $ 1,875,577 188,131 $ 9.97
Class C $ 844,357 84,741 $ 9.96
Class I $ 4,935,451 493,000 $10.01
Class R $ 10,502 1,050 $10.00
Class R4 $ 30,463 3,046 $10.00
- -----------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $10.60. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
24 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
STATEMENT OF OPERATIONS -------------------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $1,710,989
Interest 140,316
Income distributions from affiliated money market fund 1,040
Income from securities lending -- net 36,397
Foreign taxes withheld (158,655)
- ------------------------------------------------------------------------
Total income 1,730,087
- ------------------------------------------------------------------------
Expenses:
Investment management services fees 235,459
Distribution fees
Class A 58,854
Class B 20,679
Class C 5,806
Class R 45
Class R3 18
Transfer agency fees
Class A 44,210
Class B 4,160
Class C 1,112
Class R 6
Class R3 4
Class R4 14
Class R5 4
Administrative services fees 24,462
Plan administration services fees
Class R 19
Class R3 18
Class R4 40
Compensation of board members 891
Custodian fees 11,620
Printing and postage 28,140
Registration fees 72,405
Professional fees 38,558
Other 8,702
- ------------------------------------------------------------------------
Total expenses 555,226
Expenses waived/reimbursed by the Investment Manager and
its affiliates (117,871)
- ------------------------------------------------------------------------
Total net expenses 437,355
- ------------------------------------------------------------------------
Investment income (loss) -- net 1,292,732
- ------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 25
STATEMENT OF OPERATIONS (continued) -------------------------------------------
YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $1,068,812
Foreign currency transactions 34,148
- ------------------------------------------------------------------------
Net realized gain (loss) on investments 1,102,960
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 4,238,399
- ------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies 5,341,359
- ------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $6,634,091
- ------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS -------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 1,292,732 $ 878,788
Net realized gain (loss) on investments 1,102,960 (1,378,960)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities
in foreign currencies 4,238,399 6,134,900
- --------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations 6,634,091 5,634,728
- --------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
Class A (1,039,349) (424,203)
Class B (75,807) (34,776)
Class C (21,124) (5,653)
Class I (210,743) (104,698)
Class R (367) (165)
Class R3 (289) (182)
Class R4 (671) (207)
Class R5 (321) (209)
- --------------------------------------------------------------------------------------
Total distributions (1,348,671) (570,093)
- --------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 7,486,858 15,276,944
Class B shares 451,125 1,551,236
Class C shares 326,736 352,555
Class R shares 425 --
Class R4 shares 15,002 8,500
Reinvestment of distributions at net asset value
Class A shares 985,504 416,219
Class B shares 73,906 34,203
Class C shares 19,873 5,149
Class R shares 8 --
Class R4 shares 269 11
Conversions from Class B to Class A
Class A shares 586,823 359,240
Class B shares (586,823) (359,240)
Payments for redemptions
Class A shares (5,206,085) (4,280,739)
Class B shares (427,591) (303,100)
Class C shares (60,046) (35,779)
Class R3 shares (9,998) --
Class R4 shares -- (7,133)
Class R5 shares (9,998) --
- --------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share
transactions 3,645,988 13,018,066
- --------------------------------------------------------------------------------------
Total increase (decrease) in net assets 8,931,408 18,082,701
Net assets at beginning of year 27,821,775 9,739,074
- --------------------------------------------------------------------------------------
Net assets at end of year $36,753,183 $27,821,775
- --------------------------------------------------------------------------------------
Undistributed net investment income $ 248,130 $ 281,180
- --------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 27
FINANCIAL HIGHLIGHTS ----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. Per share net investment income (loss)
amounts are calculated based on average shares outstanding during the period.
Total returns assume reinvestment of all dividends and distributions. Total
returns do not reflect payment of sales charges, if any, and are not annualized
for periods of less than one year.
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS A -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.49 $7.24 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .37 .30 .07
Net gains (losses) (both realized and
unrealized) 1.52 1.14 (2.77)
- ----------------------------------------------------------------------------------
Total from investment operations 1.89 1.44 (2.70)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.39) (.19) (.02)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.39) (.19) (.02)
- ----------------------------------------------------------------------------------
Net asset value, end of period $9.99 $8.49 $7.24
- ----------------------------------------------------------------------------------
TOTAL RETURN 23.01% 20.16% (27.12%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 1.82% 2.35% 4.71%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.42% 1.50% 1.45%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 4.24% 4.19% 3.78%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $29 $21 $5
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
28 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS B -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.47 $7.24 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .30 .26 .06
Net gains (losses) (both realized and
unrealized) 1.52 1.11 (2.76)
- ----------------------------------------------------------------------------------
Total from investment operations 1.82 1.37 (2.70)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.32) (.14) (.02)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.32) (.14) (.02)
- ----------------------------------------------------------------------------------
Net asset value, end of period $9.97 $8.47 $7.24
- ----------------------------------------------------------------------------------
TOTAL RETURN 22.10% 19.14% (27.15%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 2.53% 3.18% 5.48%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.17% 2.26% 2.21%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 3.45% 3.64% 3.11%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2 $2 $1
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS C -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.47 $7.24 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .31 .25 .07
Net gains (losses) (both realized and
unrealized) 1.51 1.13 (2.77)
- ----------------------------------------------------------------------------------
Total from investment operations 1.82 1.38 (2.70)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.33) (.15) (.02)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.33) (.15) (.02)
- ----------------------------------------------------------------------------------
Net asset value, end of period $9.96 $8.47 $7.24
- ----------------------------------------------------------------------------------
TOTAL RETURN 22.10% 19.21% (27.18%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 2.59% 3.05% 5.15%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.17% 2.25% 2.21%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 3.57% 3.44% 3.31%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
30 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS I -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.50 $7.25 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .41 .33 .09
Net gains (losses) (both realized and
unrealized) 1.53 1.13 (2.77)
- ----------------------------------------------------------------------------------
Total from investment operations 1.94 1.46 (2.68)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.43) (.21) (.03)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.43) (.21) (.03)
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.01 $8.50 $7.25
- ----------------------------------------------------------------------------------
TOTAL RETURN 23.56% 20.53% (27.00%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 1.37% 1.88% 4.12%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.03% 1.09% 1.07%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 4.61% 4.52% 3.95%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $5 $4 $4
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R* -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.49 $7.25 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .34 .27 .07
Net gains (losses) (both realized and
unrealized) 1.53 1.13 (2.77)
- ----------------------------------------------------------------------------------
Total from investment operations 1.87 1.40 (2.70)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.36) (.16) (.01)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.36) (.16) (.01)
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.00 $8.49 $7.25
- ----------------------------------------------------------------------------------
TOTAL RETURN 22.65% 19.63% (27.10%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 2.14% 2.68% 4.92%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.80% 1.83% 1.72%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 3.85% 3.78% 3.36%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
32 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
YEAR ENDED OCT. 31,
CLASS R4 -------------------------------
PER SHARE DATA 2010 2009 2008(a)
Net asset value, beginning of period $8.50 $7.25 $9.96
- ----------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .39 .28 .08
Net gains (losses) (both realized and
unrealized) 1.51 1.17 (2.77)
- ----------------------------------------------------------------------------------
Total from investment operations 1.90 1.45 (2.69)
- ----------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.40) (.20) (.02)
Tax return of capital -- -- (.00)(b)
- ----------------------------------------------------------------------------------
Total distributions (.40) (.20) (.02)
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.00 $8.50 $7.25
- ----------------------------------------------------------------------------------
TOTAL RETURN 23.09% 20.26% (27.04%)
- ----------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 1.82% 2.20% 4.42%(d)
- ----------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.37% 1.33% 1.24%(d)
- ----------------------------------------------------------------------------------
Net investment income (loss) 4.44% 4.02% 3.89%(d)
- ----------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $--
- ----------------------------------------------------------------------------------
Portfolio turnover rate 35% 45% 10%
- ----------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
* Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
(a) For the period from Aug. 1, 2008 (when shares became available) to Oct. 31,
2008.
(b) Rounds to zero less than $0.01 per share.
(c) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the reported expense ratios.
(d) Annualized.
(e) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds), before
giving effect to any performance incentive adjustment.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
1. ORGANIZATION
Threadneedle Global Equity Income Fund (the Fund) is a series of RiverSource
Global Series, Inc. (the Corporation) and is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as a diversified, open-end
management investment company. The Corporation has 10 billion authorized shares
of capital stock that can be allocated among the separate series as designated
by the Corporation's Board of Directors (the Board).
The Fund offers Class A, Class B, Class C, Class I, Class R and Class R4 shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund no longer
accepts investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, RiverSource, Seligman and Threadneedle funds
offering such shares.
- - Class C shares may be subject to a CDSC on shares redeemed within one year of
purchase.
- - Class I shares are not subject to sales charges and are available only to the
Columbia Family of Funds.
- - Class R shares are offered without a front-end sales charge or CDSC to
qualifying institutional investors. Effective Sept. 7, 2010, Class R2 shares
were renamed Class R shares.
- - Class R4 shares are not subject to sales charges, however, this class is
closed to new investors effective Dec. 31, 2010.
At Aug. 27, 2010, all Class R3 and Class R5 shares were liquidated. The shares
in these classes had consisted solely of seed capital from Columbia Management
Investment Advisers, LLC (formerly known as RiverSource Investments, LLC) (the
Investment Manager).
- --------------------------------------------------------------------------------
34 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
At Oct. 31, 2010, the Investment Manager owned 100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Board generally contemplate the use of
fair valuation in the event that price quotations or valuations are not readily
available, price quotations or valuations from other sources are not reflective
of market value and thus deemed unreliable, or a significant event has occurred
in relation to a security or class of securities (such as foreign securities)
that is not reflected in price quotations or valuations from other sources. A
fair value price is a good faith estimate of the value of a security at a given
point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
Manager, as administrator to the Fund, will fair value foreign securities
pursuant to procedures adopted by the Board, including utilizing a third party
pricing service to determine these fair values. These procedures take into
account multiple factors, including movements in the U.S. securities markets, to
determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the NYSE. The fair value of a security is likely
to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes. At Oct. 31, 2010, foreign currency holdings consisted of
multiple denominations.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
- --------------------------------------------------------------------------------
36 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
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 Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income, declared and paid each calendar quarter,
when available, are reinvested in additional shares of the Fund at net asset
value or payable in cash. Capital gains, when available, are normally
distributed along with the last income dividend of the calendar year.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including amortization of premium, market discount and original issue
discount using the effective interest method, is accrued daily.
3. DERIVATIVE INSTRUMENTS
The Fund invests in certain derivative instruments as detailed below to meet its
investment objectives. Derivatives are instruments whose values depend on, or
are derived from, in whole or in part, the value of one or more other assets,
such as securities, currencies, commodities or indices. Derivative instruments
may be used to maintain cash reserves while maintaining exposure to certain
other assets, to offset anticipated declines in values of investments, to
facilitate trading, to reduce transaction costs and to pursue higher investment
returns. The Fund may
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
also use derivative instruments to mitigate certain investment risks, such as
foreign currency exchange rate risk, interest rate risk and credit risk.
Derivatives may involve various risks, including the potential inability of the
counterparty to fulfill its obligation under the terms of the contract, the
potential for an illiquid secondary market and the potential for market
movements which may expose the Fund to gains or losses in excess of the amount
shown in the Statement of Assets and Liabilities.
The Fund and any counterparty are required to maintain an agreement that
requires the Fund and that counterparty to monitor (on a daily basis) the net
fair value of all derivatives entered into pursuant to the contract between the
Fund and such counterparty. If the net fair value of such derivatives between
the Fund and that counterparty exceeds a certain threshold (as defined in the
agreement), the Fund or the counterparty (as the case may be) is required to
post cash and/or securities as collateral. Fair values of derivatives presented
in the financial statements are not netted with the fair value of other
derivatives or with any collateral amounts posted by the Fund or any
counterparty.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements between two parties
to buy and sell a currency at a set price on a future date. These contracts are
intended to be used to minimize the exposure to foreign exchange rate
fluctuations during the period between the trade and settlement dates of the
contract. The Fund utilized forward foreign currency exchange contracts to hedge
the currency exposure associated with some or all of the Fund's securities.
The market values of forward foreign currency exchange contracts fluctuate with
changes in foreign currency exchange rates. The Fund will record a realized gain
or loss when the forward foreign currency exchange contract is closed.
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. The risks of
forward foreign currency contracts include movement in the values of the foreign
currencies relative to the U.S. dollar (or other foreign currencies) and the
possibility that counterparties will not complete their contractual obligations,
which may be in excess of the amount reflected, if any, in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the
- --------------------------------------------------------------------------------
38 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
Fund's operations over the period including realized gains or losses and
unrealized gains or losses. The derivative schedules following the Portfolio of
Investments present additional information regarding derivative instruments
outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT OCT. 31, 2010
At Oct. 31, 2010, the Fund had no outstanding derivatives.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCT. 31, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $9,604
- --------------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
IN INCOME
- --------------------------------------------------------------------------
FORWARD FOREIGN
RISK EXPOSURE CATEGORY CURRENCY EXCHANGE CONTRACTS
- --------------------------------------------------------------------------
Foreign exchange contracts $--
- --------------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
At Oct. 31, 2010 the Fund had no outstanding forward foreign currency exchange
contracts. The average gross notional amount of forward foreign currency
exchange contracts opened, and subsequently closed, was $143,000 for the year
ended Oct. 31, 2010.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager is
responsible for the management of the Fund. Day-to-day portfolio management of
the Fund is provided by the Fund's subadviser. See Subadvisory agreement below.
The management fee is an annual fee that is equal to a percentage of the Fund's
average daily net assets that declines from 0.80% to 0.57% as the Fund's net
assets increase. The fee may be adjusted upward or downward by a performance
incentive adjustment determined monthly by measuring the percentage difference
over a rolling 12-month period between the annualized performance of one Class A
share of the Fund and the annualized performance of the MSCI All Country World
Index. In certain circumstances, the Board may approve a change in the index.
The maximum adjustment is 0.12% per year. If the performance difference is less
than 0.50%, the adjustment will be zero. The
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
adjustment decreased the management fee by $9,164 for the year ended Oct. 31,
2010. The management fee for the year ended Oct. 31, 2010 was 0.77% of the
Fund's average daily net assets, including the adjustment under the terms of the
performance incentive arrangement.
SUBADVISORY AGREEMENT
The Investment Manager has a Subadvisory Agreement with Threadneedle
International Limited (Threadneedle), an affiliate of the Investment Manager and
an indirect wholly-owned subsidiary of Ameriprise Financial, to subadvise the
assets of the Fund. The Investment Manager contracts with and compensates
Threadneedle to manage the investment of the Fund's assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.08% to 0.05% as the
Fund's net assets increase. The fee for the year ended Oct. 31, 2010 was 0.08%
of the Fund's average daily net assets.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the year ended Oct. 31,
2010, other expenses paid to this company were $44.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund as defined under the 1940 Act may defer receipt
of their compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the Fund or certain other funds managed
by the Investment Manager. The Fund's liability for these amounts is adjusted
for market value changes and remains in the Fund until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent) is
responsible for providing transfer agency services to the Fund.
Prior to Sept. 7, 2010, the Transfer Agent received annual account-based service
fees from Class A, Class B and Class C shares that varied by class and annual
asset-based service fees based on the Fund's average daily net assets
attributable
- --------------------------------------------------------------------------------
40 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
to Class R and Class R4 shares. In addition, the Transfer Agent charged an
annual fee per inactive account and received reimbursement from the Fund for
certain out-of-pocket expenses.
Under a new Transfer Agency Agreement effective Sept. 7, 2010, the Transfer
Agent has contracted with Boston Financial Data Services ("BFDS") to serve as
sub-transfer agent. The Transfer Agent receives monthly account-based service
fees based on the number of open accounts and is reimbursed by the Fund for the
fees and expenses the Transfer Agent pays to financial intermediaries that
maintain omnibus accounts with the Fund subject to an annual limitation (that
varies by class) that is a percentage of the average aggregate value of the
Fund's shares maintained in each such omnibus account (other than omnibus
accounts for which American Enterprise Investment Services, Inc. is the broker
of record or accounts where the beneficial shareholder is a customer of
Ameriprise Financial Services, Inc., which are paid a per account fee). The
Transfer Agent pays the fees of BFDS for services as sub-transfer agent and is
not entitled to reimbursement for such fees from the Fund.
The Transfer Agent also receives reimbursement for certain out-of-pocket
expenses and may also retain, as additional compensation for its services, fees
for wire, telephone and redemption orders, Individual Retirement Account ("IRA")
trustee agent fees and account transcript fees due to the Transfer Agent from
shareholders of the Fund and credits (net of bank charges) earned with respect
to balances in accounts the Transfer Agent maintains in connection with its
services to the Fund.
For the year ended Oct. 31, 2010, the Fund's effective transfer agent fee rates
as a percentage of average daily net assets of each class were as follows:
<Table>
Class A.............................................. 0.19%
Class B.............................................. 0.20
Class C.............................................. 0.19
Class R.............................................. 0.07
Class R4............................................. 0.09
</Table>
Class I shares do not pay transfer agent fees.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R4 shares for the provision of various administrative,
recordkeeping, communication and educational services. Prior to Sept. 7, 2010,
the Fund also paid an annual fee at a rate of 0.25% of the Fund's average daily
net assets attributable to Class R shares for such services.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund paid a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A shares,
a fee at an annual rate of up to 0.50% of the Fund's average daily net assets
attributable to Class R shares (of which up to 0.25% may be used for services)
and a fee at an annual rate of up to 1.00% of the Fund's average daily net
assets attributable to Class B and Class C shares. For Class B and Class C
shares, of the 1.00% fee, up to 0.75% is reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $87,000 and $6,000 for Class
B and Class C shares, respectively. These amounts are based on the most recent
information available as of July 31, 2010, and may be recovered from future
payments under the distribution plan or CDSCs. To the extent the unreimbursed
expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $38,254 for Class A and $1,067 for Class B for the
year ended Oct. 31, 2010.
EXPENSES WAIVED/REIMBURSED BY THE INVESTMENT MANAGER AND ITS AFFILIATES
For the year ended Oct. 31, 2010, the Investment Manager and its affiliates
waived/reimbursed certain fees and expenses such that net expenses (excluding
fees and expenses of acquired funds*), including the adjustment under the terms
of a performance incentive arrangement, were as follows:
<Table>
Class A.............................................. 1.42%
Class B.............................................. 2.17
Class C.............................................. 2.17
Class I.............................................. 1.03
Class R.............................................. 1.80
Class R4............................................. 1.37
</Table>
The waived/reimbursed fees and expenses for the transfer agency fees at the
class level were as follows:
<Table>
Class A............................................ $11,252
Class B............................................ 1,058
Class C............................................ 277
Class R4........................................... 6
</Table>
- --------------------------------------------------------------------------------
42 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The management fees waived/reimbursed at the Fund level were $105,278.
The Investment Manager and its affiliates have contractually agreed to waive
certain fees and reimburse certain expenses until Dec. 31, 2010, unless sooner
terminated at the sole discretion of the Board, such that net expenses
(excluding fees and expenses of acquired funds*), before giving effect to any
performance incentive adjustment, will not exceed the following percentage of
the class' average daily net assets:
<Table>
Class A.............................................. 1.45%
Class B.............................................. 2.21
Class C.............................................. 2.21
Class I.............................................. 1.06
Class R.............................................. 1.86
Class R4............................................. 1.36
</Table>
Effective Jan. 1, 2011, the Investment Manager and its affiliates have
contractually agreed to waive certain fees and reimburse certain expenses until
Dec. 31, 2011, unless sooner terminated at the sole discretion of the Board,
such that net expenses (excluding fees and expenses of acquired funds*), before
giving effect to any performance incentive adjustment, will not exceed the
following percentage of the class' average daily net assets:
<Table>
Class A.............................................. 1.45%
Class B.............................................. 2.20
Class C.............................................. 2.20
Class I.............................................. 1.03
Class R.............................................. 1.70
Class R4............................................. 1.33
</Table>
* In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the funds in
which it invests (also referred to as "acquired funds"), including
affiliated and non-affiliated pooled investment vehicles (including mutual
funds and exchange traded funds). Because the acquired funds have varied
expense and fee levels and the Fund may own different proportions of
acquired funds at different times, the amount of fees and expenses incurred
indirectly by the Fund will vary.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $13,798,033 and $10,381,692, respectively, for the year
ended Oct. 31, 2010. Realized gains and losses are determined on an identified
cost basis.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- ----------------------------------------------------------------
CLASS A
Sold 833,743 2,236,131
Converted from Class B(a) 66,308 44,959
Reinvested distributions 111,665 54,237
Redeemed (587,846) (601,493)
- ----------------------------------------------------------------
Net increase (decrease) 423,870 1,733,834
- ----------------------------------------------------------------
CLASS B
Sold 51,369 235,158
Reinvested distributions 8,432 4,436
Converted to Class A(a) (66,458) (45,070)
Redeemed (49,317) (40,049)
- ----------------------------------------------------------------
Net increase (decrease) (55,974) 154,475
- ----------------------------------------------------------------
CLASS C
Sold 36,140 49,579
Reinvested distributions 2,252 660
Redeemed (6,713) (5,153)
- ----------------------------------------------------------------
Net increase (decrease) 31,679 45,086
- ----------------------------------------------------------------
CLASS R(b)
Sold 49 --
Reinvested distributions 1 --
- ----------------------------------------------------------------
Net increase (decrease) 50 --
- ----------------------------------------------------------------
CLASS R3
Redeemed (1,000) --
- ----------------------------------------------------------------
Net increase (decrease) (1,000) --
- ----------------------------------------------------------------
CLASS R4
Sold 1,787 1,151
Reinvested distributions 29 2
Redeemed -- (1,122)
- ----------------------------------------------------------------
Net increase (decrease) 1,816 31
- ----------------------------------------------------------------
CLASS R5
Redeemed (1,000) --
- ----------------------------------------------------------------
Net increase (decrease) (1,000) --
- ----------------------------------------------------------------
</Table>
(a) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
(b) Effective Sept. 7, 2010, Class R2 shares were renamed Class R shares.
- --------------------------------------------------------------------------------
44 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At Oct. 31, 2010,
securities valued at $1,156,881 were on loan, secured by cash collateral of
$1,229,208 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for services provided and any other securities lending expenses. Net income of
$36,397 earned from securities lending for the year ended Oct. 31, 2010 is
included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in Columbia Short-Term Cash Fund
(formerly known as RiverSource Short-Term Cash Fund), a money market fund
established for the exclusive use of certain funds managed by the Investment
Manager and other institutional clients of the Investment Manager. The cost of
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
the Fund's purchases and proceeds from sales of shares of Columbia Short-Term
Cash Fund aggregated $9,324,225 and $8,973,035, respectively, for the year ended
Oct. 31, 2010. The income distributions received with respect to the Fund's
investment in Columbia Short-Term Cash Fund can be found in the Statement of
Operations and the Fund's invested balance in Columbia Short-Term Cash Fund at
Oct. 31, 2010, can be found in the Portfolio of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility became effective on Oct.
14, 2010, replacing a prior credit facility. The credit facility agreement,
which is a collective agreement between the Fund and certain other funds managed
by the Investment Manager, severally and not jointly, permits collective
borrowings up to $300 million. The borrowers shall have the right, upon written
notice to the Administrative Agent, to request an increase of up to $200 million
in the aggregate amount of the credit facility from new or existing lenders,
provided that the aggregate amount of the credit facility shall at no time
exceed $500 million. Participation in such increase by any existing lender shall
be at such lender's sole discretion. Interest is charged to each fund based on
its borrowings at a rate equal to the sum of the federal funds rate plus (i)
1.25% per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum.
Prior to Oct. 14, 2010, the credit facility agreement, which was a collective
agreement between the Fund and certain other funds managed by the Investment
Manager, severally and not jointly, permitted collective borrowings up to $300
million. The Fund also paid a commitment fee equal to its pro rata share of the
amount of the credit facility at a rate of 0.10% per annum, in addition to an
upfront fee equal to its pro rata share of 0.04% of the amount of the credit
facility. The Fund had no borrowings during the year ended Oct. 31, 2010.
10. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, passive foreign investment company (PFIC) holdings, re-
characterization of real estate investment trust distributions, investments in
- --------------------------------------------------------------------------------
46 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
partnerships, foreign tax credits and losses deferred due to wash sales. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the year that the
income or realized gains were recorded by the Fund.
In the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, undistributed net investment income has been increased by $22,889
and accumulated net realized loss has been increased by $22,889.
The tax character of distributions paid for the years indicated was as follows:
<Table>
<Caption>
YEAR ENDED OCT. 31, 2010 2009
- -----------------------------------------------------------------
Ordinary income............................ $1,348,671 $570,093
Long-term capital gain..................... -- --
</Table>
At Oct. 31, 2010, the components of distributable earnings on a tax basis were
as follows:
<Table>
Undistributed ordinary income.................... $ 593,416
Undistributed accumulated long-term gain......... $ --
Accumulated realized loss........................ $ (429,635)
Unrealized appreciation (depreciation)........... $7,570,560
</Table>
For federal income tax purposes, the Fund had a capital loss carry-over of
$429,635 at Oct. 31, 2010, that if not offset by capital gains will expire in
2017. For the year ended Oct. 31, 2010, $1,047,638 of capital loss carry-over
was utilized. It is unlikely the Board will authorize a distribution of any net
realized capital gains until the available capital loss carry-over has been
offset or expires. There is no assurance that the Fund will be able to utilize
all of its capital loss carry-over before it expires.
11. RISKS RELATING TO CERTAIN INVESTMENTS
FOREIGN/EMERGING MARKETS RISK
Investing in foreign securities may include certain risks and considerations not
typically associated with investing in U.S. securities, such as fluctuating
currency values and changing local and regional economic, political and social
conditions, which may result in greater market volatility. In addition, certain
foreign securities may not be as liquid as U.S. securities. Investing in
emerging markets may accentuate these risks.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 47
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
12. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements, other than as
noted below.
The Board of Directors of the Fund has approved the proposed merger of the Fund
into Columbia Global Equity Fund. It is currently anticipated that a meeting of
shareholders will be held during the first half of 2011 to vote on the proposal.
13. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as legacy
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's
- --------------------------------------------------------------------------------
48 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
decision in Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit
remanded the Gallus case to the District Court for further consideration in
light of the Supreme Court's decision in Jones v. Harris Associates. On Dec. 9,
2010, the District Court reinstated its July 9, 2007 summary judgment order in
favor of the defendants.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise Financial and its affiliates. Copies of these filings may be
obtained by accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 49
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
with the Funds, these proceedings are subject to uncertainties and, as such, we
are unable to estimate the possible loss or range of loss that may result. An
adverse outcome in one or more of these proceedings could result in adverse
judgments, settlements, fines, penalties or other relief that could have a
material adverse effect on the consolidated financial condition or results of
operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
50 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -----------------------
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
THREADNEEDLE GLOBAL EQUITY INCOME FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Threadneedle Global Equity Income Fund (the
Fund) (one of the portfolios constituting the RiverSource Global Series, Inc.)
as of October 31, 2010, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the two years
then ended and for the period from August 1, 2008 (when shares became available)
to October 31, 2008. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits 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 and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Fund's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Fund's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of October 31, 2010, by correspondence with the custodian
and brokers, or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 51
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued) -----------
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Threadneedle Global Equity Income Fund of the RiverSource Global Series, Inc. at
October 31, 2010, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the two years then ended and for the
period from August 1, 2008 (when shares became available) to October 31, 2008,
in conformity with U.S. generally accepted accounting principles.
-s- Ernst & Young LLP
Minneapolis, Minnesota
December 20, 2010
- --------------------------------------------------------------------------------
52 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
FEDERAL INCOME TAX INFORMATION ------------------------------------------------
(UNAUDITED)
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
Fiscal year ended Oct. 31, 2010
<Table>
<Caption>
INCOME DISTRIBUTIONS - the Fund designates the following tax attributes for
distributions:
Qualified Dividend Income for individuals.................... 52.34%
Dividends Received Deduction for corporations................ 25.41%
U.S. Government Obligations.................................. 0.00%
Foreign Taxes Paid........................................... $124,322
Foreign Source Income........................................ $867,266
</Table>
The Fund designates as distributions of long-term gains, to the extent necessary
to fully distribute such capital gains, earnings and profits distributed to
shareholders on the redemption of shares.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 53
BOARD MEMBERS AND OFFICERS -----------------------------------------------------
Shareholders elect a Board that oversees the Fund's operations. The Board
appoints officers who are responsible for day-to-day business decisions based on
policies set by the Board. The following is a list of the Fund's Board members.
Each Board member oversees 145 Columbia, RiverSource, Seligman and Threadneedle
funds. Under current Board policy, members generally serve until the next Board
meeting after he or she reaches the mandatory retirement age established by the
Board, or the fifteenth anniversary of the first Board meeting they attended as
members of the Board.
INDEPENDENT BOARD MEMBERS
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Kathleen Blatz Board member since Chief Justice, Minnesota Supreme Court, 1998-2006; None
901 S. Marquette Ave. 1/11/06 Attorney
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Pamela G. Carlton Board member since President, Springboard -- Partners in Cross Cultural None
901 S. Marquette Ave. 7/11/07 Leadership (consulting company)
Minneapolis, MN 55402
Age 56
- ------------------------------------------------------------------------------------------------------------------------------
Patricia M. Flynn Board member since Trustee Professor of Economics and Management, Bentley None
901 S. Marquette Ave. 11/1/04 University; former Dean, McCallum Graduate School of
Minneapolis, MN 55402 Business, Bentley University
Age 60
- ------------------------------------------------------------------------------------------------------------------------------
Anne P. Jones Board member since Attorney and Consultant None
901 S. Marquette Ave. 3/1/85
Minneapolis, MN 55402
Age 75
- ------------------------------------------------------------------------------------------------------------------------------
Stephen R. Lewis, Jr. Chair of the Board President Emeritus and Professor of Economics, Carleton Valmont Industries,
901 S. Marquette Ave. since 1/1/07, College Inc. (manufactures
Minneapolis, MN 55402 Board member irrigation systems)
Age 71 since 1/1/02
- ------------------------------------------------------------------------------------------------------------------------------
John F. Maher Board member Retired President and Chief Executive Officer and None
901 S. Marquette Ave. since 12/10/08 former Director, Great Western Financial Corporation
Minneapolis, MN 55402 (financial services), 1986-1997
Age 67
- ------------------------------------------------------------------------------------------------------------------------------
Catherine James Paglia Board member since Director, Enterprise Asset Management, Inc. (private None
901 S. Marquette Ave. 11/1/04 real estate and asset management company)
Minneapolis, MN 55402
Age 58
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
54 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT BOARD MEMBERS (CONTINUED)
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
Leroy C. Richie Board member Counsel, Lewis & Munday, P.C. since 1987; Vice Digital Ally, Inc.
901 S. Marquette Ave. since 11/11/08 President and General Counsel, Automotive Legal (digital imaging);
Minneapolis, MN 55402 Affairs, Chrysler Corporation, 1990-1997 Infinity, Inc. (oil
Age 69 and gas exploration
and production); OGE
Energy Corp. (energy
and energy services)
- ------------------------------------------------------------------------------------------------------------------------------
Alison Taunton-Rigby Board member since Chief Executive Officer and Director, RiboNovix, Inc. Idera
901 S. Marquette Ave. 11/13/02 since 2003 (biotechnology); former President, Aquila Pharmaceuticals,
Minneapolis, MN 55402 Biopharmaceuticals Inc.
Age 66 (biotechnology);
Healthways, Inc.
(health management
programs)
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 55
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
BOARD MEMBER AFFILIATED WITH THE INVESTMENT MANAGER*
<Table>
<Caption>
OTHER PRESENT OR
NAME, POSITION HELD PAST DIRECTORSHIPS
ADDRESS, WITH FUND AND PRINCIPAL OCCUPATION (WITHIN PAST 5
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS YEARS)
- ------------------------------------------------------------------------------------------------------------------------------
William F. Truscott Board member Chairman of the Board, Columbia Management Investment None
53600 Ameriprise since 11/7/01, Advisers, LLC (formerly RiverSource Investments, LLC)
Financial Center Vice President since since May 2010 (previously President, Chairman of the
Minneapolis, MN 55474 2002 Board and Chief Investment Officer, 2001-April 2010);
Age 50 Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010; Chief Executive
Officer, U.S. Asset Management &
President -- Annuities, Ameriprise Financial, Inc.
since May 2010 (previously President -- U.S. Asset
Management and Chief Investment Officer, 2005-April
2010 and Senior Vice President -- Chief Investment
Officer, 2001-2005); Director, President and Chief
Executive Officer, Ameriprise Certificate Company since
2006; Director, Columbia Management Investment
Distributors, Inc. (formerly RiverSource Fund
Distributors, Inc.) since May 2010 (previously Chairman
of the Board and Chief Executive Officer, 2008-April
2010); Chairman of the Board and Chief Executive
Officer, RiverSource Distributors, Inc. since 2006
- ------------------------------------------------------------------------------------------------------------------------------
</Table>
* Interested person (as defined under the 1940 Act) by reason of being an
officer, director, security holder and/or employee of the investment manager
or Ameriprise Financial.
The SAI has additional information about the Fund's Board members and is
available, without charge, upon request by calling 800.345.6611; contacting your
financial intermediary; or visiting columbiamanagement.com.
- --------------------------------------------------------------------------------
56 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
- --------------------------------------------------------------------------------
The Board has appointed officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is Vice President, the
Fund's other officers are:
FUND OFFICERS
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
J. Kevin Connaughton President since Senior Vice President and General Manager -- Mutual
One Financial Center 5/1/10 Fund Products, Columbia Management Investment Advisers,
Boston, MA 02111 LLC since May 2010; President, Columbia Funds since
Age 46 2009 (previously Senior Vice President and Chief
Financial Officer, June 2008 -- January 2009);
President, Atlantic Funds and Nations Funds since 2009;
Managing Director of Columbia Management Advisors, LLC,
December 2004 -- April 2010; Treasurer, Columbia Funds,
October 2003 -- May 2008; Treasurer, the Liberty Funds,
Stein Roe Funds and Liberty All-Star Funds, December
2000 -- December 2006
- --------------------------------------------------------------------------------------------------------
Amy K. Johnson Vice President since Senior Vice President and Chief Operating Officer,
5228 Ameriprise Financial 12/5/06 Columbia Management Investment Advisers, LLC (formerly
Center Minneapolis, MN RiverSource Investments, LLC) since May 2010
55474 (previously Chief Administrative Officer, 2009 -- April
Age 45 2010 and Vice President -- Asset Management and Trust
Company Services, 2006-2009 and Vice
President -- Operations and Compliance, 2004-2006);
Senior Vice President, Atlantic Funds, Columbia Funds
and Nations Funds since May 2010
- --------------------------------------------------------------------------------------------------------
Jeffrey P. Fox Treasurer since Chief Financial Officer, Columbia Management Investment
105 Ameriprise 7/10/02 Distributors, Inc. (formerly RiverSource Fund
Financial Center Distributors, Inc.) and of Seligman Data Corp. since
Minneapolis, MN 55474 2008; Vice President -- Investment Accounting,
Age 55 Ameriprise Financial, Inc. since 2002; Chief Financial
Officer, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
Scott R. Plummer Vice President, Chief Legal Officer and Assistant Secretary, Columbia
5228 Ameriprise Financial General Counsel and Management Investment Advisers, LLC (formerly
Center Secretary since RiverSource Investments, LLC) since June 2005; Vice
Minneapolis, MN 55474 12/5/06 President and Lead Chief Counsel -- Asset Management,
Age 51 Ameriprise Financial, Inc. since May 2010 (previously
Vice President and Chief Counsel -- Asset Management,
2005-April 2010 and Vice President -- Asset Management
Compliance, 2004-2005); Senior Vice President,
Secretary and Chief Legal Officer, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010; Vice
President, Chief Counsel and Assistant Secretary,
Columbia Management Investment Distributors, Inc.
(formerly RiverSource Fund Distributors, Inc.) since
2008; Vice President, General Counsel and Secretary,
Ameriprise Certificate Company since 2005; Chief
Counsel, RiverSource Distributors, Inc. since 2006
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 57
BOARD MEMBERS AND OFFICERS (continued) -----------------------------------------
FUND OFFICERS (CONTINUED)
<Table>
<Caption>
NAME, POSITION HELD
ADDRESS, WITH FUNDS AND PRINCIPAL OCCUPATION
AGE LENGTH OF SERVICE DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
Michael A. Jones Vice President since Director and President, Columbia Management Investment
100 Federal Street 5/1/10 Advisers, LLC since May 2010; President and Director,
Boston, MA 02110 Columbia Management Investment Distributors, Inc. since
Age 51 May 2010; Senior Vice President, Atlantic Funds,
Columbia Funds and Nations Funds since May 2010;
Manager, Chairman, Chief Executive Officer and
President, Columbia Management Advisors, LLC,
2007 -- April 2010; Chief Executive Officer, President
and Director, Columbia Management Distributors, Inc.,
2006 -- April 2010; former Co-President and Senior
Managing Director, Robeco Investment Management
- --------------------------------------------------------------------------------------------------------
Colin Moore Vice President since Chief Investment Officer, Columbia Management
One Financial Center 5/1/10 Investment Advisers, LLC since May 2010; Senior Vice
Boston, MA 02111 President, Atlantic Funds, Columbia Funds and Nations
Age 52 Funds since May 2010; Manager, Managing Director and
Chief Investment Officer, Columbia Management Advisors,
LLC, 2007- April 2010; Head of Equities, Columbia
Management Advisors, LLC, 2002-Sept. 2007
- --------------------------------------------------------------------------------------------------------
Linda Wondrack Chief Compliance Vice President and Chief Compliance Officer, Columbia
One Financial Center Officer since 5/1/10 Management Investment Advisers, LLC since May 2010;
Boston, MA 02111 Chief Compliance Officer, Columbia Funds since 2007;
Age 46 Senior Vice President and Chief Compliance Officer,
Atlantic Funds and Nations Funds since 2007; Director
(Columbia Management Group, LLC and Investment Product
Group Compliance), Bank of America, June 2005 -- April
2010
- --------------------------------------------------------------------------------------------------------
Neysa M. Alecu Money Laundering Vice President -- Compliance, Ameriprise Financial,
2934 Ameriprise Financial Prevention Officer Inc. since 2008; Anti-Money Laundering Officer and
Center since 11/9/05 and Identity Theft Prevention Officer, Columbia Management
Minneapolis, MN 55474 Identity Theft Investment Distributors, Inc. (formerly RiverSource
Age 46 Prevention Officer Fund Distributors, Inc.) since 2008; Anti-Money
since 2008 Laundering Officer, Ameriprise Financial, Inc. since
2005; Compliance Director, Ameriprise Financial, Inc.,
2004-2008
- --------------------------------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
58 THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.345.6611; contacting your financial intermediary; visiting
columbiamanagement.com; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting columbiamanagement.com; or searching the website of
the SEC at www.sec.gov.
- --------------------------------------------------------------------------------
THREADNEEDLE GLOBAL EQUITY INCOME FUND -- 2010 ANNUAL REPORT 59
THREADNEEDLE GLOBAL EQUITY INCOME FUND
P.O. Box 8081
Boston, MA 02266-8081
COLUMBIAMANAGEMENT.COM
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. The Fund is distributed by Columbia
Management Investment Distributors, Inc., member FINRA, and
managed by Columbia Management Investment Advisers, LLC.
(C)2010 Columbia Management Investment Advisers, LLC. All
(COLUMBIA MANAGEMENT LOGO) rights reserved. S-6525 AJ (12/10)
</Table>
Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to the
Registrant's principal executive officer and principal financial
officer.
(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 no waivers,
including any implicit waivers, from a provision of the code of ethics
described in 2(a) above that relates to one or more of the items set
forth in paragraph (b) of this item's instructions.
Item 3. Audit Committee Financial Expert.
The Registrant's board of directors has determined that independent
directors Pamela G. Carlton, Jeffrey Laikind, John F. Maher and Anne
P. Jones, each qualify as audit committee financial experts.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP for
professional services rendered for the audit of the annual financial
statements for RiverSource Global Series, Inc. were as follows:
2010 - $221,489 2009 - $224,347
(b) Audit-Related Fees. The fees for the year ended Oct. 31, to Ernst & Young
LLP for additional audit-related services rendered related to the
semiannual financial statement review, the issuance of consents for new
share class filings and the 2010 transfer agent 17Ad-13 review for
RiverSource Global Series, Inc. were as follows:
2010 - $7,057 2009 - $3,708
(c) Tax Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP for tax
compliance related services rendered for RiverSource Global Series, Inc.
were as follows:
2010 - $59,656 2009 - $43,761
(d) All Other Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP
for additional professional services rendered for RiverSource Global
Series, Inc. were as follows:
2010 - $0 2009 - $0
(e) (1) Audit Committee Pre-Approval Policy. Pursuant to Sarbanes-Oxley
pre-approval requirements, all services to be performed by Ernst & Young
LLP for the registrant and to the registrant's investment adviser and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant must be
pre-approved by the audit committee.
(e) (2) 100% of the services performed for items (b) through (d) above during
2010 and 2009 were pre-approved by the audit committee.
(f) Not applicable.
(g) Non-Audit Fees. The fees for the year ended Oct. 31, to Ernst & Young LLP
by the registrant for non-audit fees and by the registrant's investment
adviser, and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant were as
follows:
2010 - $2,492,674 2009 - $869,955
(h) 100% of the services performed in item (g) above during 2010 and 2009 were
pre-approved by the Ameriprise Financial Audit Committee and/or the
RiverSource Mutual Funds Audit Committee.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The registrant's "Schedule 1 - 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.
(b) Not applicable.
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 were no material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal
financial officer, based on their evaluation of the registrant's
disclosure controls and procedures as of a date within 90 days of the
filing of this report, have concluded that such controls and
procedures are adequately designed to ensure that information required
to be disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There was no change in the registrant's internal controls 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, is attached 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
Exhibit99.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) RiverSource Global Series, Inc.
By /s/ J. Kevin Connaughton
------------------------------
J. Kevin Connaughton
President and Principal
Executive Officer
Date December 20, 2010
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 /s/ J. Kevin Connaughton
------------------------------
J. Kevin Connaughton
President and Principal
Executive Officer
Date December 20, 2010
By /s/ Jeffrey P. Fox
------------------------------
Jeffrey P. Fox
Treasurer and Principal
Financial Officer
Date December 20, 2010