N-CSRS
COLUMBIA FUNDS TRUST I
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-2214
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COLUMBIA FUNDS TRUST I
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Russell Kane, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3363
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Date of fiscal year end: 05/31/2004
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Date of reporting period: 11/30/2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270,30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C, ss. 3507.
Item 1. Reports of Stockholders
[GRAPHIC]
Columbia Strategic Income Fund
Semiannual Report November 30, 2003
We are Columbia Funds!
INSIDE -- Management's discussion of the changes effective October 13, 2003
PRESIDENT'S MESSAGE
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Columbia Strategic Income Fund
[PHOTO]
Joseph R. Palombo
Dear Shareholder:
As you know, your fund has long been part of a larger investment management
organization. In the 1990s, it was part of Liberty Financial, whose affiliated
asset management companies included Colonial, Stein Roe and Newport. In 2001,
these companies became part of the asset management division of FleetBoston
Financial Corp., which you know as Columbia Management Group (CMG).
Earlier this year, six of the asset management firms brought together under the
CMG umbrella were consolidated and renamed Columbia Management Advisors, Inc.
On October 13, 2003, we took the natural next step in this process by changing
the name of our funds from Liberty to Columbia. For example, Liberty Strategic
Income Fund was changed to Columbia Strategic Income Fund. We have also
modified certain fund names that existed under both the Liberty and Columbia
brands. A complete list of new fund names and other information related to
these changes are available online at our new website address:
www.columbiafunds.com.
A consolidated identity
The consolidation of our management under a single organization and the
renaming of our funds are part of a larger effort to create a consistent
identity. Having taken these additional steps, we believe it will be easier for
shareholders to do business with us. All funds are now listed under "Columbia"
in the mutual fund listings section of your newspaper (depending on the
newspaper's listing requirements). All service inquiries are now handled by
Columbia Funds Services, Inc., the new name of our shareholder service
organization.
What has not changed is our commitment to our mutual fund shareholders. We
remain committed to providing the best possible customer service and to
offering a wide variety of mutual funds to help you pursue your long-term
financial goals. Should you have questions, please call Columbia Funds at
800-345-6611.
In the report that follows, portfolio manager Laura Ostrander discusses in
depth the investment strategies and other factors that affected your fund's
performance during the period. We encourage you to read the report carefully.
As always, we thank you for investing in Columbia funds. We look forward to
continuing to serve your investment needs in the years ahead.
Sincerely,
/s/ Joseph R. Palombo
Joseph R. Palombo
President
Table of Contents
Fund Profile.............. 1
Performance Information... 2
Economic Update........... 3
Portfolio Manager's Report 4
Financial Statements...... 6
Investment Portfolio.... 7
Statement of Assets and Liabilities.. 33
Statement of Operations.............. 34
Statement of Changes in Net Assets... 35
Notes to Financial Statements........ 37
Financial Highlights................. 43
Important Information
About This Report...................... 47
Columbia Funds......................... 48
Economic and market conditions change frequently. There is no assurance that
the trends described in this report will continue or commence.
[LOGO] Not FDIC Insured
May Lose Value
No Bank Guarantee
FUND PROFILE
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Columbia Strategic Income Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Because your fund is actively managed, there is no guarantee
that these breakdowns and percentages will be maintained in the future.
Quality breakdown as of 11/30/03 (%)
AAA 41.5
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AA 2.2
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A 3.0
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BBB 2.7
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BB 12.0
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B 25.7
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CCC 8.2
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CC 2.3
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D 0.2
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Non-rated 2.2
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Top 5 countries as of 11/30/03 (%)
USA 64.9
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Canada 4.0
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United Kingdom 3.2
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Brazil 2.8
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Australia 2.8
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Portfolio structure as of 11/30/03 (%)
Corporate fixed income bonds and notes 40.0
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Foreign governments obligations 33.3
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US government obligations 18.0
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US government agencies 5.9
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Short-term obligation 3.8
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Preferred stocks 1.0
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Convertible bonds 0.5
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Common stocks 0.3
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Warrants 0.1
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Qualitybreakdown is calculated as a percentage of total investments. Ratings
shown in the quality breakdown represent the highest rating assigned to
a particular bond by one of the following nationally-recognized rating
agencies: Standard & Poor's Corporation, Moody's Investors Service, Inc.
or Fitch Investors Service, Inc.
Countrybreakdown and portfolio structure are calculated as a percentage of net
assets.
(C) 2004 Morningstar, Inc. All Rights Reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may
not be copied or distributed; and (3) 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.
The Morningstar Style Box/TM/ reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as
measured by a bond's duration (short, intermediate or long). All of these
numbers are drawn from the data most recently provided by the fund and entered
into Morningstar's database as of month-end. Although the data are gathered
from reliable sources, Morningstar cannot guarantee completeness and accuracy.
As of 11/30/2003.
Summary
.. For the six-month period ended November 30, 2003, the fund's class A shares
(without sales charge) returned 4.63%.
.. The fund's return was better than both its benchmark and the average return
of its peer group, the Lipper Multi-Sector Income Funds Category.
.. Our emphasis on high-yield and foreign bonds aided performance. These bonds
were strong performers as economic conditions strengthened in the US and
around the world.
Objective
Seeks high current income consistent with prudent risk.
The fund also seeks maximum total return
Total Net Assets
$1,346.1 million
[GRAPHIC]
Lehman Brothers
Government/Credit
Class A shares Bond Index
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4.63% 1.9%
[GRAPHIC]
1
Performance of a $10,000 investment 12/01/93 - 11/30/03 ($)
sales charge without with
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Class A 19,268 18,353
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Class B 17,852 17,852
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Class C 18,544 18,544
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Class J 18,892 18,326
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Class Z 19,354 n/a
Past performance does not guarantee future investment results. Current
performance may be lower or higher than the performance data shown. Please
visit www.columbiafunds.com for daily and most recent month-end performance
updates.
Value of a $10,000 investment 12/01/93 - 11/30/03
[CHART]
Columbia Strategic Columbia Strategic
Income Fund - Income Fund - Lehman Brothers
Class A shares Class A shares Government/Credit
Without Sales Charge With Sales Charge Bond Index
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11/30/1993 $10,000 $ 9,525 $10,000
12/31/1993 10,164 9,681 10,044
01/31/1994 10,385 9,891 10,195
02/28/1994 10,218 9,733 9,972
03/31/1994 9,898 9,427 9,728
04/30/1994 9,800 9,334 9,647
05/31/1994 9,799 9,333 9,630
06/30/1994 9,768 9,304 9,608
07/31/1994 9,810 9,344 9,800
08/31/1994 9,823 9,356 9,804
09/30/1994 9,793 9,327 9,656
10/31/1994 9,836 9,368 9,645
11/30/1994 9,745 9,282 9,628
12/31/1994 9,789 9,324 9,691
01/31/1995 9,893 9,423 9,878
02/28/1995 10,133 9,652 10,107
03/31/1995 10,330 9,839 10,174
04/30/1995 10,558 10,056 10,317
05/31/1995 10,865 10,349 10,749
06/30/1995 10,893 10,376 10,835
07/31/1995 11,015 10,492 10,793
08/31/1995 11,060 10,534 10,931
09/30/1995 11,263 10,728 11,042
10/31/1995 11,420 10,877 11,205
11/30/1995 11,545 10,997 11,390
12/31/1995 11,769 11,210 11,557
01/31/1996 11,961 11,393 11,629
02/29/1996 11,859 11,296 11,382
03/31/1996 11,823 11,261 11,287
04/30/1996 11,903 11,338 11,209
05/31/1996 11,933 11,366 11,190
06/30/1996 11,997 11,427 11,339
07/31/1996 12,062 11,489 11,365
08/31/1996 12,230 11,649 11,336
09/30/1996 12,485 11,892 11,538
10/31/1996 12,655 12,054 11,807
11/30/1996 12,949 12,334 12,024
12/31/1996 12,976 12,359 11,891
01/31/1997 12,972 12,356 11,905
02/28/1997 13,076 12,455 11,930
03/31/1997 12,819 12,210 11,788
04/30/1997 12,960 12,345 11,960
05/31/1997 13,194 12,567 12,071
06/30/1997 13,373 12,738 12,216
07/31/1997 13,702 13,051 12,590
08/31/1997 13,643 12,995 12,449
09/30/1997 13,939 13,277 12,644
10/31/1997 13,897 13,237 12,847
11/30/1997 13,970 13,306 12,915
12/31/1997 14,094 13,425 13,050
01/31/1998 14,321 13,641 13,234
02/28/1998 14,375 13,693 13,208
03/31/1998 14,489 13,801 13,249
04/30/1998 14,563 13,871 13,315
05/31/1998 14,618 13,924 13,458
06/30/1998 14,614 13,920 13,595
07/31/1998 14,744 14,044 13,606
08/31/1998 14,133 13,462 13,871
09/30/1998 14,420 13,735 14,268
10/31/1998 14,396 13,712 14,166
11/30/1998 14,825 14,121 14,251
12/31/1998 14,820 14,116 14,287
01/31/1999 14,921 14,212 14,388
02/28/1999 14,727 14,028 14,046
03/31/1999 14,935 14,225 14,116
04/30/1999 15,144 14,425 14,152
05/31/1999 14,818 14,114 14,006
06/30/1999 14,814 14,110 13,962
07/31/1999 14,808 14,105 13,923
08/31/1999 14,738 14,038 13,912
09/30/1999 14,778 14,076 14,037
10/31/1999 14,774 14,072 14,074
11/30/1999 14,904 14,196 14,065
12/31/1999 15,011 14,298 13,980
01/31/2000 14,847 14,142 13,975
02/29/2000 15,072 14,356 14,150
03/31/2000 14,996 14,284 14,355
04/30/2000 14,852 14,147 14,285
05/31/2000 14,684 13,987 14,272
06/30/2000 14,986 14,274 14,563
07/31/2000 15,099 14,382 14,718
08/31/2000 15,216 14,493 14,925
09/30/2000 15,042 14,328 14,982
10/31/2000 14,722 14,023 15,076
11/30/2000 14,448 13,762 15,334
12/31/2000 14,912 14,203 15,636
01/31/2001 15,528 14,790 15,899
02/28/2001 15,548 14,809 16,063
03/31/2001 15,189 14,467 16,136
04/30/2001 15,026 14,312 16,015
05/31/2001 15,118 14,400 16,108
06/30/2001 14,927 14,218 16,186
07/31/2001 15,021 14,308 16,589
08/31/2001 15,274 14,548 16,801
09/30/2001 14,773 14,071 16,956
10/31/2001 15,203 14,480 17,386
11/30/2001 15,393 14,662 17,101
12/31/2001 15,368 14,638 16,966
01/31/2002 15,397 14,666 17,090
02/28/2002 15,426 14,694 17,235
03/31/2002 15,476 14,741 16,885
04/30/2002 15,776 15,027 17,213
05/31/2002 15,855 15,102 17,371
06/30/2002 15,595 14,854 17,519
07/31/2002 15,411 14,679 17,729
08/31/2002 15,657 14,914 18,126
09/30/2002 15,733 14,985 18,516
10/31/2002 15,766 15,017 18,338
11/30/2002 16,119 15,353 18,349
12/31/2002 16,591 15,803 18,835
01/31/2003 16,830 16,031 18,835
02/28/2003 17,130 16,316 19,171
03/31/2003 17,284 16,463 19,146
04/30/2003 17,947 17,095 19,351
05/31/2003 18,432 17,557 19,900
06/30/2003 18,587 17,704 19,821
07/31/2003 18,132 17,270 18,990
08/31/2003 18,228 17,362 19,115
09/30/2003 18,846 17,950 19,721
10/31/2003 18,942 18,042 19,471
11/30/2003 19,268 18,353 19,528
All results shown assume reinvestment of distributions. The graph and table do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares.
The above illustration assumes a $10,000 investment made on December 1, 1993
and reinvestment of all income and capital gains. The Lehman Brothers
Government/Credit Bond Index is an unmanaged group of fixed-income securities
that differs from the composition of the fund. Unlike the fund, indices are not
investments, do not incur fees or expenses and are not professionally managed.
It is not possible to invest directly in an index. Securities in the fund may
not match those in an index.
Average annual total return as of 11/30/03 (%)
Share class A B C J Z
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Inception 4/21/77 5/15/92 7/1/97 11/2/98 1/29/99
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Sales charge without with without with without with without with without
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6-month (cumulative) 4.63 -0.34 4.07 -0.93 4.32 3.32 4.31 1.18 4.62
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1-year 19.66 13.97 18.57 13.57 18.94 17.94 18.90 15.33 19.46
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5-year 5.39 4.37 4.57 4.28 4.76 4.76 4.98 4.35 5.49
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10-year 6.78 6.26 5.97 5.97 6.37 6.37 6.57 6.24 6.83
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Average annual total return as of 09/30/03 (%)
Share class A B C J Z
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Sales charge without with without with without with without with without
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6-month (cumulative) 9.04 3.86 8.82 3.82 8.72 7.72 8.88 5.62 9.24
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1-year 19.79 14.10 18.90 13.90 19.08 18.08 19.21 15.64 19.78
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5-year 5.49 4.47 4.66 4.37 4.81 4.81 5.12 4.48 5.60
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10-year 6.71 6.20 5.92 5.92 6.32 6.32 6.53 6.20 6.77
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All results shown reinvestment of distributions. The "with sales charge"
returns include the maximum 4.75% charge for class A shares, and 3% for class J
shares, the appropriate class B contingent deferred sales charge for the
holding period after purchase as follows: through first year--5%, second
year--4%, third year--3%, fourth year--3%, fifth year--2%, sixth year--1%,
thereafter--0%, and the class C contingent deferred sales charge of 1% for the
first year only. Performance for different share classes will vary based on
differences in sales charges and the fees associated with each class.
Performance reflects any voluntary waivers or reimbursements of fund expenses
by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance would have been lower.
The share performance information for classes C, J, Z (newer class shares)
includes returns of the fund's class A shares (the oldest existing fund class)
for periods prior to the inception of the newer class shares. These class A
share returns are not restated to reflect any expense differential (e.g., Rule
12b-1 fees) between class A shares and the newer class shares. Had the expense
differential been reflected, the returns for periods prior to the inception of
class C and J shares would have been lower, and the returns for the class Z
shares would have been higher.
2
PERFORMANCE INFORMATION
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Columbia Strategic Income Fund
ECONOMIC UPDATE
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Columbia Strategic Income Fund
After struggling for two years to maintain solid, forward movement, the US
economy steamed ahead during the six-month period that ended November 30, 2003.
The Fed's efforts to stimulate the economy through low short-term interest
rates were finally rewarded, but the significant upswing in growth was the
result of a combination of factors. A sizeable tax package gave disposable
income a boost. Income taxes fell across all tax brackets, and many tax-payers
received rebate checks during the summer months. Corporate profits rose
sharply, and orders for durable goods exceeded expectations late in the period.
Consumer confidence continued to climb, although not without an occasional
setback. Generally speaking, consumer spending increased and the outlook for
holiday spending was strong.
Economists began to grow optimistic that growth for the third quarter of 2003
would reflect this renewed vigor, but no one seemed prepared for how
extraordinary that growth might be. When gross domestic product (GDP) for the
third quarter was reported at 7.2%, then revised upward to 8.2%, it was clear
that the economy was firing on all cylinders. The business sector had finally
kicked into gear. Industrial production rose in the second half of 2003 and
business spending--especially on technology-related items--showed strength.
Even the jobs picture brightened by the end of November. After unemployment
peaked at 6.4% earlier in the year, it declined to 5.9%.
The US stock market, which had come to life at the end of March, headed sharply
higher in the second half of the year. The S&P 500 Index returned 10.80% for
the six-month period as all major sectors of the market benefited from renewed
investor enthusiasm and rising corporate profits. Technology and consumer
stocks were the strongest sectors, but telecommunications and health care
picked up in the last month of the period.
The US bond market experienced extraordinary volatility as interest rates fell
early in the period, rose sharply as the economy improved, then came back down
in the final months of the reporting period. High yield bonds continued to lead
the fixed income markets. The CSFB High Yield Index returned 9.70% for the
six-month period compared to a negative 1.90% return for the Lehman
Government/Credit Bond Index. Treasury and mortgage bonds suffered from the
shift in interest rates. Municipal bonds, however, held onto modest gains. The
Lehman Brothers Municipal Bond Index returned 0.19% for the six-month period.
Investment grade municipal bonds outperformed high yield municipal bonds.
Money market fund yields fell below 1%, reflecting historically low short-term
interest rates. The Investment Company Institute, which tracks assets in and
out of mutual funds, reported that money continued to flow out of money market
funds during the year as investors sought alternatives to the low yields
offered by short-term cash equivalents. Net new cash flow to money market funds
turned negative in 2002 for the first time since 1993.
3
PORTFOLIO MANAGER'S REPORT
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Columbia Strategic Income Fund
Net asset value per share as of 11/30/03 (%)
Class A 6.18
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Class B 6.17
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Class C 6.18
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Class J 6.16
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Class Z 6.13
Distributions declared per share 06/01/03 - 11/30/03 ($)
Class A 0.19
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Class B 0.16
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Class C 0.17
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Class J 0.18
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Class Z 0.19
SEC yield on 11/30/03 (%)
Class A 5.05
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Class B 4.57
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Class C 4.71
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Class J 4.73
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Class Z 5.56
The 30-day SEC yield reflects the portfolio's earning power net of expenses,
expressed as an annualized percentage of the public offering price per share.
For the six-month period ended November 30, 2003, class A shares of Columbia
Strategic Income Fund returned 4.63% without sales charge. Fund performance was
better than the Lehman Brothers Government/Credit Bond Index, which returned
negative 1.90% for the period. The fund also outperformed its peers, as
indicated by the average return of 3.57% for the Lipper Multi-Sector Income
Funds Category./1/ The fund was aided by especially strong performances from
high-yield and foreign bonds.
High-yield bonds lead the market
As the economy rebounded during the second half of 2003, investors continued to
favor securities that were linked to positive economic performance in the
United States and abroad over US Treasury securities--a trend that has been in
place for a year. The fund benefited from this trend favoring lower-quality
bonds because it had 40% of its assets invested in the high-yield sector during
the six-month reporting period. Just prior to the beginning of the period, we
sold Treasuries and invested the proceeds in formerly down-and-out industries
such as cable and telecom. The CCC-rated bonds of cable provider Charter
Communications (0.7% of net assets) rallied strongly./2/ Electric utility
holdings such as AES and Calpine (0.4% and 0.3% of net assets, respectively)
also performed well during the period.
Foreign securities outperform US Treasuries
The fund benefited from its exposure to a wide range of foreign markets. During
a time when the lowest quality securities posted the highest returns, our
overweight position in emerging markets such as Brazil and Russia was
especially helpful. Brazil's new government had been perceived as a threat to
the financial markets, but investor views turned positive when Brazil's new
president put pro-market, pro-reform policies in place. While the countries
continue to carry a high level of debt, inflation has come down and financial
markets have responded well to this and other signs of positive economic
momentum. Russia, meanwhile, has benefited from high oil prices, prudent fiscal
policy and improving global economic prospects. In October, Moody's upgraded
Russian securities to investment grade, noting the country's strong reserves
and its ability and willingness to pay back debt.
A weak US dollar during the period also enhanced returns from established
foreign markets. The fund had significant exposure to bonds denominated in
currencies such as the euro and the Canadian, Australian and New Zealand
dollars, each of which outperformed the US dollar on world currency markets
during the past year. The fund also had a small amount of exposure to bonds
denominated in the South African rand, which soared versus the dollar as the
South African government succeeded in getting inflation under control.
/1/Lipper Inc., a widely respected data provider in the industry, calculates an
average total return for mutual funds with similar investment objectives as
those of the fund.
/2/Holdings are disclosed as of November 30, 2003, and are subject to change.
4
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Columbia Strategic Income Fund
During the period, we had approximately 24% of the fund's assets invested in US
Treasury and mortgage-backed securities, the weakest performing sector in the
bond market. Our above-minimum allocation to the US Government sector was a
drag on performance.
Interest rates expected to hold steady in 2004
We anticipate that the US economy will continue to drive global growth in 2004.
The growing fiscal and current account deficits in the US are likely to
continue to put downward pressure on the dollar. The Federal Reserve should be
able to keep interest rates low for some time to come, because the unemployment
rate remains around 6%, job growth remains tentative and core inflation remains
low. It is not likely that the high-yield market will repeat its recent strong
performance because the yield advantage of low-rated securities came down
considerably over the past year. However, the overall economic environment
still appears favorable enough for us to maintain the fund's current allocation
to high-yield. We believe that low US interest rates and an economic recovery
should allow for continued improvement in credit quality.
[PHOTO] Laura A. Ostrander has managed or
co-managed Columbia Strategic Income Fund
L. Ostrander since September 2000.
/s/
Investing in high-yield securities offers the potential for high current income
and attractive total return, but involves certain risks. Lower-rated bond risks
include default of the issuer, rising interest rates and risk associated with
investing in securities of foreign and emerging markets, including currency
exchange rate fluctuations and economic and political change. Bond investing
also involves interest rate risk, which means that bond prices may change as
interest rates increase or decrease. Foreign investments involve market,
political, accounting and currency risks not associated with other investments.
It is not likely that the high-yield market will repeat its recent strong
performance of the past year. However, the economic environment appears
favorable enough for us to maintain the fund's current allocation to high-yield.
5
FINANCIAL STATEMENTS
------------------------------
November 30, 2003 (Unaudited) Columbia Strategic Income Fund
A guide to understanding your fund's financial statements
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Investment Portfolio A list of all of the fund's holdings and their market value as of the last
day of the reporting period. To show areas of concentration and
diversification, portfolio holdings are organized by type of asset,
industry and country or geographic region (if applicable).
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Statement of Assets and Liabilities This statement shows the fund's net assets and share price for each share
class. Net assets are calculated by subtracting all the fund's liabilities
(including any unpaid expenses) from the total of the fund's investment
and non-investment assets. The share price for each class is calculated by
dividing net assets for that class by the number of outstanding shares in
that class.
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Statement of Operations This statement details both the type of income earned by the fund and the
operating and non-operating expenses charged to the fund. The Statement of
Operations also shows any net gain or loss the fund realized on the sales
of its holdings during the period, as well as any unrealized gains or
losses over the reporting period. The total of these results represents
the fund's net increase or decrease in net assets from operations.
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Statement of Changes in Net Assets This statement shows how the fund's net assets were affected by its
operations results, distributions to shareholders and changes in the
number of fund shares. The Statement of Changes in Net Assets also
reconciles changes in the number of shares outstanding.
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Financial Highlights The financial highlights provide an overview of the fund's investment
results, including per-share analytics, such as net investment income or
loss from operations and distributions; ratios of expenses and net
investment income to average net assets. The financial highlights also
detail the fund's portfolio turnover rate, which is a measure of trading
activity. A separate table is provided for each share class.
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Notes to Financial Statements These notes disclose information regarding certain fund background
information, significant accounting policies of the fund, including
security valuation and income accruals and related party transactions.
6
INVESTMENT PORTFOLIO
------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - 97.7%
CORPORATE FIXED INCOME BONDS & NOTES - 40.0%
AGRICULTURE - 0.3%
Agriculture Production - 0.3% Par Value (S)
- -------------------------------------------- ------------------------------- --- --------- ----------
Hines Nurseries, Inc.,
10.250% 10/01/11(a) USD 870,000 941,775
Seminis Vegetable Seeds, Inc.,
10.250% 10/01/13(a) 2,502,000 2,652,120
--------- ----------
Agriculture Production Total 3,593,895
AGRICULTURE TOTAL 3,593,895
CONSTRUCTION - 1.4%
Building Construction - 1.4%
- -------------------------------------------- ------------------------------- --- --------- ----------
Associated Materials, Inc.,
9.750% 04/15/12 1,995,000 2,154,600
Atrium Companies, Inc.,
10.500% 05/01/09 1,445,000 1,537,119
Congoleum Corp.,
8.625% 08/01/08(m) 1,305,000 783,000
D.R. Horton, Inc.,
9.750% 09/15/10 4,355,000 5,138,900
K. Hovnanian Enterprises, Inc.:
8.875% 04/01/12 1,270,000 1,387,475
10.500% 10/01/07 1,470,000 1,725,412
Nortek Holdings, Inc.,
(b) 05/15/11(a)
(10.000% 11/15/07) 2,800,000 1,988,000
Standard Pacific Corp.,
9.250% 04/15/12 2,470,000 2,741,700
William Lyon Homes, Inc.,
10.750% 04/01/13 1,245,000 1,394,400
------------------------------- --- --------- ----------
Building Construction Total 18,850,606
----------
CONSTRUCTION TOTAL 18,850,606
CONSUMER STAPLES - 0.2%
Household Products - 0.2%
- -------------------------------------------- ------------------------------- --- --------- ----------
Playtex Products, Inc.,
9.375% 06/01/11 2,960,000 2,937,800
Scotts Co.,
6.625% 11/15/13(a) 240,000 241,800
------------------------------- --- --------- ----------
Household Products Total 3,179,600
----------
CONSUMER STAPLES TOTAL 3,179,600
FINANCE, INSURANCE & REAL ESTATE - 1.1%
Depository Institutions - 0.2%
Dollar Financial Group,
9.750% 11/15/11(a) 1,835,000 1,890,050
Western Financial Bank,
9.625% 05/15/12 360,000 403,200
------------------------------- --- --------- ----------
Depository Institutions Total 2,293,250
See notes to investment portfolio.
7
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
FINANCE, INSURANCE & REAL ESTATE - (continued)
Financial Services - 0.7% Par Value (S)
- ---------------------------------------------- -------------------------------- --- --------- ----------
Finova Group, Inc.,
7.500% 11/15/09 USD 3,300,000 1,831,500
LaBranche & Co.,
12.000% 03/02/07 1,820,000 1,729,000
MDP Acquisitions PLC,
9.625% 10/01/12 3,300,000 3,663,000
Orion Power Holdings, Inc.,
12.000% 05/01/10 860,000 1,006,200
Trump Holdings & Funding,
11.625% 03/15/10 1,440,000 1,288,800
-------------------------------- --- --------- ----------
Financial Services Total 9,518,500
Real Estate - 0.2%
- ---------------------------------------------- -------------------------------- --- --------- ----------
Forest City Enterprises, Inc.,
7.625% 06/01/15 1,020,000 1,065,900
Thornburg Mortgage, Inc.,
8.000% 05/15/13 1,545,000 1,622,250
-------------------------------- --- --------- ----------
Real Estate Total 2,688,150
--------- ----------
FINANCE, INSURANCE & REAL ESTATE TOTAL 14,499,900
INDUSTRIALS - 0.1%
Construction & Farm Machinery - 0.1%
- ---------------------------------------------- -------------------------------- --- --------- ----------
Case New Holland, Inc.,
9.250% 08/01/11(a) 1,460,000 1,635,200
-------------------------------- --- --------- ----------
Construction & Farm Machinery Total 1,635,200
--------- ----------
INDUSTRIALS TOTAL 1,635,200
MANUFACTURING - 11.1%
Apparel - 0.5%
- ---------------------------------------------- -------------------------------- --- --------- ----------
Broder Brothers Co.,
11.250% 10/15/10(a) 1,660,000 1,676,600
Levi Strauss & Co.,
12.250% 12/15/12 3,135,000 2,257,200
Perry Ellis International, Inc.,
8.875% 09/15/13(a) 235,000 244,400
Phillips Van-Heusen,
8.125% 05/01/13(a) 850,000 896,750
Warnaco, Inc.,
8.875% 06/15/13(a) 610,000 620,675
William Carter Co.,
10.875% 08/15/11 604,000 686,295
-------------------------------- --- --------- ----------
Apparel Total 6,381,920
See notes to investment portfolio.
8
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MANUFACTURING - (continued)
Auto Parts & Equipment - 0.4% Par Value ($)
- ---------------------------------- ------------------------------- --- ---------- ----------
Delco Remy International, Inc.,
10.625% 08/01/06 USD 685,000 671,300
Goodyear Tire & Rubber Co.,
7.857% 08/15/11 2,255,000 1,928,025
Metaldyne Corp.,
10.000% 11/01/13(a) 930,000 902,100
Rexnord Corp.,
10.125% 12/15/12 850,000 926,500
TRW Automotive, Inc.:
9.375% 02/15/13(a) 465,000 525,450
11.000% 02/15/13(a) 380,000 446,500
------------------------------- --- ---------- ----------
Auto Parts & Equipment Total 5,399,875
Chemicals & Allied Products - 2.0%
- ---------------------------------- ------------------------------- --- ---------- ----------
Avecia Group PLC,
11.000% 07/01/09 2,565,000 2,205,900
Equistar Chemicals Funding LP:
10.125% 09/01/08 1,285,000 1,362,100
10.625% 05/01/11(a) 1,125,000 1,186,875
FMC Corp.,
10.250% 11/01/09 895,000 1,047,150
Huntsman ICI Holdings LLC,
(c) 12/31/09 19,980,000 8,691,300
IMC Global, Inc.,
10.875% 08/01/13(a) 1,410,000 1,487,550
Lyondell Chemical Co.,
9.625% 05/01/07 2,450,000 2,517,375
MacDermid, Inc.,
9.125% 07/15/11 1,250,000 1,396,875
Phibro Animal Health Corp.,
13.000% 12/01/07(a) 1,770,000 1,823,100
Polyone Corp.,
10.625% 05/15/10 495,000 475,200
Terra Capital, Inc.,
12.875% 10/15/08 2,990,000 3,475,875
Westlake Chemical Corp.,
8.750% 07/15/11(a) 1,180,000 1,271,450
------------------------------- --- ---------- ----------
Chemical & Allied Products Total 26,940,750
See notes to investment portfolio.
9
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MANUFACTURING - (continued)
Electronic & Electrical Equipment - 0.5% Par Value ($)
- ---------------------------------------- -------------------------------- --- --------- ----------
Amkor Technology, Inc.:
9.250% 02/15/08 USD 1,800,000 2,016,000
10.500% 05/01/09 1,700,000 1,819,000
Condor Systems, Inc.,
11.875% 05/01/09(d) 4,000,000 920,000
General Cable Corp.,
9.500% 11/15/10(a) 450,000 474,750
TransDigm, Inc.,
8.375% 07/15/11(a) 1,175,000 1,239,625
Xerox Corp.,
7.125% 06/15/10 960,000 988,800
-------------------------------- --- --------- ----------
Electronic & Electrical Equipment Total 7,458,175
Fabricated Metal - 0.2%
- ---------------------------------------- -------------------------------- --- --------- ----------
Earle M. Jorgensen & Co.,
9.750% 06/01/12 2,800,000 3,052,000
-------------------------------- --- --------- ----------
Fabricated Metal Total 3,052,000
Food & Kindred Products - 1.8%
- ---------------------------------------- -------------------------------- --- --------- ----------
Bavaria SA,
8.875% 11/01/10(a) 2,360,000 2,337,132
Constellation Brands, Inc.,
8.125% 01/15/12 1,175,000 1,286,625
Del Monte Corp.,
9.250% 05/15/11 1,600,000 1,756,000
Dole Food Co., Inc.,
8.625% 05/01/09 1,485,000 1,600,087
Merisant Co.,
9.500% 07/15/13(a) 1,205,000 1,235,125
Michael Foods, Inc.,
8.000% 11/15/13 1,000,000 1,025,000
Pinnacle Foods Holdings,
8.250% 12/01/13(a) 2,190,000 2,255,700
Premier International Foods PLC,
12.000% 09/01/09 4,600,000 5,014,000
Roundy's, Inc.,
8.875% 06/15/12 2,615,000 2,771,900
Smithfield Foods, Inc.,
8.000% 10/15/09 2,835,000 3,118,500
Tabletop Holdings, Inc.,
(b) 05/15/14
(12.250% 11/15/08)(a) 2,930,000 1,582,200
-------------------------------- --- --------- ----------
Food & Kindred Products Total 23,982,269
See notes to investment portfolio.
10
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MANUFACTURING - (continued)
Forest Products - 0.1% Par Value ($)
- ---------------------------------------- -------------------------------------- ---- --------- ---------
Millar Western Forest,
7.750% 11/15/13(a) USD 1,260,000 1,266,439
-------------------------------------- ---- --------- ---------
Forest Products Total 1,266,439
Furniture & Fixtures - 0.3%
- ---------------------------------------- -------------------------------------- ---- --------- ---------
Juno Lighting, Inc.,
11.875% 07/01/09 1,920,000 2,088,000
Norcraft Companies,
9.000% 11/01/11(a) 835,000 878,838
Tempur-Pedic, Inc.,
10.250% 08/15/10(a) 1,575,000 1,760,062
-------------------------------------- ---- --------- ---------
Furniture & Fixtures Total 4,726,900
Machinery & Computer Equipment - 0.2%
- ---------------------------------------- -------------------------------------- ---- --------- ---------
Cummins, Inc.,
9.500% 12/01/10(a) 1,785,000 2,052,750
-------------------------------------- ---- --------- ---------
Machinery & Computer Equipment Total 2,052,750
Measuring & Analyzing Instruments - 0.1%
- ---------------------------------------- -------------------------------------- ---- --------- ---------
Fisher Scientific International, Inc.,
8.125% 05/01/12 869,000 932,003
-------------------------------------- ---- --------- ---------
Measuring & Analyzing Instruments Total 932,003
Miscellaneous Manufacturing - 2.0%
- ---------------------------------------- -------------------------------------- ---- --------- ---------
Agco Corp.,
9.500% 05/01/08 2,430,000 2,654,775
Amscan Holdings, Inc.,
9.875% 12/15/07 2,750,000 2,750,000
Applied Extrusion Technologies, Inc.,
10.750% 07/01/11 2,325,000 1,801,875
Crown European Holdings SA,
10.875% 03/01/13 1,800,000 2,079,000
Flowserve Corp.,
12.250% 08/15/10 1,889,000 2,191,240
Hexcel Corp.,
9.750% 01/15/09 1,305,000 1,360,462
Kinetic Concepts, Inc.,
7.375% 05/15/13(a) 705,000 726,150
Koppers Industries, Inc.,
9.875% 10/15/13(a) 2,180,000 2,365,300
Newcor, Inc.,
6.000% 01/31/13(f) 847,510 367,997
See notes to investment portfolio.
11
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MANUFACTURING - (continued)
Miscellaneous Manufacturing - (continued) Par Value ($)
- ----------------------------------------- --------------------------------- ---- --------- ----------
Owens-Illinois, Inc.:
7.150% 05/15/05 USD 460,000 470,350
7.350% 05/15/08 1,950,000 1,954,875
7.500% 05/15/10 440,000 440,000
8.100% 05/15/07 1,000,000 1,035,000
SPX Corp.,
7.500% 01/01/13 1,575,000 1,685,250
Tekni-Plex, Inc.,
12.750% 06/15/10 2,715,000 2,877,900
Terex Corp., Series 2001 B,
10.375% 04/01/11 2,000,000 2,240,000
--------------------------------- ---- --------- ----------
Miscellaneous Manufacturing Total 27,000,174
Paper Products - 0.7%
- ----------------------------------------- --------------------------------- ---- --------- ----------
Berry Plastics Corp.,
10.750% 07/15/12(a) 1,400,000 1,589,000
Buckeye Technologies, Inc.,
8.500% 10/01/13(a) 390,000 414,375
Caraustar Industries, Inc.,
9.875% 04/01/11 1,605,000 1,701,300
Georgia-Pacific Corp.,
8.875% 02/01/10 1,900,000 2,142,250
Norske Skog Canada Ltd.,
8.625% 06/15/11 850,000 867,000
Smurfit-Stone Container Corp.,
8.250% 10/01/12 1,600,000 1,708,000
Tembec Industries, Inc.,
8.500% 02/01/11 1,400,000 1,358,000
--------------------------------- ---- --------- ----------
Paper Products Total 9,779,925
Pollution Control - 0.0%
- ----------------------------------------- --------------------------------- ---- --------- ----------
EnviroSource, Inc.,
14.000% 12/15/08(f) 526,803 508,976
--------------------------------- ---- --------- ----------
Pollution Control Total 508,976
Primary Metal - 0.6%
- ----------------------------------------- --------------------------------- ---- --------- ----------
Bayou Steel Corp.,
9.500% 05/15/08(d) 3,000,000 570,000
Kaiser Aluminum & Chemical Corp.,
10.875% 10/15/06(d) 4,715,000 4,078,475
Metallurg, Inc.,
11.000% 12/01/07 2,200,000 1,144,000
See notes to investment portfolio.
12
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MANUFACTURING - (continued)
Primary Metal - (continued) Par Value ($)
- ------------------------------------ -------------------------------------- ---- --------- -----------
Oregon Steel Mills, Inc.,
10.000% 07/15/09 USD 1,350,000 1,080,000
Steel Dynamics, Inc.:
9.500% 03/15/09(a) 480,000 524,400
9.500% 03/15/09 460,000 502,550
-------------------------------------- ---- --------- -----------
Primary Metal Total 7,899,425
Printing & Publishing - 1.4%
- ------------------------------------ -------------------------------------- ---- --------- -----------
Dex Media, Inc.,
8.000% 11/15/13(a) 1,800,000 1,822,500
Dex Media East LLC,
12.125% 11/15/12 3,080,000 3,696,000
Dex Media West LLC,
9.875% 08/15/13(a) 1,660,000 1,884,100
Hollinger, Inc.,
11.875% 03/01/11(a) 1,780,000 1,940,200
Primedia, Inc.,
8.875% 05/15/11 2,650,000 2,749,375
Von Hoffman Corp.:
10.250% 03/15/09(a) 550,000 577,500
10.250% 03/15/09 3,200,000 3,360,000
Yell Finance BV,
10.750% 08/01/11 1,860,000 2,185,500
-------------------------------------- ---- --------- -----------
Printing & Publishing Total 18,215,175
Stone, Clay, Glass & Concrete - 0.0%
- ------------------------------------ -------------------------------------- ---- --------- -----------
Owens-Brockway Glass Container,
8.250% 05/15/13(a) 340,000 355,300
-------------------------------------- ---- --------- -----------
Stone, Clay, Glass & Concrete Total 355,300
Textile Mill Products - 0.1%
- ------------------------------------ -------------------------------------- ---- --------- -----------
Collins & Aikman Floor Covering, Inc.,
9.750% 02/15/10 1,400,000 1,501,500
-------------------------------------- ---- --------- -----------
Textile Mill Products Total 1,501,500
Transportation Equipment - 0.2%
- ------------------------------------ -------------------------------------- ---- --------- -----------
Sequa Corp.,
8.875% 04/01/08 1,160,000 1,261,500
Teekay Shipping Corp.,
8.875% 07/15/11 700,000 794,500
-------------------------------------- ---- --------- -----------
Transportation Equipment Total 2,056,000
-----------
MANUFACTURING TOTAL 149,509,556
See notes to investment portfolio.
13
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MINING & ENERGY - 4.2%
Metal Mining - 0.3% Par Value($)
- --------------------------- ------------------------------ --- ----------- ---------
TriMas Corp.,
9.875% 06/15/12 USD 3,905,000 3,973,337
------------------------------ --- ----------- ---------
Metal Mining Total 3,973,337
Oil & Gas Extraction - 3.6%
- --------------------------- ------------------------------ --- ----------- ---------
Benton Oil & Gas Co.,
9.375% 11/01/07 2,445,000 2,420,550
Chesapeake Energy Corp.:
7.750% 01/15/15 1,000,000 1,075,000
8.125% 04/01/11 770,000 839,300
Coastal Corp.,
7.750% 06/15/10 3,550,000 3,124,000
Compton Petroleum Corp.,
9.900% 05/15/09 2,200,000 2,398,000
Denbury Resources, Inc.,
7.500% 04/01/13(a) 1,000,000 1,037,500
Dynegy Holdings Inc.:
8.750% 02/15/12 1,895,000 1,828,675
9.875% 07/15/10(a) 960,000 1,046,400
10.125% 07/15/13(a) 240,000 264,000
El Paso Corp.,
8.500% 06/01/10 625,000 684,375
Encore Acquisition Co.,
8.375% 06/15/12 1,885,000 1,998,100
Energy Partners Ltd.,
8.750% 08/01/10 700,000 739,375
Forest Oil Corp.,
8.000% 06/15/08 2,405,000 2,585,375
Gazprom,
9.625% 03/01/13 1,850,000 1,998,000
Gulfterra Energy Partners,
8.500% 06/01/10 1,050,000 1,149,750
Houston Exploration Co.,
7.000% 06/15/13(a) 485,000 491,063
Magnum Hunter Resources, Inc.,
9.600% 03/15/12 2,100,000 2,362,500
Northwest Pipeline Corp.,
8.125% 03/01/10 760,000 843,600
PDVSA Finance Ltd.:
6.250% 02/15/06 EUR 3,367,700 3,959,590
6.650% 02/15/06 USD 2,550,000 2,530,875
See notes to investment portfolio.
14
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
MINING & ENERGY - (continued)
Oil & Gas Extraction - (continued) Par Value ($)
- ---------------------------------- -------------------------- ---- --------- ----------
Petroleos Mexicanos,
6.500% 02/01/05 USD 1,215,000 1,272,712
Pogo Producing Co.,
8.250% 04/15/11 1,200,000 1,329,000
Premcor Refining Group,
7.500% 06/15/15 1,430,000 1,465,750
Sonat, Inc.,
7.625% 07/15/11 2,585,000 2,223,100
Southern Natural Gas Co.,
8.875% 03/15/10 1,335,000 1,485,187
Stone Energy Corp.,
8.250% 12/15/11 1,475,000 1,581,938
Tom Brown, Inc.,
7.250% 09/15/13 1,040,000 1,086,800
TransTexas Gas Corp.,
15.000% 03/15/05(f)(g) 465,296 31,128
Williams Companies, Inc.,
8.125% 03/15/12 4,925,000 5,319,000
-------------------------- ---- --------- ----------
Oil & Gas Extraction Total 49,170,643
Oil & Gas Field Services - 0.3%
- ---------------------------------- -------------------------- ---- --------- ----------
J. Ray McDermott SA,
11.000% 12/15/13(a)(h) 1,580,000 1,587,900
Newpark Resources, Inc.,
8.625% 12/15/07 1,860,000 1,915,800
-------------------------- ---- --------- ----------
Oil & Gas Field Services Total 3,503,700
-------------------------- ---- --------- ----------
MINING & ENERGY TOTAL 56,647,680
RETAIL TRADE - 1.2%
Food Stores - 0.2%
- ---------------------------------- -------------------------- ---- --------- ----------
Delhaize America, Inc.,
8.125% 04/15/11 1,550,000 1,755,887
Winn-Dixie Stores, Inc.,
8.875% 04/01/08 1,250,000 1,234,375
-------------------------- ---- --------- ----------
Food Stores Total 2,990,262
Miscellaneous Retail - 0.9%
- ---------------------------------- -------------------------- ---- --------- ----------
Gap, Inc.,
8.800% 12/15/08 475,000 580,688
General Nutrition Centers,
8.500% 12/01/10(a)(h) 670,000 683,400
See notes to investment portfolio.
15
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
RETAIL TRADE - (continued)
Miscellaneous Retail - (continued) Par Value($)
- ---------------------------------- ---------------------------------------------- ---- --------- ----------
JC Penney Co., Inc.,
8.000% 03/01/10 USD 2,580,000 2,967,000
Rite Aid Corp.,
9.250% 06/01/13(a) 3,555,000 3,812,738
Saks, Inc.,
8.250% 11/15/08 670,000 762,125
Steinway Musical Instruments, Inc.,
8.750% 04/15/11 2,600,000 2,730,000
----------
Miscellaneous Retail Total 11,535,951
Restaurants - 0.1%
- ---------------------------------- ---------------------------------------------- ---- --------- ----------
Dominos, Inc.,
8.250% 07/01/11(a) 520,000 547,950
Yum! Brands, Inc.,
7.700% 07/01/12 625,000 715,625
---------------------------------------------- ---- --------- ----------
Restaurants Total 1,263,575
----------
RETAIL TRADE TOTAL 15,789,788
SERVICES - 6.9%
Amusement & Recreation - 2.6%
- ---------------------------------- ---------------------------------------------- ---- --------- ----------
Ameristar Casinos, Inc.,
10.750% 02/15/09 1,750,000 2,003,750
Boyd Gaming Corp.,
8.750% 04/15/12 780,000 846,300
Circus & Eldorado/Silver Legacy Capital Corp.,
10.125% 03/01/12 1,495,000 1,521,163
Corus Entertainment, Inc.,
8.750% 03/01/12 1,275,000 1,402,500
Hollywood Casino Shreveport,
13.000% 08/01/06(g) 4,230,000 3,024,450
Hollywood Entertainment Corp.,
9.625% 03/15/11 2,225,000 2,391,875
Inn of the Mountain Gods Resort,
12.000% 11/15/10(a) 1,135,000 1,194,588
Mohegan Tribal Gaming Authority:
8.000% 04/01/12 1,575,000 1,701,000
8.375% 07/01/11 1,285,000 1,397,438
Park Place Entertainment Corp.,
9.375% 02/15/07 690,000 771,075
See notes to investment portfolio.
16
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
SERVICES - (continued)
Amusement & Recreation - (continued) Par Value ($)
- --------------------------------------- ---------------------------------- ---- --------- ----------
Pinnacle Entertainment, Inc.,
9.250% 02/15/07(a) USD 5,575,000 5,742,250
Poster Financial Group, Inc.,
8.750% 12/01/11(a)(h) 335,000 343,375
Regal Cinemas, Inc.,
9.375% 02/01/12 880,000 998,800
River Rock Entertainment,
9.750% 11/01/11(a) 1,630,000 1,735,950
Six Flags, Inc.,
9.500% 02/01/09 5,045,000 5,108,062
Town Sports International, Inc.,
9.625% 04/15/11(a) 1,075,000 1,150,250
Venetian Casino Resort LLC,
11.000% 06/15/10(a) 1,975,000 2,286,062
Wynn Las Vegas LLC,
12.000% 11/01/10 1,190,000 1,374,450
---------------------------------- ---- --------- ----------
Amusement & Recreation Total 34,993,338
Auto Equipment & Rental Services - 1.0%
- --------------------------------------- ---------------------------------- ---- --------- ----------
Accuride Corp.,
9.250% 02/01/08 675,000 681,750
Dana Corp.:
9.000% 08/15/11 1,375,000 1,564,062
10.125% 03/15/10 1,190,000 1,362,550
Dura Operating Corp.:
8.625% 04/15/12 2,125,000 2,156,875
9.000% 05/01/09 1,780,000 1,646,500
NationsRent, Inc.,
9.500% 10/15/10(a) 2,475,000 2,567,813
United Rentals, Inc.,
10.750% 04/15/08 1,640,000 1,828,600
Williams Scotsman, Inc.,
9.875% 06/01/07 1,130,000 1,113,050
---------------------------------- ---- --------- ----------
Auto Equipment & Rental Services Total 12,921,200
Business Services - 0.5%
- --------------------------------------- ---------------------------------- ---- --------- ----------
IMCO Recycling, Inc.,
10.375% 10/15/10(a) 1,210,000 1,137,400
Iron Mountain, Inc.,
6.625% 01/01/16 1,940,000 1,891,500
Moore North America Finance, Inc.,
7.875% 01/15/11 995,000 1,129,325
See notes to investment portfolio.
17
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
SERVICES - (continued)
Business Services - (continued) Par Value ($)
- ------------------------------- --------------------------------------------- ---- --------- ----------
Stratus Technologies, Inc.,
10.375% 12/01/08(a) USD 1,800,000 1,840,500
Wackenhut Corrections,
8.250% 07/15/13(a) 940,000 991,700
--------------------------------------------- ---- --------- ----------
Business Services Total 6,990,425
Funeral Services - 0.4%
- ------------------------------- --------------------------------------------- ---- --------- ----------
Service Corp. International,
7.700% 04/15/09 2,910,000 3,019,125
Stewart Enterprises, Inc.,
10.750% 07/01/08 1,895,000 2,131,875
--------------------------------------------- ---- --------- ----------
Funeral Services Total 5,151,000
Health Services - 1.9%
- ------------------------------- --------------------------------------------- ---- --------- ----------
AmerisourceBergen Corp.,
8.125% 09/01/08 1,080,000 1,196,100
Bio-Rad Laboratories, Inc.,
7.500% 08/15/13 2,020,000 2,171,500
Coventry Health Care, Inc.,
8.125% 02/15/12 2,550,000 2,811,375
HCA, Inc.,
8.750% 09/01/10 1,815,000 2,099,048
IASIS Healthcare Corp.,
13.000% 10/15/09 1,655,000 1,857,738
Insight Health Services Corp.,
9.875% 11/01/11 2,160,000 2,270,700
Magellan Health Services, Inc.,
9.375% 11/15/07(a)(d) 1,100,000 1,215,500
MedQuest, Inc.,
11.875% 08/15/12(a) 3,000,000 3,288,750
Pacificare Health Systems, Inc.,
10.750% 06/01/09 3,140,000 3,611,000
Tenet Healthcare Corp.,
6.375% 12/01/11 2,880,000 2,664,000
United Surgical Partners International, Inc.,
10.000% 12/15/11 2,235,000 2,519,962
--------------------------------------------- ---- --------- ----------
Health Services Total 25,705,673
See notes to investment portfolio.
18
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
SERVICES - (continued)
Hotels, Camps & Lodging - 0.5% Par Value ($)
- ------------------------------ ------------------------------------------ ---- --------- ----------
Hard Rock Hotel, Inc.,
8.875% 06/01/13(a) USD 865,000 908,250
Host Marriott LP,
9.500% 01/15/07 2,100,000 2,296,875
Royal Caribbean Cruises Ltd.,
8.000% 05/15/10 1,330,000 1,434,737
Starwood Hotels & Resorts Worldwide, Inc.,
7.875% 05/01/12(a) 2,050,000 2,278,063
------------------------------------------ ---- --------- ----------
Hotels, Camps & Lodging Total 6,917,925
----------
SERVICES TOTAL 92,679,561
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 13.5%
Aerospace - 0.2%
- ------------------------------ ------------------------------------------ ---- --------- ----------
BE Aerospace, Inc.,
8.875% 05/01/11 2,095,000 1,906,450
Vought Aircraft Industries, Inc.,
8.000% 07/15/11(a) 965,000 977,062
------------------------------------------ ---- --------- ----------
Aerospace Total 2,883,512
Air Transportation - 0.8%
- ------------------------------ ------------------------------------------ ---- --------- ----------
Delta Airlines, Inc.,
7.900% 12/15/09 2,680,000 2,144,000
Northwest Airlines, Inc.,
9.875% 03/15/07 2,485,000 2,211,650
Petroleum Helicopters, Inc.,
9.375% 05/01/09 2,710,000 2,920,025
U.S. Airways, Inc.,
10.375% 03/01/13 (i) 8,883,564 3,064,830
------------------------------------------ ---- --------- ----------
Air Transportation Total 10,340,505
Broadcasting - 1.8%
- ------------------------------ ------------------------------------------ ---- --------- ----------
Advanstar Communications, Inc.,
12.000% 02/15/11 3,395,000 3,479,875
Canwest Media, Inc.,
10.625% 05/15/11 3,690,000 4,188,150
Emmis Communications Corp.,
(b) 03/15/11
(12.500% 03/15/06) 2,613,000 2,384,363
Quebecor Media, Inc.,
11.125% 07/15/11 4,000,000 4,590,000
Sinclair Broadcast Group, Inc.,
8.750% 12/15/11 960,000 1,051,200
See notes to investment portfolio.
19
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued)
Broadcasting - (continued) Par Value ($)
- --------------------------- ------------------------------------------- --- ---------- ----------
Spanish Broadcasting System,
9.625% 11/01/09 USD 450,000 472,500
TV Azteca SA de CV,
10.500% 02/15/07 3,755,000 3,848,875
Videotron Ltee,
6.875% 01/15/14(a) 1,390,000 1,431,700
XM Satellite Radio, Inc.,
(b) 12/31/09
(14.000% 12/31/05) 2,843,285 2,473,658
------------------------------------------- --- ---------- ----------
Broadcasting Total 23,920,321
Cable - 2.2%
- --------------------------- ------------------------------------------- --- ---------- ----------
Charter Communications Holding LLC:
(b) 04/01/11
(9.920% 04/01/04) 10,185,000 7,791,525
10.000% 04/01/09 795,000 659,850
10.250% 09/15/10(a) 1,130,000 1,151,188
Comcast UK Cable Partners Ltd.,
11.200% 11/15/07 5,140,000 5,165,700
CSC Holdings, Inc.,
7.625% 04/01/11 1,885,000 1,903,850
DirecTV Holdings LLC,
8.375% 03/15/13 1,800,000 2,036,250
EchoStar DBS Corp.,
6.375% 10/01/11(a) 3,560,000 3,560,000
Insight Communications, Inc.,
(b) 02/15/11
(12.250% 02/15/06) 2,485,000 1,969,362
Northland Cable Television, Inc.,
10.250% 11/15/07 2,835,000 2,806,650
Rogers Cable, Inc.,
6.250% 06/15/13 30,000 30,094
Shaw Communications, Inc.,
7.500% 11/20/13 CAD 2,250,000 1,718,551
------------------------------------------- --- ---------- ----------
Cable Total 28,793,020
See notes to investment portfolio.
20
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued)
Communication Services - 0.7% Par Value ($)
- ---------------------------------------- ----------------------------------- --- --------- ---------
Colt Telecom Group PLC,
12.000% 12/15/06 USD 1,370,000 1,366,575
Crown Castle International Corp.,
10.750% 08/01/11 1,200,000 1,332,000
Fairpoint Communications,
11.875% 03/01/10 1,670,000 1,962,250
Lucent Technologies, Inc.,
6.450% 03/15/29 2,100,000 1,590,750
SBA Communications Corp.,
10.250% 02/01/09 3,245,000 2,977,287
----------------------------------- --- --------- ---------
Communication Services Total 9,228,862
Electric, Gas & Sanitary Services - 0.4%
- ---------------------------------------- ----------------------------------- --- --------- ---------
Allied Waste North America, Inc.:
6.500% 11/15/10(a) 1,855,000 1,855,000
Series 2001 B,
8.500% 12/01/08 3,600,000 3,942,000
----------------------------------- --- --------- ---------
Electric, Gas & Sanitary Services Total 5,797,000
Electric Services - 2.5%
- ---------------------------------------- ----------------------------------- --- --------- ---------
AES Corp.:
9.000% 05/15/15(a) 2,685,000 2,926,650
9.500% 06/01/09 1,861,000 2,000,575
Beaver Valley Funding Corp.,
9.000% 06/01/17 2,260,000 2,581,485
Caithness Coso Funding Corp.,
9.050% 12/15/09 2,897,648 3,143,948
Calpine Corp.:
8.500% 07/15/10(a) 1,880,000 1,739,000
8.500% 02/15/11 2,405,000 1,743,625
8.625% 08/15/10 1,520,000 1,102,000
CMS Energy Corp.,
8.900% 07/15/08 2,360,000 2,504,550
Edison Mission Energy,
9.875% 04/15/11 2,290,000 2,301,450
Illinova Power Co.,
11.500% 12/15/10 850,000 1,003,000
MSW Energy Holdings Finance:
7.375% 09/01/10(a) 800,000 812,000
8.500% 09/01/10(a) 2,250,000 2,413,125
See notes to investment portfolio.
21
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued)
Electric Services - (continued) Par Value ($)
- --------------------------------------- ------------------------------------------- --- --------- ----------
Nevada Power Co.:
9.000% 08/15/13(a) USD 1,060,000 1,156,725
10.875% 10/15/09 2,025,000 2,288,250
PSE&G Energy Holdings, Inc.,
8.625% 02/15/08 2,495,000 2,650,938
Tiers-Mir-2001-14, Fixed Rate Certificates,
7.200% 06/15/04(a)(d) 2,430,000 1,190,700
UCAR Finance, Inc.,
10.250% 02/15/12 2,200,000 2,431,000
------------------------------------------- --- --------- ----------
Electric Services Total 33,989,021
Marine Services - 0.2%
- --------------------------------------- ------------------------------------------- --- --------- ----------
Stena AB:
7.500% 11/01/13(a)(h) 900,000 902,835
9.625% 12/01/12(a) 1,650,000 1,835,625
Trico Marine Services, Inc.,
8.875% 05/15/12 510,000 331,500
------------------------------------------- --- --------- ----------
Marine Services Total 3,069,960
Motor Freight & Warehousing - 0.6%
- --------------------------------------- ------------------------------------------- --- --------- ----------
Allied Holdings, Inc.,
8.625% 10/01/07 1,410,000 1,353,600
QDI Capital Corp.,
9.000% 11/15/10(a) 2,060,000 2,137,250
QDI LLC.:
12.000% 06/15/09 PIK(a)(f) 972,769 1,045,727
12.500% 06/15/08(a)(f) 3,978,000 4,060,742
------------------------------------------- --- --------- ----------
Motor Freight & Warehousing Total 8,597,319
Radio & Telephone Communications - 2.1%
- --------------------------------------- ------------------------------------------- --- --------- ----------
ACC Escrow Corp.,
10.000% 08/01/11(a) 1,430,000 1,565,850
AirGate PCS, Inc.,
(b) 10/01/09
(13.500% 10/01/04) 680,000 442,000
Avaya, Inc.,
11.125% 04/01/09 1,395,000 1,639,125
Cincinnati Bell, Inc.,
8.375% 01/15/14(a) 1,815,000 1,905,750
Dobson Communications Corp.,
8.875% 10/01/13(a) 2,580,000 2,596,125
Horizon PCS, Inc.,
13.750% 06/15/11(d) 2,975,000 669,375
See notes to investment portfolio.
22
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued)
Radio & Telephone Communications - (continued) Par Value ($)
- ---------------------------------------------- ------------------------------ --- --------- ----------
MCI Communications Corp.:
7.125% 06/15/27(d) USD 710,000 575,100
7.500% 08/20/04(d) 2,745,000 2,223,450
Nextel Communications, Inc.:
9.375% 11/15/09 4,695,000 5,105,812
9.750% 10/31/07
Nextel Partners, Inc.,
11.000% 03/15/10 2,425,000 2,679,625
Rogers Cantel, Inc.,
9.750% 06/01/16 4,025,000 4,749,500
US Unwired, Inc.,
(b) 11/01/09
(13.375% 11/01/04) 4,535,000 3,015,775
Western Wireless Corp.,
9.250% 07/15/13 1,175,000 1,216,125
------------------------------ --- --------- ----------
Radio & Telephone Communications Total 28,383,612
Railroad - 0.3%
- ---------------------------------------------- ------------------------------ --- --------- ----------
Kansas City Southern,
7.500% 06/15/09 1,410,000 1,441,725
TFM SA de CV,
12.500% 06/15/12(a) 2,210,000 2,447,575
------------------------------ --- --------- ----------
Railroad Total 3,889,300
Telecommunication Services - 1.7%
- ---------------------------------------------- ------------------------------ --- --------- ----------
American Towers, Inc.,
7.250% 12/01/11(a) 1,150,000 1,152,875
Carrier1 International SA,
13.250% 02/15/09(d) 6,000,000 540,000
Innova S. de R.L.,
9.375% 09/19/13(a) 590,000 604,013
Insight Midwest,
9.750% 10/01/09(a) 2,080,000 2,199,600
Level 3 Communications,
(b) 12/01/08
(10.500% 12/01/03) 2,370,000 2,215,950
Qwest Capital Funding:
7.250% 02/15/11 3,300,000 3,143,250
7.750% 02/15/31 2,315,000 2,037,200
Qwest Services Corp.,
13.500% 12/15/10(a) 3,730,000 4,382,750
Spectrasite, Inc.,
8.250% 05/15/10(a) 1,245,000 1,319,700
See notes to investment portfolio.
23
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
CORPORATE FIXED INCOME BONDS & NOTES - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - (continued)
Telecommunication Services - (continued) Par Value ($)
Time Warner Telecom LLC:
9.750% 07/15/08 USD 3,300,000 3,366,000
10.125% 02/01/11 850,000 879,750
Triton PCS, Inc.,
8.750% 11/15/11 780,000 748,800
---------------------------------------------- --- ---------- -----------
Telecommunication Services Total 22,589,888
---------- -----------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SERVICES TOTAL 181,482,320
Total Corporate Fixed Income Bonds & Notes
(cost of $512,437,236) 537,868,106
U.S. GOVERNMENT AGENCIES & OBLIGATIONS - 23.9%
Federal Home Loan Mortgage Corp.:
5.000% 08/25/10 8,600,000 8,741,805
7.500% 03/01/16 17,683 18,582
8.000% 04/01/06 - 05/01/16 133,457 140,505
8.500% 02/01/07 - 07/01/10 121,254 129,428
8.750% 05/01/05 - 07/01/08 19,105 20,483
9.000% 09/01/04 - 01/01/22 146,258 160,375
9.250% 08/01/08 - 09/01/16 104,504 115,187
9.500% 11/01/08 - 08/01/16 96,482 105,103
9.750% 12/01/08 - 09/01/16 19,214 21,014
10.000% 07/01/09 - 11/01/19 178,990 196,091
10.500% 11/01/11 - 10/01/24 107,673 120,961
10.750% 05/01/10 - 09/01/13 222,820 247,057
11.250% 10/01/10 - 11/01/15 176,352 197,953
---------------------------------------------- --- ---------- -----------
Federal Home Loan Mortgage Corp. Total 10,214,544
Federal National Mortgage Association:
7.500% 11/01/03 - 11/01/11 69,691 72,292
8.000% 07/01/08 - 07/01/09 77,230 80,782
8.250% 11/01/07 36,753 38,348
8.500% 05/01/08 - 09/01/21 242,923 260,326
9.000% 11/01/08 - 08/01/21 619,314 679,114
9.250% 05/01/16 99,955 111,178
10.000% 11/01/13 - 03/01/16 322,148 362,176
10.500% 09/01/07 - 03/01/16 303,044 338,692
To Be Announced,
6.500% 11/04/33(j) 60,590,000 63,165,075
---------- -----------
Federal National Mortgage Association Total 65,107,983
Government National Mortgage Association:
8.500% 02/15/06 4,860 5,179
9.000% 08/15/08 - 12/15/17 1,898,497 2,103,118
9.500% 06/15/09 - 11/15/17 918,889 1,009,538
10.000% 06/15/04 - 09/15/21 225,441 251,253
10.500% 12/15/10 - 04/15/21 63,173 70,986
11.000% 12/15/09 - 12/15/15 357,049 402,695
11.750% 08/15/13 9,326 10,590
12.000% 05/15/14 788 903
---------- -----------
Government National Mortgage Association Total 3,854,262
See notes to investment portfolio.
24
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
U.S. GOVERNMENT AGENCIES & OBLIGATIONS - (continued) Par Value ($)
U.S. Treasury Notes/Bonds:
7.500% 11/15/24 USD 12,000,000 15,527,808
8.875% 02/15/19 9,000,000 12,781,053
10.375% 11/15/12 52,000,000 66,188,304
10.625% 08/15/15 29,415,000 45,601,280
11.625% 11/15/04 23,600,000 25,871,500
12.000% 08/15/13 55,248,000 76,220,638
--------------------------------- ---------- ----------- -----------
U.S. Treasury Notes/Bonds Total 242,190,583
TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(cost of $334,916,001) 321,367,372
FOREIGN GOVERNMENT OBLIGATIONS - 33.3%
European Investment Bank,
7.625% 12/07/07 GBP 5,110,000 9,590,884
Government of Australia,
8.750% 08/15/08 AUD 27,555,000 22,223,741
Government of Canada:
5.500% 06/01/10 CAD 9,245,000 7,518,364
10.000% 06/01/08 24,110,000 23,095,048
Government of New Zealand:
6.000% 11/15/11 NZD 28,800,000 18,148,573
6.500% 04/15/13 27,600,000 17,926,309
Government of Sweden:
5.000% 01/28/09 SEK 153,580,000 20,838,203
5.500% 10/08/12 54,300,000 7,502,854
6.750% 05/05/14 35,625,000 5,380,805
Kingdom of Norway,
6.000% 05/16/11 NOK 129,800,000 20,370,671
Ministry Finance Russia,
12.750% 06/24/28 USD 4,410,000 6,923,700
Poland Government Bond,
8.500% 05/12/07 PLN 29,915,000 7,891,101
Republic of Brazil:
9.250% 10/22/10 USD 4,180,000 4,313,760
9.500% 01/24/11 EUR 3,750,000 4,645,282
11.000% 01/11/12 USD 2,000,000 2,230,000
11.000% 08/17/40 5,270,000 5,391,210
11.500% 04/02/09 EUR 4,250,000 5,629,227
12.750% 01/15/20 USD 4,650,000 5,661,375
14.500% 10/15/09 8,200,000 10,356,600
Republic of Bulgaria:
1.000% 07/28/24(e) 1,485,000 1,461,834
7.500% 01/15/13 EUR 7,770,000 10,389,433
See notes to investment portfolio.
25
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
FOREIGN GOVERNMENT OBLIGATIONS - (continued) Par Value ($)
Republic of Colombia:
9.750% 04/09/11 USD 7,230,510 8,043,942
10.000% 01/23/12 5,523,000 5,840,573
11.500% 05/31/11 EUR 3,010,000 4,028,346
Republic of France:
5.000% 10/25/16 8,060,000 9,995,148
5.500% 10/25/10 3,465,000 4,501,128
Republic of Germany:
5.375% 01/04/10 8,110,000 10,441,486
6.000% 07/04/07 10,280,000 13,336,310
Republic of Greece:
5.350% 05/18/11 GRD 10,000,000 12,759,245
8.600% 03/26/08 3,492,296 4,995,634
Republic of Italy,
5.250% 08/01/11 EUR 22,800,000 29,068,566
Republic of Peru,
9.875% 02/06/15 USD 6,100,000 7,060,750
Republic of Philippines,
8.250% 01/15/14 3,325,000 3,108,875
Republic of South Africa:
5.250% 05/16/13 EUR 7,230,000 8,296,865
13.000% 08/31/10 ZAR 73,960,000 13,888,265
Republic of Venezuela:
9.250% 09/15/27 USD 13,945,000 11,574,350
10.750% 09/19/13(a) 2,510,000 2,466,075
Russian Federation:
5.000% 03/31/30 13,210,000 12,376,449
11.000% 07/24/18 5,752,000 7,617,949
Treasury of Corp. Victoria,
7.500% 08/15/08 AUD 19,860,000 15,226,960
United Kingdom Treasury:
5.000% 03/07/12 GBP 4,840,000 8,306,026
7.500% 12/07/06 2,810,000 5,204,600
9.000% 07/12/11 4,750,000 10,223,147
United Mexican States:
7.500% 03/08/10 EUR 5,040,000 6,663,507
11.375% 09/15/16 USD 8,920,000 12,510,300
11.500% 05/15/26 2,685,000 3,846,263
------------------------------------ --- ---------- -----------
Total Foreign Government Obligations
(cost of $397,986,643) 448,869,733
------------------------------------ --- ---------- -----------
See notes to investment portfolio.
26
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Bonds & Notes - (continued)
Convertible Bonds - 0.5%
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.5% Par Value ($)
Communication Services - 0.2%
- --------------------------------------- ---------------------------- --- --------- -------------
Colt Telecom Group PLC
2.000% 03/29/06(a) EUR 1,615,000 2,053,852
2.000% 12/16/06(a) 750,000 954,287
Communication Services Total 3,008,139
Radio & Telephone Communications - 0.3%
- --------------------------------------- ---------------------------- --- --------- -------------
Nortel Networks Corp.,
4.250% 09/01/08 4,180,000 3,959,505
---------------------------- --- --------- -------------
Radio & Telephone Communications Total 3,959,505
--------- -------------
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES TOTAL 6,967,644
Total Convertible Bonds
(cost of $5,518,650) 6,967,644
Total Bonds & Notes
(cost of $1,250,858,530) 1,315,072,855
---------------------------- --- --------- -------------
Preferred Stocks - 1.0%
FINANCE, INSURANCE & REAL ESTATE - 0.3%
Real Estate - 0.3% Shares Value ($)
- --------------------------------------- ---------------------------------- - ------ ---------
iStar Financial:
7.800% 76,000 1,907,129
7.875% 65,180 1,670,237
---------------------------------- - ------ ---------
Real Estate Total 3,577,366
------ ---------
FINANCE, INSURANCE & REAL ESTATE TOTAL 3,577,366
MANUFACTURING - 0.1%
Food & Kindred Products - 0.0%
- --------------------------------------- ---------------------------------- - ------ ---------
Constellation Brands, Inc., 5.750% 14,950 482,138
------ ---------
Food & Kindred Products Total 482,138
Printing & Publishing - 0.1%
- --------------------------------------- ---------------------------------- - ------ ---------
Primedia, Inc.:
8.625% 165 14,932
9.200% 9,560 884,300
------ ---------
Printing & Publishing Total 899,232
---------------------------------- - ------ ---------
MANUFACTURING TOTAL 1,381,370
See notes to investment portfolio.
27
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.6%
Broadcasting - 0.2% Shares Value($)
- --------------------------------- --------------------------------------- - ------- ----------
Spanish Broadcasting System, 10.750%(a) 2,390 2,401,950
--------------------------------------- - ------- ----------
Broadcasting Total 2,401,950
Cable - 0.4%
- --------------------------------- --------------------------------------- - ------- ----------
CSC Holdings Ltd., PIK:
11.125% 30,244 3,198,303
11.750% 23,529 2,476,427
--------------------------------------- - ------- ----------
Cable Total 5,674,730
Pollution Control - 0.0%
- --------------------------------- --------------------------------------- - ------- ----------
EnviroSource, Inc., 7.250%(f) 1,787 205,505
--------------------------------------- - ------- ----------
Pollution Control Total 205,505
Telecommunication Services - 0.0%
- --------------------------------- --------------------------------------- - ------- ----------
NTL Europe, Inc., Series A, 10.000% 52 268
Telecommunication Services Total 268
------- ----------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES TOTAL 8,282,453
Total Preferred Stocks
(cost of $13,512,969) 13,241,189
Common Stocks - 0.3%
MINING & ENERGY - 0.0%
Oil & Gas Extraction - 0.0%
- --------------------------------- --------------------------------------- - ------- ----------
Forest Oil Corp. 8,215 205,786
Orion Refining Corp.(a)(f)(k)(l) 10 --
--------------------------------------- - ------- ----------
Oil & Gas Extraction Total 205,786
------- ----------
MINING & ENERGY TOTAL 205,786
SERVICES - 0.0%
Health Services - 0.0%
- --------------------------------- --------------------------------------- - ------- ----------
Kuala Healthcare Affiliates, Inc.(k) 176,666 177
--------------------------------------- - ------- ----------
Health Services Total 177
------- ----------
SERVICES TOTAL 177
See notes to investment portfolio.
28
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Common Stock - (continued)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES- 0.3%
Communication Services - 0.2% Shares Value ($)
- ----------------------------- -------------------------------------- - ------ ---------
NTL Europe, Inc., 31,451 2,049,347
Ono Finance PLC(a)(k) 8,000 8
Telus Corp. 1 18
-------------------------------------- - ------ ---------
Communication Services Total 2,049,373
Pollution Control - 0.1%
- ----------------------------- -------------------------------------- - ------ ---------
EnviroSource, Inc.(f)(k) 15,400 1,108,800
Fairlane Management Corp. (f)(k)(l) 15,400 --
-------------------------------------- - ------ ---------
Pollution Control Total 1,108,800
Telecommunication Services - 0.0%
- --------------------------------------- --------------------------------------------- ------ ---------
Adelphia Business Solutions, Inc., Class B(k) 19,695 158
Nextel Communications, Inc., Class A(k) 18,590 470,885
--------------------------------------------- ------ ---------
Telecommunication Services Total 471,043
--------------------------------------------- ------ ---------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 3,629,216
Total Common Stocks
(cost of $6,934,753) 3,835,179
Warrants (k) - 0.1% Units
FINANCE, INSURANCE & REAL ESTATE - 0.0%
Depository Institutions - 0.0%
- --------------------------------------- --------------------------------------------- ------ ---------
KMC Telecom Holdings, Inc.,
expires 01/31/08(a) 2,000 20
---------
Depository Institutions Total 20
--------------------------------------------- ------ ---------
FINANCE, INSURANCE & REAL ESTATE TOTAL 20
RETAIL TRADE - 0.0%
Food Stores - 0.0%
- --------------------------------------- --------------------------------------------- ------ ---------
Pathmark Stores, Inc.,
expires 09/19/10 32,317 31,671
---------
Food Stores Total 31,671
--------------------------------------------- ------ ---------
RETAIL TRADE TOTAL 31,671
See notes to investment portfolio.
29
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Warrants (k) - (continued) Units Value ($)
TRANSPORTATION, COMMUNICATIONS, ELECTRIC, GAS & SANITARY SERVICES - 0.1%
Cable - 0.0%
- ---------------------------------- --------------------------------------- ------ ---------
Cable Satisfaction International, Inc.,
expires 03/01/05 6,080 61
Ono Finance PLC,
expires 02/15/11(a) 2,050 21
---------
Cable Total 82
---------
Communications - 0.1%
- ---------------------------------- --------------------------------------- ------ ---------
Splitrock Services, Inc.,
expires 07/15/08 2,000 28,000
UbiquiTel, Inc.,
expires 04/15/10(a) 4,300 43
XM Satellite Radio Holdings, Inc.:
expires 12/31/09 545 981,000
expires 03/15/10(a) 2,000 41,500
---------
Communications Total 1,050,543
---------
Communication Services - 0.0%
- ---------------------------------- --------------------------------------- ------ ---------
iPCS, Inc.,
expires 07/15/10(a) 2,500 25
---------
Communication Services Total 25
Motor Freight & Warehousing - 0.0%
- ---------------------------------- --------------------------------------- ------ ---------
QDI LLC,
expires 01/15/07(a)(f) 11,840 181,507
---------
Motor Freight & Warehousing Total 181,507
Telecommunications - 0.0%
- ---------------------------------- --------------------------------------- ------ ---------
Carrier1 International SA,
expires 02/15/09(a)(d) 2,780 28
Horizon PCS, Inc.,
expires 10/01/10(a) 3,875 4
Jazztel PLC,
expires 07/15/10(a)(l) 1,250 --
AT&T Canada,
expires 08/15/07(a)(f)(l) 1,250 --
---------
Telecommunications Total 32
--------------------------------------- ------ ---------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 1,232,189
Total Warrants
(cost of $3,417,820) 1,263,880
See notes to investment portfolio.
30
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Short-Term Obligation - 3.8% Par Value ($)
- ---------------------------- --------------------------------------------- --------------- -------------
Repurchase agreement with State Street Bank
& Trust Co., dated 11/28/03, due 12/01/03 at
0.950%, collateralized by U.S. Treasury Bonds
with various maturities to 02/15/29, market
value $52,708,209 (repurchase proceeds
$51,674,091)
(cost of $51,670,000) USD 51,670,000 51,670,000
--------------------------------------------- --------------- -------------
Total Investments - 102.9%
(cost of $1,326,394,072)(n) 1,385,083,103
Other Assets & Liabilities, Net - (2.9)% (38,999,522)
Net Assets - 100.0% 1,346,083,581
Notesto Investment Portfolio:
(a)This security is exempt from registration
under Rule 144A of the Securities Act of
1933. These securities may be resold in
transactions exempt from registration,
normally to qualified institutional buyers.
At November 30, 2003, the value of these
securities amounted to $139,332,130, which
represents 10.4% of net assets.
(b)Stepped coupon bond. Currently accruing at
zero. Shown parenthetically is the next
interest rate to be paid and the date the
Fund will begin accruing this rate.
(c)Zero coupon bond.
(d)As of November 30, 2003, the Fund held
certain securities that have filed for
bankruptcy protection under Chapter 11,
representing 0.9% of net assets. Income is
not being accrued.
(e)Interest rates on variable rate securities
change periodically. The rate listed is as
of November 30, 2003.
(f)Represents fair value as determined in good
faith under procedures approved by the Board
of Trustees.
(g)This issuer is in default of certain debt
covenants. Income is not being accrued.
(h)This security has been purchased on a
delayed delivery basis.
(i)Income is not being accrued on this security.
(j)This security, or a portion thereof, has
been purchased on a delayed delivery basis
whereby the terms that are fixed are the
purchase price, interest rate and settlement
date. The exact quantity purchased may be
slightly more or less than the amount shown.
(k)Non-income producing.
(l)Security has no value.
(m)As of November 30, 2003, the Fund held
certain securities that have filed for
bankruptcy protection under Chapter 11,
representing 0.1% of net assets. Income is
being accrued.
(n)Cost for federal income tax purposes is
$1,349,764,154.
See notes to financial statements.
31
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
As of November 30, 2003, the Fund had entered into the following forward
foreign currency contracts:
Net Unrealized
Settlement Depreciation
Contracts to Deliver In Exchange For Date as of 11/30/03
CAD 2,250,000 USD 1,722,620 12/15/03 $ (10,369)
EUR 1,731,700 USD 1,986,528 12/08/03 (92,463)
EUR 13,480,000 USD 15,677,240 12/15/03 (487,234)
EUR 8,742,000 USD 10,420,464 12/24/03 (59,665)
EUR 4,462,500 USD 5,319,300 12/24/03 (30,457)
EUR 4,135,000 USD 4,928,920 12/24/03 (28,222)
EUR 16,898,000 USD 20,142,416 12/24/03 (115,331)
EUR 3,751,000 USD 4,471,192 12/24/03 (25,601)
GBP 3,530,000 USD 5,906,396 12/15/03 (165,040)
GBP 1,569,000 USD 2,668,241 12/24/03 (28,546)
GBP 518,000 USD 881,636 12/24/03 (8,699)
GBP 1,363,000 USD 2,318,463 12/24/03 (24,253)
NOK 24,888,000 USD 3,622,707 12/29/03 (22,022)
NOK 22,403,000 USD 3,265,267 12/29/03 (15,546)
-----------
$(1,113,448)
-----------
Acronym Name
AUD Australian Dollar
CAD Canadian Dollar
EUR Euro
GBP Great British Pound
GRD Greek Drachma
ITL Italian Lire
NOK Norwegian Krone
NZD New Zealand Dollar
PIK Payment-In-Kind
PLN Polish Zloty
SEK Swedish Krona
USD United States Dollar
ZAR South African Rand
See notes to investment portfolio.
32
STATEMENT OF ASSETS AND LIABILITIES
------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
($)
- -------------------------- ----------------------------------------------------------------- - -------------
Assets: Investments, at cost 1,326,394,072
Investments, at value 1,385,083,103
Cash 1,482,802
Foreign currency (cost of $463,185) 472,134
Receivable for:
Investments sold 3,638,738
Investments sold on a delayed delivery basis 236,900
Fund shares sold 826,757
Interest 27,793,344
Dividends 70,285
Deferred Trustees' compensation plan 35,231
Other assets 392,706
-------------
Total Assets 1,420,032,000
----------------------------------------------------------------- - -------------
Liabilities: Net unrealized depreciation on foreign forward currency contracts 1,113,448
Payable for:
Investments purchased 2,959,313
Investments purchased on a delayed delivery basis 66,627,155
Fund shares repurchased 1,232,277
Investment advisory fee 703,333
Transfer agent fee 488,288
Pricing and bookkeeping fees 52,521
Trustees' fees 281
Custody fee 98,407
Distribution and service fees 638,165
Deferred Trustees' fees 35,231
-------------
Total Liabilities 73,948,419
Net Assets 1,346,083,581
----------------------------------------------------------------- - -------------
Composition of Net Assets: Paid-in capital 1,650,580,350
Overdistributed net investment income (12,456,208)
Accumulated net realized loss (350,107,099)
Net unrealized appreciation (depreciation) on:
Investments 58,689,031
Foreign currency translations (622,493)
Net Assets 1,346,083,581
----------------------------------------------------------------- - -------------
Class A: Net assets 592,443,083
Shares outstanding 95,940,220
Net asset value per share 6.18(a)
Maximum offering price per share ($6.18/0.9525) 6.49(b)
----------------------------------------------------------------- - -------------
Class B: Net assets 460,096,033
Shares outstanding 74,553,005
Net asset value and offering price per share 6.17(a)
----------------------------------------------------------------- - -------------
Class C: Net assets 43,749,199
Shares outstanding 7,084,237
Net asset value and offering price per share 6.18(a)
----------------------------------------------------------------- - -------------
Class J: Net assets 249,082,727
Shares outstanding 40,407,589
Net asset value and redemption price per share 6.16(a)
Maximum offering price per share ($6.16/0.9700) 6.35(b)
----------------------------------------------------------------- - -------------
Class Z: Net assets 712,539
Shares outstanding 116,252
Net asset value, offering and redemption price per share 6.13
(a)Redemption price per share is equal to net
asset value less any applicable contingent
deferred sales charge.
(b)On sales of $50,000 or more the offering
price is reduced.
See notes to financial statements.
33
STATEMENT OF OPERATIONS
------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
($)
- ------------------------------------------ ------------------------------------------------------------------- ----------
Investment Income: Dividends 296,974
Interest 48,150,877
Dollar roll fee income 312,225
----------
Total Investment Income (net of foreign taxes withheld of $20,039) 48,760,076
------------------------------------------------------------------- ----------
Expenses: Investment advisory fee 4,303,447
Distribution fee:
Class B 1,756,589
Class C 164,899
Class J 438,317
Service fee:
Class A 700,370
Class B 558,265
Class C 52,367
Class J 298,953
Transfer agent fee 1,823,599
Pricing and bookkeeping fees 218,580
Trustees' fees 21,685
Custody fee 164,264
Other expenses 125,526
----------
Total Expenses 10,626,861
Fees waived by Distributor - Class C (32,961)
Custody earnings credit (3,181)
----------
Net Expenses 10,590,719
----------
Net Investment Income 38,169,357
------------------------------------------------------------------- ----------
Net Realized and Unrealized Gain (Loss) on Net realized gain (loss) on:
Investments and Foreign Currency: Investments 17,111,236
Foreign currency transactions (8,286,568)
----------
Net realized gain 8,824,668
Net change in unrealized appreciation/depreciation on:
Investments 4,419,616
Foreign currency translations 5,910,219
Net change in unrealized appreciation/depreciation 10,329,835
----------
Net Gain 19,154,503
----------
Net Increase in Net Assets from Operations 57,323,860
See notes to financial statements.
34
STATEMENTS OF CHANGES IN NET ASSETS
------------------------------
Columbia Strategic Income Fund
(unaudited)
Six Months Ended Period Ended
November 30, 2003 May 31,
Increase (Decrease) in Net Assets: ($) 2003 (a) ($)
- --------------------------------------- --------------------------------------------- ----------------- -------------
Operations: Net investment income 38,169,357 34,240,196
Net realized gain (loss) on investments and
foreign currency transactions 8,824,668 13,443,603
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations 10,329,835 92,604,312
----------------- -------------
Net Increase from Operations 57,323,860 140,288,111
--------------------------------------------- ----------------- -------------
Distributions Declared to Shareholders: From net investment income:
Class A (18,007,227) (15,184,183)
Class B (12,542,043) (10,942,373)
Class C (1,210,813) (1,015,241)
Class J (7,284,782) (6,687,799)
Class Z (22,247) (12,062)
Return of capital:
Class A -- --
Class B -- --
Class C -- --
Class J -- --
Class Z -- --
----------------- -------------
Total Distributions Declared to Shareholders (39,067,112) (33,841,658)
--------------------------------------------- ----------------- -------------
Share Transactions: Class A:
Subscriptions 32,661,700 28,881,303
Distributions reinvested 9,361,276 7,792,998
Redemptions (52,886,922) (39,518,059)
----------------- -------------
Net Decrease (10,863,946) (2,843,758)
--------------------------------------------- ----------------- -------------
Class B:
Subscriptions 25,146,569 32,599,690
Distributions reinvested 6,808,839 5,920,067
Redemptions (62,595,898) (47,619,346)
----------------- -------------
Net Decrease (30,640,490) (9,099,589)
--------------------------------------------- ----------------- -------------
Class C:
Subscriptions 4,685,282 6,567,113
Distributions reinvested 644,176 547,933
Redemptions (7,750,622) (3,831,655)
----------------- -------------
Net Increase (Decrease) (2,421,164) 3,283,391
--------------------------------------------- ----------------- -------------
Class J:
Subscriptions 2,020,961 4,260,615
Redemptions (14,370,252) (38,576,078)
----------------- -------------
Net Decrease (12,349,291) (34,315,463)
--------------------------------------------- ----------------- -------------
Class Z:
Subscriptions 308,159 1,247,878
Distributions reinvested 19,342 11,438
Redemptions (806,114) (108,415)
----------------- -------------
Net Increase (Decrease) (478,613) 1,150,901
--------------------------------------------- ----------------- -------------
Net Decrease from Share Transactions (56,753,504) (41,824,518)
----------------- -------------
Total Increase (Decrease) in Net Assets (38,496,756) 64,621,935
----------------- -------------
Net Assets: Beginning of period 1,384,580,337 1,319,958,402
----------------- -------------
End of period (overdistributed net investment
income of $(12,456,208), $(11,558,453) and
$(25,578,478), respectively) 1,346,083,581 1,384,580,337
----------------- -------------
Year Ended
December 31,
2002 ($)
- --------------------------------------------- -------------
Net investment income 87,534,488
Net realized gain (loss) on investments and
foreign currency transactions (102,998,317)
Net change in unrealized appreciation/
depreciation on investments and foreign
currency translations 113,060,240
-------------
Net Increase from Operations 97,596,411
- --------------------------------------------- -------------
From net investment income:
Class A (42,003,370)
Class B (32,234,724)
Class C (2,719,136)
Class J (20,199,908)
Class Z (44,973)
Return of capital:
Class A (2,370,220)
Class B (1,818,983)
Class C (153,439)
Class J (1,139,866)
Class Z (2,538)
-------------
Total Distributions Declared to Shareholders (102,687,157)
- --------------------------------------------- -------------
Class A:
Subscriptions 76,999,338
Distributions reinvested 22,577,921
Redemptions (120,669,061)
-------------
Net Decrease (21,091,802)
- --------------------------------------------- -------------
Class B:
Subscriptions 66,402,147
Distributions reinvested 18,557,348
Redemptions (159,845,033)
-------------
Net Decrease (74,885,538)
- --------------------------------------------- -------------
Class C:
Subscriptions 10,711,255
Distributions reinvested 1,596,012
Redemptions (16,138,332)
-------------
Net Increase (Decrease) (3,831,065)
- --------------------------------------------- -------------
Class J:
Subscriptions 7,970,201
Redemptions (59,088,986)
-------------
Net Decrease (51,118,785)
- --------------------------------------------- -------------
Class Z:
Subscriptions 31,748
Distributions reinvested 47,503
Redemptions (1,932,379)
-------------
Net Increase (Decrease) (1,853,128)
- --------------------------------------------- -------------
Net Decrease from Share Transactions (152,780,318)
-------------
Total Increase (Decrease) in Net Assets (157,871,064)
-------------
Beginning of period 1,477,829,466
-------------
End of period (overdistributed net investment
income of $(12,456,208), $(11,558,453) and
$(25,578,478), respectively) 1,319,958,402
-------------
(a)The Fund has changed its fiscal year end
from December 31 to May 31.
See notes to financial statements.
35
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
(unaudited) Period Ended Year Ended
Increase (Decrease) in Net Assets: Six Months Ended May 31, December 31,
(continued) November 30, 2003 2003 (a) 2002
- ---------------------------------- ------------------------------------ ----------------- ------------ ------------
Changes in Shares: Class A:
Subscriptions 5,381,023 4,991,280 13,798,283
Issued for distributions reinvested 1,545,107 1,347,649 4,075,545
Redemptions (8,737,223) (6,828,570) (21,765,079)
----------------- ------------ ------------
Net Decrease (1,811,093) (489,641) (3,891,251)
------------------------------------ ----------------- ------------ ------------
Class B:
Subscriptions 4,149,073 5,624,733 11,996,584
Issued for distributions reinvested 1,124,959 1,023,970 3,358,728
Redemptions (10,343,438) (8,229,830) (28,815,674)
----------------- ------------ ------------
Net Decrease (5,069,406) (1,581,127) (13,460,362)
------------------------------------ ----------------- ------------ ------------
Class C:
Subscriptions 774,346 1,130,031 1,930,151
Issued for distributions reinvested 106,330 94,722 287,824
Redemptions (1,280,266) (658,217) (2,910,443)
----------------- ------------ ------------
Net Increase (Decrease) (399,590) 566,536 (692,468)
------------------------------------ ----------------- ------------ ------------
Class J:
Subscriptions 331,541 724,787 1,438,451
Redemptions (2,370,080) (6,646,170) (10,581,690)
----------------- ------------ ------------
Net Decrease (2,038,539) (5,921,383) (9,143,239)
------------------------------------ ----------------- ------------ ------------
Class Z:
Subscriptions 50,753 212,751 5,811
Issued for distributions reinvested 3,207 1,948 8,620
Redemptions (134,107) (18,781) (344,889)
----------------- ------------ ------------
Net Increase (Decrease) (80,147) 195,918 (330,458)
------------------------------------ ----------------- ------------ ------------
(a)The Fund has changed its fiscal year end
from December 31 to May 31.
See notes to financial statements.
36
NOTES TO FINANCIAL STATEMENTS
------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Note 1. Organization
Columbia Strategic Income Fund (the "Fund"), a series of Columbia Funds Trust I
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
Investment Goal
The Fund seeks high current income consistent with prudent risk. The Fund also
seeks maximum total return.
Fund Shares
The Fund may issue an unlimited number of shares, and offers five classes of
shares: Class A, Class B, Class C, Class J and Class Z. Each share class has
its own sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 4.75% based
on the amount of initial investment. Class A shares purchased without an
initial sales charge are subject to a 1.00% contingent deferred sales charge
("CDSC") on shares sold within eighteen months on an original purchase of $1
million to $25 million. Class B shares are subject to a maximum CDSC of 5.00%
based upon the holding period after purchase. Class B shares will convert to
Class A shares in a certain number of years after purchase, depending on the
program under which shares were purchased. Class C shares are subject to a
1.00% CDSC on shares sold within one year after purchase. Class J shares are
subject to a 3% front-end sales charge and are available for purchase only by
residents or citizens of Japan. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
Effective October 13, 2003, the Fund changed its name from Liberty Strategic
Income Fund to Columbia Strategic Income Fund. Also on that date, the Trust
changed its name from Liberty Funds Trust I to Columbia Funds Trust I.
Note 2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
Security Valuation
Debt securities generally are valued by a pricing service approved by the
Trust's Board of Trustees, based upon market transactions for normal,
institutional-size trading units of similar securities. The services may use
various pricing techniques which take into account appropriate factors such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. Certain securities, which tend to be
more thinly traded and of lesser quality, are priced based on fundamental
analysis of the financial condition of the issuer and the estimated value of
any collateral. Valuations developed through pricing techniques may vary from
the actual amounts realized upon sale of the securities, and the potential
variation may be greater for those securities valued using fundamental
analysis. Debt securities for which quotations are readily available are valued
at an over-the-counter or exchange bid quotation.
Equity securities are valued at the last sale price at the close of the
principal exchange on which they trade. Unlisted securities or listed
securities for which there were no sales during the day are valued at the
closing bid price on such exchanges or over-the-counter markets.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market value.
Forward currency exchange contracts are valued at the prevailing forward
exchange rate of the underlying currencies.
Restricted securities and investments for which market quotations are not
readily available, which tend to be more thinly traded and of lesser quality
are valued at fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the Board of
Trustees. Foreign markets close each day at various times prior to the close of
the New York Stock Exchange ("NYSE"). Foreign
37
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
currency exchange rates are generally determined prior to the close of the NYSE
at 12:00 p.m. Eastern (U.S.) time. Occasionally, events affecting the value of
a foreign security may occur subsequent to the close of the exchange or market
which would not be reflected in the computation of the Fund's net asset value.
In such an event, the foreign security will be valued at the fair value.
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.
Forward Foreign Currency Exchange Contracts
Forward foreign currency exchange contracts are agreements to exchange one
currency for another at a future date at a specified price. These contracts are
used to minimize the exposure to foreign exchange rate fluctuations during the
period between trade and settlement date of the contracts. The Fund may utilize
forward foreign currency exchange contracts in connection with the settlement
of purchases and sales of securities. The Fund may also enter into these
contracts to hedge certain other foreign currency denominated assets. Contracts
to buy generally are used to acquire exposure to foreign currencies, while
contracts to sell are used to hedge the Fund's investments against currency
fluctuations. Forward currency contracts are valued daily at the current
exchange rate of the underlying currency, resulting in unrealized gains
(losses) which become realized at the time the foreign currency contracts are
closed or mature. Realized and unrealized gains (losses) arising from such
transactions are included in net realized and unrealized gains (losses) on
foreign currency transactions. The use of forward currency contracts does not
eliminate fluctuations in the prices of the Fund's portfolio securities. While
the maximum potential loss from such contracts is the aggregate face value in
U.S. dollars at the time the contract was opened, exposure is typically limited
to the change in value of the contract (in U.S. dollars) over the period it
remains open. A fund could also be exposed to risk if the counterparties of the
contracts are unable to fulfill the terms of the contracts. The Fund's
custodian will set aside cash or liquid portfolio securities equal to the
amount of the forward currency contract commitment in a separate account.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund,
through its custodian, receives delivery of underlying securities
collateralizing a repurchase agreement. Collateral securities are
marked-to-market daily to ensure that their market value is at least equal, at
all times to the repurchase price. (In the event that the market value of the
collateral securities declines below the repurchase price of the repurchase
agreement, additional securities will be required to be received.) A repurchase
agreement transaction involves certain risks in the event of default or
insolvency of the counterparty, including possible delays or restrictions upon
the Fund's ability to dispose of the underlying securities, and a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert its rights.
Restricted Securities
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from registration. In
some cases, the issuer of restricted securities has agreed to register such
securities for resale at the issuer's expense either upon demand by the Fund or
in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Board of Trustees. The Fund will not
incur any registration costs upon such resale.
Mortgage Dollar Roll Transactions
The Fund may enter into mortgage dollar roll transactions. A mortgage dollar
roll transaction involves a sale by the Fund of securities that it holds with
an agreement by the Fund to repurchase substantially similar securities at an
agreed upon price and date. During the period between the sale and repurchase,
the Fund will not be entitled to accrue interest and receive principal payment
on the securities sold. Mortgage dollar roll transactions involve the risk that
the market value of the securities sold by the Fund may decline below the
repurchase price of those securities. In the event the buyer of the securities
under a mortgage dollar roll transaction files for bankruptcy or becomes
insolvent, the Fund's use of proceeds of the transaction may be restricted
pending a determination by or with respect to the other party. The Fund
maintains U.S.
38
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Government securities or other liquid high grade debt obligations as collateral
with respect to mortgage dollar roll transactions.
Delayed Delivery Securities
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's custodian will
set aside cash or liquid portfolio securities equal to the amount of the
delayed delivery commitment in a separate account.
Income Recognition
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities. The value of
additional securities received as an income payment is recorded as income and
as the cost basis of such securities.
Foreign Currency Transactions
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions includes 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.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included
with the net realized and unrealized gains (losses) on investments.
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations) and realized and unrealized gains (losses) are
allocated to each class of the Fund on a daily basis for purposes of
determining the net asset value of each class. Income and expenses are
allocated to each class based on the settled shares method, while realized and
unrealized gains (losses) are allocated based on the relative net assets 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 or tax-exempt income, if any, for its tax
year, and as such will not be subject to federal income taxes. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, the Fund will not be
subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
Distributions to Shareholders
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually. Income and
capital gains dividends are determined in accordance with income tax
regulations and may differ from GAAP.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are
determined in accordance with income tax regulations, which may differ from
GAAP. Reclassifications are made to the Fund's capital accounts for permanent
tax differences to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
Unrealized appreciation (depreciation) at November 30, 2003, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $ 97,634,763
Unrealized depreciation (62,315,814)
------------
Net unrealized appreciation $ 35,318,949
-----------------------------------------
The following capital loss carryforwards are available to reduce taxable income
arising from future net realized gains on investments, if any, to the extent
permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforward
-----------------------
2007 $ 21,541,689
-----------------------
2008 63,518,542
-----------------------
2009 136,912,288
-----------------------
2010 135,415,014
-----------------------
2011 318,608
------------
$357,706,141
-----------------------
39
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
Expired capital loss carryforwards are recorded as a reduction of paid-in
capital.
Note 4. Fees and Compensation Paid to Affiliates
On April 1, 2003, Colonial Management Associates, Inc., the previous investment
advisor to the Fund, merged into Columbia Management Advisors, Inc.
("Columbia"), formerly known as Columbia Management Co., an indirect,
wholly-owned subsidiary of FleetBoston Financial Corporation. As a result of
the merger, Columbia now serves as the Fund's investment advisor. The merger
did not change the way the Fund is managed, the investment personnel assigned
to manage the Fund or the fees paid by the Fund.
Investment Advisory Fee
Columbia is the investment advisor to the Fund and provides administrative and
other services. Columbia receives a monthly fee based on the Fund's average
daily net assets at the following annual rates:
Average Daily Net Assets Fee Rate
---------------------------------
First $1 billion 0.65%
---------------------------------
Next $1 billion 0.60%
---------------------------------
Over $2 billion 0.55%
---------------------------------
For the six months ended November 30, 2003, the Fund's annualized effective
investment advisory fee rate was 0.64%.
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State
Street Corporation ("State Street").
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied
to the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services. For the six months ended November 30,
2003, the annualized effective pricing and bookkeeping fee rate was 0.03%.
Columbia pays the total fees collected to State Street under the Outsourcing
Agreement.
Transfer Agent Fee
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services for an annual fee of $34.00 per open account for
transfer agent fees. The Transfer Agent also receives reimbursement for certain
out-of-pocket expenses
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee at the annual rate of 0.06% of the Fund's average daily net
assets plus flat-rate charges based on the number of shareholder accounts and
transactions, in addition to reimbursement for certain out-of-pocket expenses.
For the six months ended November 30, 2003, the annualized effective transfer
agent fee rate, exclusive of out-of-pocket expenses, was 0.19%.
Effective October 13, 2003, Liberty Funds Services, Inc. changed it name to
Columbia Funds Services, Inc.
Underwriting Discounts, Service and Distribution Fees
Effective October 13, 2003, Liberty Funds Distributor, Inc. (the
"Distributor"), an affiliate of Columbia and the Fund's principal underwriter,
changed its name to Columbia Funds Distributor, Inc. For the six months ended
November 30, 2003, the Distributor retained net underwriting discounts of
$26,432 on sales of the Fund's Class A shares and received CDSC of $36,
$484,791 and $8,499 on Class A, Class B and Class C share redemptions,
respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor. The service fee is equal to 0.15%
annually of the average daily net assets attributable to outstanding Class A
and Class B shares issued prior to January 1, 1993 and 0.25% annually of the
average daily net assets attributable to outstanding Class A, Class B, Class C
and Class J shares issued thereafter. This arrangement results in a service fee
between the 0.15% and 0.25% annual rates. For the six months ended November 30,
2003, the Fund's effective annualized service fee rate was 0.24%.
40
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
The Plan also requires the payment of a monthly distribution fee to the
Distributor equal to 0.75% annually of the average daily net assets
attributable to Class B and Class C shares and 0.35% annually of the average
daily net assets attributable to Class J shares. The Distributor has
voluntarily agreed to waive a portion of the Class C share distribution fee so
that it will not exceed 0.60% annually.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
Fees Paid to Officers and Trustees
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
Note 5. Portfolio Information
Purchases and Sales of Securities
For the six months ended November 30, 2003, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $356,482,110
and $424,428,573, respectively of which $8,591,938 and $91,156,932,
respectively, were U.S. Government securities.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings.
In addition, the Fund has agreed to pay commitment fees on its pro-rata portion
of the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the six months ended November 30,
2003, the Fund did not borrow under these arrangements.
Note 7. Disclosure of Significant Risks and Contingencies
Industry focus
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
Foreign securities
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities. These
risks may involve foreign currency exchange rate fluctuations, adverse
political and economic developments and the possible prevention of currency
exchange or other foreign governmental laws or restrictions. In addition, the
liquidity of foreign securities may be more limited than that of domestic
securities.
High-yield securities
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. Government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk bonds." Economic
downturns may disrupt the high yield market and impair the ability of issuers
to repay principal and interest. Also, an increase in interest rates would
likely have an adverse impact on the value of such obligations. Moreover, high
yield securities may be less liquid due to the extent that there is no
established retail secondary market and because of a decline in the value of
such securities.
Legal Proceedings
Columbia, the Distributor and certain of their affiliates (collectively, "the
Columbia Group") have received information requests and subpoenas from various
regulatory authorities, including the Securities and Exchange Commission
("SEC") and the New York Attorney General, in connection with their
investigations of late trading and market timing in mutual funds. The Columbia
Group has not uncovered any instances where Columbia or the Distributor was
knowingly involved in late trading of mutual fund shares. The Columbia Group
41
has identified a limited number of investors who had informal arrangements for
trading certain Columbia Fund shares between 1998 and 2003. A substantial
majority of the trading had ended by October 2002. None of these arrangements
exists today. Information relating to those trading arrangements has been
supplied to various regulatory authorities. To the extent that any Columbia
Fund, whose shares were involved in those trading activities, was harmed by
them, the Columbia Group has undertaken to reimburse such Fund.
The SEC staff has issued notices to the effect that it has made a preliminary
determination to recommend that the SEC bring civil enforcement actions,
including injunctive proceedings, against Columbia and the Distributor,
alleging that they have violated certain provisions of the federal securities
laws. The Columbia Group believes that those allegations are based principally
on the trading arrangements referred to above. Columbia and the Distributor are
engaged in discussions with the SEC staff in an effort to reach a satisfactory
resolution of these matters. However, there can be no assurance that such a
resolution will be reached. Any potential resolution of these matters may
include, but not be limited to, sanctions, financial penalties, damages or
injunctions regarding Columbia or the Distributor, and structural changes in
the conduct of their business.
Although the Columbia Group does not believe that these regulatory developments
or their resolution will have a material adverse effect on the Columbia Funds,
or on the ability of Columbia and the Distributor to provide services to the
Columbia Funds, there can be no assurance that these matters or any adverse
publicity or other developments resulting from them will not result in
increased redemptions or reduced sales of Columbia Fund shares, which could
increase transactions costs or operating expenses, or other consequences for
the Columbia Funds.
Note 8. Comparability of Financial Statements
The Fund has changed its fiscal year end from December 31 to May 31.
42
- --------------------------------------------------------------------------------
November 30, 2003 (unaudited) Columbia Strategic Income Fund
FINANCIAL HIGHLIGHTS
------------------------------
Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended
November 30, May 31, Year Ended December 31,
Class A Shares 2003 2003 (a) 2002 2001 2000
- -------------------------------- ----- -------------------------------------------------------
Net Asset Value, Beginning of
Period $ 6.09 $ 5.63 $ 5.64 $ 6.00 $ 6.62
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Income from Investment Operations:
Net investment income 0.18 (b) 0.16 (b) 0.38 (b) 0.48(b)(c) 0.58 (d)
Net realized and
unrealized gain (loss) on
investments and foreign
currency 0.10 0.46 0.05 (0.30)(c) (0.62)
------------ -------- -------- -------- --------
Total from Investment
Operations 0.28 0.62 0.43 0.18 (0.04)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Less Distributions Declared to Shareholders:
From net investment
income (0.19) (0.16) (0.42) (0.50) (0.53)
Return of capital -- -- (0.02) (0.04) (0.05)
------------ -------- -------- -------- --------
Total Distributions
Declared to Shareholders (0.19) (0.16) (0.44) (0.54) (0.58)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Net Asset Value, End of Period $ 6.18 $ 6.09 $ 5.63 $ 5.64 $ 6.00
Total return (f) 4.63%(g) 11.10%(g) 7.97% 3.07% (0.68)%
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.22%(i) 1.27%(i) 1.23% 1.21% 1.17%
Net investment income (h) 5.98%(i) 6.52%(i) 6.75% 8.22%(c) 9.12%
Portfolio turnover rate 26%(g) 59%(g) 62% 106% 35%
Net assets, end of period
(000's) $592,443 $595,223 $552,737 $575,791 $536,481
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class A Shares 1999 1998
- ------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 7.11 $ 7.32
- ------------------------------ -------- - --------
Income from Investment Operations:
Net investment income 0.57 (d) 0.56
Net realized and
unrealized gain (loss) on
investments and foreign
currency (0.48) (0.19)
-------- --------
Total from Investment
Operations 0.09 0.37
- ------------------------------ -------- - --------
Less Distributions Declared to Shareholders:
From net investment
income (0.58)(e) (0.58)(e)
Return of capital -- --
-------- --------
Total Distributions
Declared to Shareholders (0.58) (0.58)
- ------------------------------ -------- - --------
Net Asset Value, End of Period $ 6.62 $ 7.11
Total return (f) 1.28% 5.17%
- ------------------------------ -------- - --------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.19% 1.15%
Net investment income (h) 8.30% 7.88%
Portfolio turnover rate 44% 64%
Net assets, end of period
(000's) $669,795 $787,461
- ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001 was to decrease the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and decrease the ratio of net investment
income to average net assets from 8.60% to 8.22%. Per share data and ratios
for periods prior to December 31, 2001 have not been restated to reflect
this change in presentation.
(d)The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e)Distributions from income include currency gains and gains on securities
treated as ordinary income for tax purposes.
(f)Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(g)Not annualized.
(h)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i)Annualized.
43
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended
November 30, May 31, Year Ended December 31,
Class B Shares 2003 2003(a) 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 6.09 $ 5.62 $ 5.63 $ 6.00 $ 6.62
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Income from Investment Operations:
Net investment income 0.16 (b) 0.14 (b) 0.34 (b) 0.44(b)(c) 0.53 (d)
Net realized and
unrealized gain (loss) on
investments and foreign
currency 0.08 0.47 0.04 (0.32)(c) (0.62)
------------ -------- -------- -------- --------
Total from Investment
Operations 0.24 0.61 0.38 0.12 (0.09)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Less Distributions Declared to Shareholders:
From net investment
income (0.16) (0.14) (0.37) (0.45) (0.48)
Return of capital -- -- (0.02) (0.04) (0.05)
------------ -------- -------- -------- --------
Total Distributions
Declared to Shareholders (0.16) (0.14) (0.39) (0.49) (0.53)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Net Asset Value, End of Period $ 6.17 $ 6.09 $ 5.62 $ 5.63 $ 6.00
Total return (f) 4.07%(g) 10.95%(g) 7.17% 2.12% (1.41)%
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.97%(i) 2.02%(i) 1.98% 1.96% 1.92%
Net investment income (h) 5.23%(i) 5.77%(i) 6.00% 7.47%(c) 8.37%
Portfolio turnover rate 26%(g) 59%(g) 62% 106% 35%
Net assets, end of period
(000's) $460,096 $484,540 $456,563 $533,406 $693,733
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class B Shares 1999 1998
- ------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 7.11 $ 7.32
- ------------------------------ -------- - --------
Income from Investment Operations:
Net investment income 0.51 (d) 0.51
Net realized and
unrealized gain (loss) on
investments and foreign
currency (0.48) (0.20)
-------- --------
Total from Investment
Operations 0.03 0.31
- ------------------------------ -------- - --------
Less Distributions Declared to Shareholders:
From net investment
income (0.52)(e) (0.52)(e)
Return of capital -- --
-------- --------
Total Distributions
Declared to Shareholders (0.52) (0.52)
- ------------------------------ -------- - --------
Net Asset Value, End of Period $ 6.62 $ 7.11
Total return (f) 0.52% 4.38%
- ------------------------------ -------- - --------
Ratios to Average Net Assets/Supplemental Data:
Expenses (h) 1.94% 1.90%
Net investment income (h) 7.55% 7.13%
Portfolio turnover rate 44% 64%
Net assets, end of period
(000's) $914,145 $919,740
- ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001 was to decrease the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and decrease the ratio of net investment
income to average net assets from 7.85% to 7.47%. Per share data and ratios
for periods prior to December 31, 2001 have not been restated to reflect
this change in presentation.
(d)The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e)Distributions from income include currency gains and gains on securities
treated as ordinary income for tax purposes.
(f)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(g)Not annualized.
(h)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i)Annualized.
44
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended
November 30, May 31, Year Ended December 31,
Class C Shares 2003 2003(a) 2002 2001 2000
- -------------------------------- ----- --------------------------------------------------------
Net Asset Value, Beginning of
Period $ 6.09 $ 5.63 $ 5.64 $ 6.00 $ 6.62
- ------------------------------ ------------ - ------- - ------- - ------- - ------- -
Income from Investment Operations:
Net investment income 0.16(b) 0.14(b) 0.35(b) 0.45(b)(c) 0.54(d)(e)
Net realized and unrealized
gain (loss) on investments and
foreign currency 0.10 0.46 0.04 (0.31)(c) (0.62)
------------ ------- ------- ------- -------
Total from Investment
Operations 0.26 0.60 0.39 0.14 (0.08)
- ------------------------------ ------------ - ------- - ------- - ------- - ------- -
Less Distributions Declared to Shareholders:
From net investment income (0.17) (0.14) (0.38) (0.46) (0.49)
Return of capital -- -- (0.02) (0.04) (0.05)
------------ ------- ------- ------- -------
Total Distributions Declared
to Shareholders (0.17) (0.14) (0.40) (0.50) (0.54)
- ------------------------------ ------------ - ------- - ------- - ------- - ------- -
Net Asset Value, End of Period $ 6.18 $ 6.09 $ 5.63 $ 5.64 $ 6.00
Total return (g) 4.32%(h)(i) 10.82%(h)(i) 7.32%(h) 2.45% (1.26)%(h)
- ------------------------------ ------------ - ------- - ------- - ------- - ------- -
Ratios to Average Net Assets/Supplemental Data:
Expenses (j) 1.82%(k) 1.87%(k) 1.83% 1.81% 1.77%(d)
Net investment income (j) 5.38%(k) 5.92%(k) 6.15% 7.62%(c) 8.52%(d)
Waiver/reimbursement 0.15%(k) 0.15%(k) 0.15% -- 0.15%
Portfolio turnover rate 26%(i) 59%(i) 62% 106% 35%
Net assets, end of period
(000's) $43,749 $45,572 $38,923 $42,906 $43,538
Class C Shares 1999 1998
- ------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 7.11 $ 7.32
- ------------------------------ ------- - -------
Income from Investment Operations:
Net investment income 0.52(d)(e) 0.52(d)
Net realized and unrealized
gain (loss) on investments and
foreign currency (0.48) (0.20)
------- -------
Total from Investment
Operations 0.04 0.32
- ------------------------------ ------- - -------
Less Distributions Declared to Shareholders:
From net investment income (0.53)(f) (0.53)(f)
Return of capital -- --
------- -------
Total Distributions Declared
to Shareholders (0.53) (0.53)
- ------------------------------ ------- - -------
Net Asset Value, End of Period $ 6.62 $ 7.11
Total return (g) 0.67%(h) 4.54%(h)
- ------------------------------ ------- - -------
Ratios to Average Net Assets/Supplemental Data:
Expenses (j) 1.79%(d) 1.75%(d)
Net investment income (j) 7.70%(d) 7.28%(d)
Waiver/reimbursement 0.15% 0.15%
Portfolio turnover rate 44% 64%
Net assets, end of period
(000's) $57,246 $36,918
(a)The Fund has changed its fiscal year end from December 31 to May 31.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001 was to decrease the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and decrease the ratio of net investment
income to average net assets from 8.00% to 7.62%. Per share data and ratios
for periods prior to December 31, 2001 have not been restated to reflect
this change in presentation.
(d)Net of fees waived by the Distributor which amounted to $0.02, $0.01 and
$0.01 per share and 0.15%, 0.15% and 0.15% for the periods ended December
31, 2000, 1999 and 1998, respectively.
(e)The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(f)Distributions from income include currency gains and gains on securities
treated as ordinary income for tax purposes.
(g)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(h)Had the Distributor not waived a portion of expenses, total return would
have been reduced.
(i)Not annualized.
(j)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k)Annualized.
45
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended
November 30, May 31, Year Ended December 31,
Class J Shares 2003 2003(a) 2002 2001 2000
- -------------------------------- - - - ---------------------------------------------------
Net Asset Value, Beginning of
Period $ 6.08 $ 5.62 $ 5.63 $ 6.00 $ 6.62
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Income from Investment Operations:
Net investment income 0.17 (c) 0.15 (c) 0.36 (c) 0.46(c)(d) 0.55 (e)
Net realized and unrealized
gain (loss) on investments
and foreign currency 0.09 0.46 0.05 (0.31)(d) (0.62)
------------ -------- -------- -------- --------
Total from Investment
Operations 0.26 0.61 0.41 0.15 (0.07)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Less Distributions Declared to Shareholders:
From net investment income (0.18) (0.15) (0.40) (0.48) (0.50)
Return of capital -- -- (0.02) (0.04) (0.05)
------------ -------- -------- -------- --------
Total Distributions Declared
to Shareholders (0.18) (0.15) (0.42) (0.52) (0.55)
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Net Asset Value, End of Period $ 6.16 $ 6.08 $ 5.62 $ 5.63 $ 6.00
Total return(h) 4.31%(i) 10.97%(i) 7.61% 2.56% (1.02)%
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Ratios to Average Net Assets/Supplemental Data:
Expenses (j) 1.57%(k) 1.62%(k) 1.58% 1.56% 1.52%
Net investment income (j) 5.63%(k) 6.17%(k) 6.40% 7.87%(d) 8.77%
Portfolio turnover rate 26%(i) 59%(i) 62% 106% 35%
Net assets, end of period
(000's) $249,083 $258,057 $271,733 $323,866 $508,079
- ------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class J Shares 1999 1998(b)
- ------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 7.10 $ 7.00
- ------------------------------ -------- - --------
Income from Investment Operations:
Net investment income 0.54 (e) 0.08
Net realized and unrealized
gain (loss) on investments
and foreign currency (0.47) 0.11 (f)
-------- --------
Total from Investment
Operations 0.07 0.19
- ------------------------------ -------- - --------
Less Distributions Declared to Shareholders:
From net investment income (0.55)(g) (0.09)(g)
Return of capital -- --
-------- --------
Total Distributions Declared
to Shareholders (0.55) (0.09)
- ------------------------------ -------- - --------
Net Asset Value, End of Period $ 6.62 $ 7.10
Total return(h) 1.07% 2.74%(i)
- ------------------------------ -------- - --------
Ratios to Average Net Assets/Supplemental Data:
Expenses (j) 1.54% 1.49%(k)
Net investment income (j) 7.95% 7.76%(k)
Portfolio turnover rate 44% 64%
Net assets, end of period
(000's) $568,311 $ 49,143
- ------------------------------ -------- - --------
(a)The Fund has changed its fiscal year end from December 31 to May 31.
(b)Class J shares were initially offered on November 2, 1998. Per share data
and total return reflect activity from that date.
(c)Per share data was calculated using average shares outstanding during the
period.
(d)Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001 was to decrease the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and decrease the ratio of net investment
income to average net assets from 8.25% to 7.87%. Per share data and ratios
for periods prior to December 31, 2001 have not been restated to reflect
this change in presentation.
(e)The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(f)The amount shown for a share outstanding does not correspond with the
aggregate net gain on investments for the period due to the timing of sales
and repurchases of Fund shares in relation to fluctuating market values of
the investments of the Fund.
(g)Distributions from income include currency gains and gains on securities
treated as ordinary income for tax purposes.
(h)Total return at net asset value assuming all distributions reinvested and no
initial sales charge.
(i)Not annualized.
(j)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(k)Annualized.
46
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended
November 30, May 31, Year Ended December 31,
Class Z Shares 2003 2003(a) 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 6.05 $ 5.59 $ 5.62 $ 5.99 $ 6.62
- ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Income from Investment Operations:
Net investment income 0.19(c) 0.17(c) 0.39(c) 0.49(c)(d) 0.59(e)
Net realized and unrealized gain
(loss) on investments and foreign
currency 0.08 0.45 0.03 (0.31)(d) (0.63)
------------ -------- -------- -------- --------
Total from Investment
Operations 0.27 0.62 0.42 0.18 (0.04)
- ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Less Distributions Declared to Shareholders:
From net investment income (0.19) (0.16) (0.43) (0.51) (0.54)
Return of capital -- -- (0.02) (0.04) (0.05)
------------ -------- -------- -------- --------
Total Distributions Declared
to Shareholders (0.19) (0.16) (0.45) (0.55) (0.59)
- ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Net Asset Value, End of Period $ 6.13 $ 6.05 $ 5.59 $ 5.62 $ 5.99
Total return (g) 4.62%(h) 11.29%(h) 7.87% 3.14% (0.59)%
- ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Ratios to Average Net Assets/Supplemental Data:
Expenses (i) 0.98%(j) 1.03%(j) 0.99% 0.98% 0.93%
Net investment income (i) 6.23%(j) 6.76%(j) 6.99% 8.45%(d) 9.36%
Portfolio turnover rate 26%(h) 59%(h) 62% 106% 35%
Net assets, end of period (000's) $ 713 $ 1,188 $ 3 $ 1,860 $ 1
- ------------------------------------ ------------ - -------- - -------- - -------- - -------- -
Class Z Shares 1999(b)
- -------------------------------------------------
Net Asset Value, Beginning of Period $ 7.10
- ------------------------------------ --------
Income from Investment Operations:
Net investment income 0.53(e)
Net realized and unrealized gain
(loss) on investments and foreign
currency (0.47)
--------
Total from Investment
Operations 0.06
- ------------------------------------ --------
Less Distributions Declared to Shareholders:
From net investment income (0.54)(f)
Return of capital --
--------
Total Distributions Declared
to Shareholders (0.54)
- ------------------------------------ --------
Net Asset Value, End of Period $ 6.62
Total return (g) 1.50%(h)
- ------------------------------------ --------
Ratios to Average Net Assets/Supplemental Data:
Expenses (i) 0.95%(j)
Net investment income (i) 8.54%(j)
Portfolio turnover rate 44%
Net assets, end of period (000's) $ 4,928
- ------------------------------------ --------
(a)The Fund has changed its fiscal year end from December 31 to May 31.
(b)Class Z shares were initially offered on January 29, 1999. Per share data
and total return reflect activity from that date.
(c)Per share data was calculated using average shares outstanding during the
period.
(d)Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001 was to decrease the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and decrease the ratio of net investment
income to average net assets from 8.84% to 8.45%. Per share data and ratios
for periods prior to December 31, 2001 have not been restated to reflect
this change in presentation.
(e)The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(f)Distributions from income include currency gains and gains on securities
treated as ordinary income for tax purposes.
(g)Total return at net asset value assuming all distributions reinvested.
(h)Not annualized.
(i)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j)Annualized.
47
IMPORTANT INFORMATION ABOUT THIS REPORT
------------------------------
Columbia Strategic Income Fund
Transfer Agent
Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611
Distributor
Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111
Investment Advisor
Columbia Management Advisors, Inc 100 Federal Street Boston MA 02111
Auditor
PricewaterhouseCoopers LLP
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Strategic Income
Fund. This report may also be used as sales literature when preceded or
accompanied by the current prospectus which provides details of sales charges,
investment objectives and operating policies of the fund and with the most
recent copy of the Columbia Funds Performance update.
A description of the policies and procedures that the fund uses to determine
how to vote proxies relating to its portfolio securities is available (i)
without charge, upon request, by calling 800-345-6611 and (ii) on the
Securities and Exchange Commission's website at http://www.sec.gov.
48
COLUMBIA FUNDS
------------------------------
Columbia Strategic Income Fund
- --------------------- ---------------------------------------------------------------------------
Large Growth Columbia Common Stock
Columbia Growth
Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
---------------------------------------------------------------------------
Large Value Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
---------------------------------------------------------------------------
Midcap Growth Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
---------------------------------------------------------------------------
Midcap Value Columbia Dividend Income
Columbia Mid Cap
Columbia Strategic Investor
---------------------------------------------------------------------------
Small Growth Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
---------------------------------------------------------------------------
Small Value Columbia Small Cap
Columbia Small-Cap Value
---------------------------------------------------------------------------
Balanced Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
---------------------------------------------------------------------------
Specialty Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
---------------------------------------------------------------------------
Taxable Fixed-Income Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
---------------------------------------------------------------------------
Floating Rate Columbia Floating Rate
Columbia Floating Rate Advantage
---------------------------------------------------------------------------
Tax Exempt Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
49
- --------------------------------------------------------------------------------
Columbia Strategic Income Fund
- ------------------------ ---------------------------------------------------------------------------
Single State Tax Exempt Columbia California Tax-ExemptColumbia
Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond
Columbia Rhode Island Intermediate Municipal Bond
---------------------------------------------------------------------------
Money Market Columbia Money Market
Columbia Municipal Money Market
---------------------------------------------------------------------------
International/Global Columbia Acorn International
Columbia Acorn International Select
Columbia Europe
Columbia Global Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Greater China
Columbia Newport Japan Opportunities*
Columbia Newport Tiger
---------------------------------------------------------------------------
Index Funds Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
Columbia funds are offered only by
prospectus. Please see your financial
advisor for a prospectus, which describes in
detail fund objectives, investment policies,
risks, sales charges, fees, liquidity and
other matters of interest. Please read the
prospectus carefully before you invest or
send money.
*Asof October 17, 2003, this fund is closed to
new investors. It is scheduled for
liquidation on December 5, 2003.
For complete product information on any
Columbia fund, visit our website at
www.columbiafunds.com.
Columbia Management Group and Columbia
Management refer collectively to the various
investment advisory subsidiaries of Columbia
Management Group, including Columbia
Management Advisors, Inc., the registered
investment advisor, and to Columbia Funds
Distributor, Inc.
50
[LOGO]
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Strategic Income Fund Semiannual Report, November 30, 2003
[LOGO] (R) ColumbiaFunds [US POSTAGE STAMP]
A Member of Columbia Management Group
(c)2003 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 WWW.columbiafunds.com
[photo of woman in park]
COLUMBIA HIGH YIELD
OPPORTUNITY FUND
Semiannual Report
November 30, 2003
WE ARE COLUMBIA FUNDS!
INSIDE - Management's discussion of the changes effective October 13, 2003
PRESIDENT'S MESSAGE
Columbia High Yield Opportunity Fund
[photo of Joseph R. Palombo]
DEAR SHAREHOLDER:
As you know, your fund has long been part of a larger investment management
organization. In the 1990s, it was part of Liberty Financial, whose affiliated
asset management companies included Colonial, Stein Roe and Newport. In 2001,
these companies became part of the asset management division of FleetBoston
Financial Corp., which you know as Columbia Management Group (CMG).
Earlier this year, six of the asset management firms brought together under the
CMG umbrella were consolidated and renamed Columbia Management Advisors, Inc. On
October 13, 2003, we took the natural next step in this process by changing the
name of our funds from Liberty to Columbia and modifying certain fund names that
existed under both the Liberty and Columbia brands. For example, Liberty High
Yield Securities Fund was changed to Columbia High Yield Opportunity Fund. A
complete list of new fund names and other information related to these changes
are available online at our new website address: www.columbiafunds.com.
A CONSOLIDATED IDENTITY
The consolidation of our management under a single organization and the renaming
of our funds are part of a larger effort to create a consistent identity. Having
taken these additional steps, we believe it will be easier for shareholders to
do business with us. All funds are now listed under "Columbia" in the mutual
fund listings section of your newspaper (depending on the newspaper's listing
requirements). All service inquiries are now handled by Columbia Funds Services,
Inc., the new name of our shareholder service organization.
What has not changed is our commitment to our mutual fund shareholders. We
remain committed to providing the best possible customer service and to offering
a wide variety of mutual funds to help you pursue your long-term financial
goals. Should you have questions, please call Columbia Funds at 800-345-6611.
In the report that follows, portfolio managers Thomas A. LaPointe and Kevin L.
Cronk discuss in depth the investment strategies and other factors that affected
your fund's performance during the period. We encourage you to read the report
carefully.
As always, we thank you for investing in Columbia funds, and we look forward to
continuing to serve your investment needs in the years ahead.
Sincerely,
/s/ Joseph R. Palombo
Joseph R. Palombo
President
Table of Contents
Fund Profile ..................................................................1
Performance Information .......................................................2
Economic Update ...............................................................3
Portfolio Managers' Report ....................................................4
Financial Statements ..........................................................6
Investment Portfolio .......................................................7
Statement of Assets and Liabilities .......................................26
Statement of Operations ...................................................27
Statements of Changes in Net Assets .......................................28
Notes to Financial Statements .............................................30
Financial Highlights ......................................................35
Trustees .....................................................................39
Officers .....................................................................42
Important Information About This Report ......................................43
Columbia Funds ...............................................................44
Economic and market conditions change frequently. There is no assurance that the
trends described in this report will continue or commence.
NOT FDIC INSURED
MAY LOSS VALUE
NO BANK GUARANTEE
FUND PROFILE
Columbia High Yield Opportunity Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Because your fund is actively managed, there is no guarantee
that these breakdowns and percentages will be maintained in the future.
Quality breakdown as of 11/30/03 (%)
AAA 0.5
- --------------------------------------
BBB 0.3
- --------------------------------------
BB 16.2
- --------------------------------------
B 55.6
- --------------------------------------
CCC 17.0
- --------------------------------------
CC 5.4
- --------------------------------------
D 0.6
- --------------------------------------
Non-rated 4.4
- --------------------------------------
Portfolio structure as of 11/30/03 (%)
Corporate bonds 93.0
- --------------------------------------
Preferred stocks 2.3
- --------------------------------------
Common stocks 1.4
- --------------------------------------
Convertible bonds 1.2
- --------------------------------------
Repurchase agreement 0.5
- --------------------------------------
Warrants 0.2
- --------------------------------------
Top 10 issuers as of 11/30/03 (%)
Charter Communications 1.5
- --------------------------------------
Huntsman ICI Holdings 1.5
- --------------------------------------
CSC Holdings 1.2
- --------------------------------------
Nextel Communications 1.2
- --------------------------------------
Qwest Capital Funding 1.2
- --------------------------------------
Williams Companies 1.0
- --------------------------------------
Pinnacle Entertainment 0.9
- --------------------------------------
Amscan Holdings 0.9
- --------------------------------------
Allied Waste North America 0.9
- --------------------------------------
AES 0.9
- --------------------------------------
Maturity breakdown as of 11/30/03 (%)
[bar chart data]
0-3 years 2.5
3-5 years 16.1
5-7 years 31.4
7-10 years 44.5
10-15 years 4.2
20-30 years 0.8
Repurchase agreement 0.5
Quality breakdown is calculated as a percentage of total investments. Ratings
shown in the quality breakdown represent the highest rating assigned to a
particular bond by one of the following nationally recognized rating agencies:
Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch
Investors Service, Inc.
Maturity breakdown is based on each security's effective maturity, which
reflects pre-refundings, mandatory puts and other conditions that affect a
bond's maturity. Maturity breakdown is calculated as a percentage of
investments. Portfolio structure and top 10 issuers are calculated as a
percentage of net assets.
(C) 2004 Morningstar, Inc. All Rights Reserved. The information contained
herein: (1) is proprietary to Morningstar and/or its content providers; (2) may
not be copied or distributed; and (3) 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.
The Morningstar Style Box(TM) reveals a fund's investment strategy. For equity
funds the vertical axis shows the market capitalization of the stocks owned and
the horizontal axis shows investment style (value, blend or growth). For
fixed-income funds the vertical axis shows the average credit quality of the
bonds owned, and the horizontal axis shows interest rate sensitivity as measured
by a bond's duration (short, intermediate or long). All of these numbers are
drawn from the data most recently provided by the fund and entered into
Morningstar's database as of month-end. Although the data are gathered from
reliable sources, Morningstar cannot guarantee completeness and accuracy. As of
11/30/2003.
SUMMARY
.. FOR THE SIX-MONTH PERIOD ENDED NOVEMBER 30, 2003, THE FUND'S CLASS A SHARES
(WITHOUT SALES CHARGE) RETURNED 10.43%.
.. THE FUND'S RETURN WAS BETTER THAN BOTH ITS BENCHMARKS AND THE AVERAGE
RETURN OF ITS PEER GROUP, THE LIPPER HIGH CURRENT YIELD FUNDS CATEGORY.
.. OUR DECISION TO ADD TO LOWER-RATED HIGH-YIELD BONDS BENEFITED PERFORMANCE,
BECAUSE THESE SECURITIES EARNED THE STRONGEST RETURNS WITHIN THE HIGH-YIELD
SECTOR DURING THE PERIOD.
OBJECTIVE
Seeks high current income
and total return
TOTAL NET ASSETS
$776.7 million
CS First Boston
Class A shares High Yield Index
10.43% 9.70%
[Maturity/Quality chart :: Intermediate Maturity/Low Quality]
1
PERFORMANCE INFORMATION
Columbia High Yield Opportunity Fund
Value of a $10,000 investment 12/01/93 - 11/30/03
[mountain chart data]
JP Morgan CS First Class A Class A
Global High Boston High shares with shares without
Yield Index Yield Index sales charge sales charge
12/1993 $ 10000.00 $ 10000.00 $ 10000.00 $ 9525.00
10120.00 10126.00 10123.00 9642.00
10327.50 10306.00 10378.00 9885.00
10292.40 10322.00 10381.00 9888.00
9939.32 10018.00 10148.00 9666.00
9829.99 9884.00 9986.00 9512.00
9887.00 9940.00 10034.00 9558.00
9848.44 9874.00 10082.00 9603.00
9863.21 9920.00 10085.00 9606.00
9902.67 9992.00 10088.00 9609.00
9901.68 10032.00 10107.00 9627.00
9916.53 10039.00 10094.00 9615.00
9825.30 9922.00 10004.00 9528.00
10120.10 10027.00 10087.00 9608.00
10249.60 10133.00 10185.00 9702.00
10614.50 10382.00 10447.00 9951.00
10721.70 10499.00 10515.00 10016.00
10998.30 10732.00 10764.00 10253.00
11311.80 11035.00 10999.00 10477.00
11357.00 11108.00 11052.00 10527.00
11534.20 11280.00 11239.00 10705.00
11579.10 11311.00 11258.00 10723.00
11717.00 11442.00 11430.00 10887.00
11825.90 11569.00 11569.00 11020.00
11902.80 11623.00 11640.00 11087.00
12095.60 11771.00 11867.00 11303.00
12325.40 11994.00 12078.00 11504.00
12399.40 12058.00 12184.00 11606.00
12358.50 12025.00 12077.00 11504.00
12435.10 12090.00 12150.00 11573.00
12529.60 12188.00 12241.00 11659.00
12583.50 12215.00 12241.00 11659.00
12667.80 12325.00 12314.00 11729.00
12855.30 12459.00 12536.00 11940.00
13159.90 12673.00 12872.00 12260.00
13281.00 12780.00 12872.00 12260.00
13525.40 12979.00 13118.00 12495.00
13670.10 13232.00 13318.00 12686.00
13778.10 13329.00 13434.00 12796.00
14015.10 13580.00 13725.00 13073.00
13786.60 13427.00 13451.00 12812.00
13916.20 13547.00 13589.00 12943.00
14237.70 13819.00 13926.00 13264.00
14425.60 14007.00 14146.00 13474.00
14809.30 14304.00 14487.00 13798.00
14818.20 14381.00 14527.00 13837.00
15113.10 14666.00 14873.00 14166.00
15092.00 14665.00 14873.00 14166.00
15227.80 14769.00 14996.00 14284.00
15364.80 14903.00 15166.00 14445.00
15603.00 15157.00 15480.00 14744.00
15723.10 15275.00 15565.00 14825.00
15881.90 15351.00 15756.00 15008.00
15961.30 15466.00 15799.00 15048.00
15983.70 15513.00 15821.00 15069.00
16017.20 15545.00 15886.00 15131.00
16151.80 15654.00 16078.00 15314.00
15105.20 14591.00 15018.00 14305.00
15090.00 14590.00 14889.00 14182.00
14765.60 14299.00 14630.00 13935.00
15579.20 15024.00 15591.00 14851.00
15515.30 14990.00 15493.00 14757.00
15701.50 15131.00 15750.00 15002.00
15621.40 15099.00 15769.00 15020.00
15813.60 15236.00 16082.00 15318.00
16215.20 15573.00 16361.00 15584.00
13361.40 15405.00 16055.00 15293.00
15984.20 15413.00 16149.00 15381.00
15989.00 15420.00 16199.00 15429.00
15829.10 15283.00 16126.00 15360.00
15715.10 15165.00 16050.00 15288.00
15628.70 15091.00 16077.00 15314.00
15883.40 15296.00 16347.00 15571.00
16039.10 15481.00 16450.00 15669.00
15978.10 15419.00 16268.00 15495.00
16042.10 15515.00 16515.00 15730.00
15769.40 15282.00 16264.00 15491.00
15766.20 15259.00 16158.00 15391.00
15542.30 15015.00 15850.00 15097.00
15848.50 15352.00 15978.00 15219.00
15988.00 15496.00 16139.00 15373.00
16111.10 15600.00 16299.00 15525.00
15900.00 15456.00 16027.00 15266.00
15434.10 14975.00 15327.00 14599.00
14844.60 14385.00 14447.00 13761.00
15105.80 14675.00 14755.00 14054.00
16021.20 15555.00 15919.00 15163.00
16207.10 15712.00 15965.00 15206.00
15889.40 15399.00 15350.00 14621.00
15722.60 15239.00 14991.00 14279.00
16030.80 15544.00 15129.00 14410.00
15753.40 15303.00 14475.00 13788.00
15912.50 15467.00 14464.00 13777.00
16119.40 15683.00 14571.00 13879.00
15055.50 14695.00 13402.00 12766.00
15430.40 15030.00 13886.00 13226.00
15955.00 15516.00 14375.00 13692.00
15934.30 15525.00 14345.00 13663.00
16050.60 15670.00 14494.00 13805.00
15930.20 15558.00 14237.00 13561.00
16290.20 15915.00 14484.00 13796.00
16537.90 16168.00 14605.00 13911.00
16481.60 16111.00 14407.00 13722.00
15888.30 15550.00 13688.00 13038.00
15446.60 15106.00 13309.00 12676.00
15588.70 15302.00 13355.00 12721.00
15406.30 15114.00 13235.00 12606.00
15295.40 15022.00 13097.00 12475.00
16087.70 15816.00 13634.00 12987.00
16274.30 16009.00 13732.00 13080.00
16697.50 16445.00 14003.00 13338.00
16941.20 16688.00 14172.00 13499.00
17349.50 17115.00 14447.00 13761.00
18210.00 17990.00 15178.00 14457.00
18463.20 18251.00 15245.00 14521.00
19002.30 18784.00 15667.00 14923.00
18882.60 18632.00 15556.00 14817.00
19069.50 18840.00 15696.00 14951.00
19597.70 19355.00 16162.00 15395.00
19962.30 19749.00 16486.00 15703.00
11/2003 20233.00 20018.00 16828.00 16028.00
The above illustration assumes a $10,000 investment made on December 1, 1993,
and reinvestment of income and capital gains distributions. The CS First Boston
High Yield Index is a broad-based, unmanaged index that tracks the performance
of high-yield bonds. The JP Morgan Global High Yield Index is designed to mirror
the investable universe of the US dollar global high-yield corporate debt
market, including domestic and international issues. Unlike the fund, indices
are not investments, do not incur fees or expenses and are not professionally
managed. It is not possible to invest directly in an index. Securities in the
fund may not match those in an index.
Average annual total return as of 11/30/03 (%)
Share class A B C Z
- -----------------------------------------------------------------------------
Inception 10/21/71 6/8/92 1/15/96 1/8/99
- -----------------------------------------------------------------------------
Sales charge without with without with without with without
- -----------------------------------------------------------------------------
6-month (cumulative) 10.43 5.18 10.02 5.02 10.11 9.11 10.56
- -----------------------------------------------------------------------------
1-year 23.47 17.61 22.57 17.57 22.75 21.75 23.77
- -----------------------------------------------------------------------------
5-year 1.54 0.56 0.80 0.54 0.95 0.95 1.79
- -----------------------------------------------------------------------------
10-year 5.34 4.83 4.55 4.55 4.82 4.82 5.47
- -----------------------------------------------------------------------------
Average annual total return as of 09/30/03 (%)
Share class A B C Z
- -----------------------------------------------------------------------------
Sales charge without with without with without with without
- -----------------------------------------------------------------------------
6-month (cumulative) 11.88 6.56 11.47 6.47 11.55 10.55 12.02
- -----------------------------------------------------------------------------
1-year 22.12 16.32 21.23 16.23 21.40 20.40 22.42
- -----------------------------------------------------------------------------
5-year 1.65 0.67 0.89 0.63 1.04 1.04 1.89
- -----------------------------------------------------------------------------
10-year 5.31 4.80 4.52 4.52 4.80 4.80 5.44
- -----------------------------------------------------------------------------
All results shown assume reinvestment of distributions. The graph and table do
not reflect the deduction of taxes that a shareholder would pay on fund
distributions or redemption of fund shares. The "with sales charge" returns
include the maximum 4.75% charge for class A shares, the appropriate class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year - 5%, second year - 4%, third year - 3%, fourth year
- - 3%, fifth year - 2%, sixth year - 1%, thereafter - 0%, and the class C
contingent deferred sales charge of 1% for the first year only.
Performance results reflect any voluntary waivers or reimbursement of fund
expenses by the advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower. Performance for
different share classes will vary based on differences in sales charges and fees
associated with each class.
Classes C and Z share (newer class shares) performance information includes
returns of the fund's class A shares (the oldest existing fund class) for
periods prior to the inception of the newer class shares. The class A share
returns are not restated to reflect any expense differential (e.g., Rule 12b-1
fees) between class A shares and the newer class shares. Had the expense
differential been reflected, the returns for the periods prior to the inception
of class C shares would have been lower, and class Z shares would have been
higher.
Performance of a $10,000 investment
12/01/93 - 11/30/03 ($)
sales charge without with
Class A 16,828 16,028
Class B 15,610 15,610
Class C 16,015 16,015
Class Z 17,034 n/a
Past performance does not guarantee future investment results. Current
performance may be lower or higher than the performance data shown. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
2
ECONOMIC UPDATE
Columbia High Yield Opportunity Fund
After struggling for two years to maintain solid, forward movement, the US
economy steamed ahead during the six-month period that ended November 30, 2003.
The Fed's efforts to stimulate the economy through low short-term interest rates
were finally rewarded, but the significant upswing in growth was the result of a
combination of factors. A sizable tax package gave disposable income a boost.
Income taxes fell across all tax brackets, and many taxpayers received rebate
checks during the summer months. Corporate profits rose sharply, and orders for
durable goods exceeded expectations late in the period. Consumer confidence
continued to climb, although not without an occasional setback. Generally
speaking, consumer spending increased and the outlook for holiday spending was
strong.
Economists began to grow optimistic that growth for the third quarter of 2003
would reflect this renewed vigor, but no one seemed prepared for how
extraordinary that growth might be. When gross domestic product (GDP) for the
third quarter was reported at 7.2%, then revised upward to 8.2%, it was clear
that the economy was firing on all cylinders. The business sector had finally
kicked into gear. Industrial production rose in the second half of 2003 and
business spending--especially on technology-related items--showed strength. Even
the jobs picture brightened by the end of November. After unemployment peaked at
6.4% earlier in the year, it declined to 5.9%.
The US stock market, which had come to life at the end of March, headed sharply
higher in the second half of the year. The S&P 500 Index returned 10.80% for the
six-month period as all major sectors of the market benefited from renewed
investor enthusiasm and rising corporate profits. Technology and consumer stocks
were the strongest sectors, but telecommunications and health care picked up in
the last month of the period.
The US bond market experienced extraordinary volatility as interest rates fell
early in the period, rose sharply as the economy improved, then came back down
in the final months of the reporting period. High yield bonds continued to lead
the fixed income markets. The CSFB High Yield Index returned 9.70% for the
six-month period compared to a negative 1.90% return for the Lehman Brothers
Government/Credit Bond Index. Treasury and mortgage bonds suffered from the
shift in interest rates. Municipal bonds, however, held onto modest gains. The
Lehman Brothers Municipal Bond Index returned 0.19% for the six-month period.
Investment grade municipal bonds outperformed high yield municipal bonds.
Money market fund yields fell below 1%, reflecting historically low short-term
interest rates. The Investment Company Institute, which tracks assets in and out
of mutual funds, reported that money continued to flow out of money market funds
during the year as investors sought alternatives to the low yields offered by
short-term cash equivalents. Net new cash flow to money market funds turned
negative in 2002 for the first time since 1993.
3
PORTFOLIO MANAGERS' REPORT
Columbia High Yield Opportunity Fund
Net asset value per share as of 11/30/03 ($)
Class A 4.57
- -----------------------------------
Class B 4.57
- -----------------------------------
Class C 4.57
- -----------------------------------
Class Z 4.57
- -----------------------------------
Distributions per share
06/01/03 - 11/30/03 ($)
Class A 0.17
- -----------------------------------
Class B 0.15
- -----------------------------------
Class C 0.16
- -----------------------------------
Class Z 0.18
- -----------------------------------
SEC yields as of 11/30/03 (%)
Class A 7.20
- -----------------------------------
Class B 6.81
- -----------------------------------
Class C 6.96
- -----------------------------------
Class Z 7.82
- -----------------------------------
The 30-day SEC yields reflect the portfolio's earning power net of expenses,
expressed as an annualized percentage of the public offering price per share. If
the advisor or its affiliates had not waived certain fund expenses, the SEC
yields would have been lower.
- --------------------------------------------------------------------------------
For the six-month period ended November 30, 2003, class A shares of Columbia
High Yield Opportunity Fund returned 10.43% without sales charge. The fund
outperformed both its benchmarks, the CS First Boston High Yield Index and the
JP Morgan Global High Yield Index, which returned 9.70% and 9.62%, respectively,
for the period. The Lipper High Current Yield Funds Category average return was
8.57% for the same period.1
HIGH-YIELD BONDS CONTINUED TO RISE
High-yield issues added to their gains over the past six months, extending a
trend that began last year. Returns were driven by the US economic recovery,
relatively stable interest rates and shrinking default figures. Recent data show
defaults at 3.1%, down from 4.6% six months ago and the lowest level since
November of 2000. Encouraged by these factors, investors have poured money into
higher-yielding, lower quality securities. As a result, the yield advantage over
Treasuries contracted during the period to around five percentage points at the
end of November 2003.
LOWER-QUALITY ISSUES DROVE FUND RESULTS
We were able to deliver returns that exceeded our benchmark over the period by
steadily increasing exposure to bonds rated B or lower. Bonds in the lower half
of the credit spectrum have been the strongest performers. Many issuers have
benefited from improved business conditions and have strengthened their balance
sheets by refinancing high-cost debt. We also added to the fund's return by
selling our positions and taking profits in American Greetings and AT&T Wireless
when their prices rose and yields fell.
ECONOMIC RECOVERY BOOSTED SEVERAL SECTORS
To capitalize on their potential in a recovering economy, we added to
telecommunications, utilities and cable holdings. We purchased bonds of energy
provider Dynegy, telecom operator Qwest and cable company Charter Communications
(0.5%, 1.8% and 1.5% of net assets, respectively) when these issuers came under
financial stress early this year.2 As their liquidity improved through debt
refinancing and asset sales, the bonds recovered.
Better economic news has also been good for the travel business, with airlines
among the period's best-performing sectors. We added Delta Airlines to the
portfolio and boosted our position in Northwest (0.5% and 0.4% of net assets,
respectively), two moves that benefited performance.
We purchased bonds of Goodyear (0.4% of net assets) when our analysis convinced
us that pessimism over the company's labor and other issues was an overreaction.
The bonds rose during the period. Bonds of Dex
1 Lipper Inc., a widely respected data provider in the industry, calculates
an average total return for mutual funds with similar investment objectives
as those of the fund.
2 Holdings are disclosed as of November 30, 2003.
4
Columbia High Yield Opportunity Fund
Media (1.3% of net assets), the official directory publisher for Qwest
Communications International, also appeared undervalued when the company was
spun off from its telecommunications parent. This opportunistic purchase has
been rewarded with good income and price appreciation.
However, we did not participate in the resurgence of the financial sector
because we were uncomfortable owning the kinds of distressed issues that led the
sector. Bonds of clothing-maker Levi Strauss (0.4% of net assets) were also
disappointing performers. The company has lost market share and has recently
moved its manufacturing operations offshore in an effort to contain costs.
A FAVORABLE OUTLOOK
Business conditions for high-yield issuers have improved along with the economy.
The market for debt refinancing has opened up considerably. As a result, many
issuers have cut interest costs by issuing new bonds at lower coupons,
reflecting lower market yields. Despite these lower yields, we believe that
high-yield bonds have the potential to continue to outpace higher-grade sectors,
even if it is unlikely that recent strong results can be duplicated. Yet we are
wary of possible interest rate hikes, which would be a negative for bonds in
general. To try to insulate the fund against that possibility, we have become
highly selective in our choice of lower-coupon, longer-maturity investments. As
credit-driven, bottom-up investors, we are conscious of portfolio weightings.
However, we will continue to seek out undervalued opportunities, which have the
potential to add to the fund's return.
[photo of Thomas A. LaPointe]
/s/ Thomas A. LaPointe
[photo of Kevin L. Cronk]
/s/ Kevin L. Cronk
Thomas A. LaPointe, CFA, and Kevin L. Cronk, CFA, have co-managed Columbia High
Yield Opportunity Fund since February 2003.
Investing in high-yield bonds involves greater credit risk and other risks not
associated with investing in higher-quality bonds. Bond investing also involves
interest rate risk, which means that bond prices may change as interest rates
increase or decrease. Foreign investments involve market, political, accounting
and currency risks not associated with domestic investments.
We believe that high-yield bonds have the potential to continue to outpace
higher-grade sectors, even if it is unlikely that recent strong results can be
duplicated.
5
FINANCIAL STATEMENTS
November 30, 2003 Columbia High Yield Opportunity Fund
A guide to understanding your fund's financial statements
- --------------------------------------------------------------------------------
Investment Portfolio
A list of all of the fund's holdings and their market value as of the last day
of the reporting period. To show areas of concentration and diversification,
portfolio holdings are organized by type of asset, industry and country or
geographic region (if applicable).
Statement of Assets and Liabilities
This statement shows the fund's net assets and share price for each share class.
Net assets are calculated by subtracting all the fund's liabilities (including
any unpaid expenses) from the total of the fund's investment and non-investment
assets. The share price for each class is calculated by dividing net assets for
that class by the number of outstanding shares in that class.
Statement of Operations
This statement details both the type of income earned by the fund and the
operating and non-operating expenses charged to the fund. The Statement of
Operations also shows any net gain or loss the fund realized on the sales of its
holdings during the period, as well as any unrealized gains or losses over the
reporting period. The total of these results represents the fund's net increase
or decrease in net assets from operations.
Statement of Changes in Net Assets
This statement shows how the fund's net assets were affected by its operations
results, distributions to shareholders and changes in the number of fund shares.
The Statement of Changes in Net Assets also reconciles changes in the number of
shares outstanding.
Financial Highlights
The financial highlights provide an overview of the fund's investment results,
including per-share analytics, such as net investment income or loss from
operations and distributions; ratios of expenses and net investment income to
average net assets. The financial highlights also detail the fund's portfolio
turnover rate, which is a measure of trading activity. A separate table is
provided for each share class.
Notes to Financial Statements
These notes disclose information regarding certain fund background information,
significant accounting policies of the fund, including security valuation and
income accruals and related party transactions.
6
INVESTMENT PORTFOLIO
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - 93.0%
AGRICULTURE - 0.7%
Agriculture Production - 0.7% Par ($) Value ($)
- ------------------------------------------------------------------------------
Hines Nurseries, Inc.,
10.250% 10/01/11 (a) 1,085,000 1,174,512
Seminis Vegetable Seeds,
10.250% 10/01/13 (a) 4,227,000 4,480,620
- ------------------------------------------------------------------------------
Agriculture Production Total 5,655,132
-------------
AGRICULTURE TOTAL 5,655,132
CONSTRUCTION - 3.3%
Building Construction - 3.3%
- ------------------------------------------------------------------------------
Associated Materials, Inc.,
9.750% 04/15/12 2,585,000 2,791,800
Atrium Companies, Inc.,
10.500% 05/01/09 1,655,000 1,760,506
D.R. Horton, Inc.,
9.750% 09/15/10 5,400,000 6,372,000
J. Ray McDermott SA,
11.000% 12/15/13 (a)(b) 2,140,000 2,150,700
K. Hovnanian Enterprises, Inc.:
8.875% 04/01/12 1,435,000 1,567,737
10.500% 10/01/07 1,930,000 2,265,337
Nortek Holdings, Inc.,
(c) 05/15/11 (a)
(10.000% 11/15/07) 3,790,000 2,690,900
Standard Pacific Corp.,
9.250% 04/15/12 3,425,000 3,801,750
William Lyon Homes,
10.750% 04/01/13 1,730,000 1,937,600
- ------------------------------------------------------------------------------
Building Construction Total 25,338,330
-------------
CONSTRUCTION TOTAL 25,338,330
CONSUMER STAPLES - 0.7%
Household Products - 0.7%
- ------------------------------------------------------------------------------
Norcraft Companies,
9.000% 11/01/11 (a) 1,095,000 1,152,487
Playtex Products, Inc.,
9.375% 06/01/11 3,965,000 3,935,263
Scotts Co.,
6.625% 11/15/13 (a) 310,000 312,325
- ------------------------------------------------------------------------------
Household Products Total 5,400,075
-------------
CONSUMER STAPLES TOTAL 5,400,075
FINANCE, INSURANCE & REAL ESTATE - 2.7%
Depository Institutions - 0.4%
- ------------------------------------------------------------------------------
Dollar Financial Group,
9.750% 11/15/11 (a) 2,660,000 2,739,800
Western Financial Bank,
9.625% 05/15/12 570,000 638,400
- ------------------------------------------------------------------------------
Depository Institutions Total 3,378,200
See notes to investment portfolio.
7
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
FINANCE, INSURANCE & REAL ESTATE - (continued)
Financial Services - 1.5% Par ($) Value ($)
- ------------------------------------------------------------------------------
Finova Group, Inc.,
7.500% 11/15/09 4,470,000 2,480,850
LaBranche & Co.,
12.000% 03/02/07 2,355,000 2,237,250
MDP Acquisitions PLC,
9.625% 10/01/12 4,600,000 5,106,000
Poster Financial Group, Inc.,
8.750% 12/01/11 (a)(b) 460,000 471,500
Tiers-Mir-2001-14,
Fixed Rate Certificates,
7.200% 06/15/04 (a)(e) 3,290,000 1,612,100
- ------------------------------------------------------------------------------
Financial Services Total 11,907,700
Real Estate - 0.8%
- ------------------------------------------------------------------------------
Forest City Enterprises, Inc.,
7.625% 06/01/15 1,390,000 1,452,550
Thornburg Mortgage, Inc.,
8.000% 05/15/13 2,085,000 2,189,250
Trump Holdings & Funding,
11.625% 03/15/10 1,985,000 1,776,575
- ------------------------------------------------------------------------------
Real Estate Total 5,418,375
-------------
FINANCE, INSURANCE & REAL ESTATE TOTAL 20,704,275
INDUSTRIALS - 0.9%
Construction & Farm Machinery - 0.6%
- ------------------------------------------------------------------------------
Case New Holland, Inc.,
9.250% 08/01/11 (a) 1,825,000 2,044,000
Cummins, Inc.,
9.500% 12/01/10 (a) 2,410,000 2,771,500
- ------------------------------------------------------------------------------
Construction & Farm Machinery Total 4,815,500
Industrial Conglomerate - 0.3%
- ------------------------------------------------------------------------------
SPX Corp.,
7.500% 01/01/13 2,285,000 2,444,950
- ------------------------------------------------------------------------------
Industrial Conglomerate Total 2,444,950
-------------
INDUSTRIALS TOTAL 7,260,450
MANUFACTURING - 27.6%
Apparel - 1.2%
- ------------------------------------------------------------------------------
Broder Brothers Co.,
11.250% 10/15/10 (a) 2,120,000 2,141,200
Levi Strauss & Co.,
12.250% 12/15/12 4,535,000 3,265,200
Perry Ellis International, Inc.,
8.875% 09/15/13 (a) 325,000 338,000
Phillips Van-Heusen,
8.125% 05/01/13 (a) 1,000,000 1,055,000
Warnaco, Inc.,
8.875% 06/15/13 (a) 825,000 839,438
William Carter Co.,
10.875% 08/15/11 1,534,000 1,743,007
- ------------------------------------------------------------------------------
Apparel Total 9,381,845
See notes to investment portfolio.
8
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
MANUFACTURING - (continued)
Auto Parts & Equipment - 1.2% Par ($) Value ($)
- ------------------------------------------------------------------------------
Accuride Corp., Series 1998 B,
9.250% 02/01/08 1,075,000 1,085,750
Delco Remy International, Inc.,
10.625% 08/01/06 1,420,000 1,391,600
Goodyear Tire & Rubber Co.,
7.875% 08/15/11 3,400,000 2,907,000
Metaldyne Corp.,
10.000% 11/01/13 (a) 1,250,000 1,212,500
Rexnord Corp.,
10.125% 12/15/12 1,105,000 1,204,450
TRW Automotive, Inc.:
9.375% 02/15/13 (a) 630,000 711,900
11.000% 02/15/13 (a) 485,000 569,875
- ------------------------------------------------------------------------------
Auto Parts & Equipment Total 9,083,075
Chemicals & Allied Products - 5.3%
- ------------------------------------------------------------------------------
Avecia Group PLC,
11.000% 07/01/09 3,255,000 2,799,300
Equistar Chemical Funding LP:
10.125% 09/01/08 1,985,000 2,104,100
10.625% 05/01/11 (a) 1,530,000 1,614,150
FMC Corp.,
10.250% 11/01/09 1,715,000 2,006,550
Huntsman ICI Chemicals,
10.125% 07/01/09 2,550,000 2,530,875
Huntsman ICI Holdings LLC,
(d) 12/31/09 26,695,000 11,612,325
IMC Global, Inc.,
10.875% 08/01/13 (a) 1,880,000 1,983,400
Koppers Industries, Inc.,
9.875% 10/15/13 (a) 2,795,000 3,032,575
Lyondell Chemical Co.,
9.625% 05/01/07 3,115,000 3,200,662
MacDermid, Inc.,
9.125% 07/15/11 1,645,000 1,838,287
Phibro Animal Health Corp.,
13.000% 12/01/07 (a) 2,350,000 2,420,500
Polyone Corp.,
10.625% 05/15/10 665,000 638,400
Terra Capital, Inc.,
12.875% 10/15/08 3,220,000 3,743,250
Westlake Chemical Corp.,
8.750% 07/15/11 (a) 1,560,000 1,680,900
- ------------------------------------------------------------------------------
Chemicals & Allied Products Total 41,205,274
Electronic & Electrical Equipment - 1.0%
- ------------------------------------------------------------------------------
Amkor Technology, Inc.:
9.250% 02/15/08 3,260,000 3,651,200
10.500% 05/01/09 2,230,000 2,386,100
General Cable Corp.,
9.500% 11/15/10 (a) 615,000 648,825
Xerox Corp.,
7.125% 06/15/10 1,300,000 1,339,000
- ------------------------------------------------------------------------------
Electronic & Electrical Equipment Total 8,025,125
See notes to investment portfolio.
9
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
MANUFACTURING - (continued)
Fabricated Metal - 0.5% Par ($) Value ($)
- ------------------------------------------------------------------------------
Earle M. Jorgensen Co.,
9.750% 06/01/12 3,400,000 3,706,000
- ------------------------------------------------------------------------------
Fabricated Metal Total 3,706,000
Food & Kindred Products - 3.7%
- ------------------------------------------------------------------------------
Bavaria SA,
8.875% 11/01/10 (a) 3,110,000 3,079,864
Constellation Brands, Inc.,
8.125% 01/15/12 2,000,000 2,190,000
Del Monte Corp.,
9.250% 05/15/11 1,925,000 2,112,687
Dole Food Co., Inc.,
8.625% 05/01/09 2,530,000 2,726,075
Merisant Co.,
9.500% 07/15/13 (a) 1,605,000 1,645,125
Pinnacle Foods Holdings,
8.250% 12/01/13 (a) 2,985,000 3,074,550
Premier International Foods PLC,
12.000% 09/01/09 5,750,000 6,267,500
Roundy's, Inc.,
8.875% 06/15/12 3,475,000 3,683,500
Smithfield Foods, Inc.,
8.000% 10/15/09 3,665,000 4,031,500
- ------------------------------------------------------------------------------
Food & Kindred Products Total 28,810,801
Furniture & Fixtures - 0.8%
- ------------------------------------------------------------------------------
Congloleum Corp.,
8.625% 08/01/08 (k) 1,755,000 1,053,000
Juno Lighting, Inc.,
11.875% 07/01/09 2,340,000 2,544,750
Tempur-Pedic, Inc.,
10.250% 08/15/10 (a) 2,045,000 2,285,288
- ------------------------------------------------------------------------------
Furniture & Fixtures Total 5,883,038
Lumber & Wood Products - 0.4%
- ------------------------------------------------------------------------------
Georgia Pacific Corp.,
8.875% 02/01/10 3,080,000 3,472,700
- ------------------------------------------------------------------------------
Lumber & Wood Products Total 3,472,700
Machinery & Computer Equipment - 0.3%
- ------------------------------------------------------------------------------
United Rentals, Inc.,
10.750% 04/15/08 2,150,000 2,397,250
- ------------------------------------------------------------------------------
Machinery & Computer Equipment Total 2,397,250
Measuring & Analyzing Instruments - 0.4%
- ------------------------------------------------------------------------------
Fisher Scientific International, Inc.,
8.125% 05/01/12 2,627,000 2,817,458
- ------------------------------------------------------------------------------
Measuring & Analyzing Instruments Total 2,817,458
See notes to investment portfolio.
10
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
MANUFACTURING - (continued)
Miscellaneous Manufacturing - 4.0% Par ($) Value ($)
- ------------------------------------------------------------------------------
Agco Corp.,
9.500% 05/01/08 3,100,000 3,386,750
Amscan Holdings, Inc.,
9.875% 12/15/07 7,000,000 7,000,000
Applied Extrusion Technologies, Inc.,
10.750% 07/01/11 2,545,000 1,972,375
Flowserve Corp.,
12.250% 08/15/10 2,759,000 3,200,440
Hexcel Corp.,
9.750% 01/15/09 1,800,000 1,876,500
Kinetic Concepts, Inc.,
7.375% 05/15/13 (a) 935,000 963,050
Owens-Illinois, Inc.:
7.150% 05/15/05 625,000 639,062
7.350% 05/15/08 3,050,000 3,057,625
7.500% 05/15/10 620,000 620,000
8.100% 05/15/07 1,000,000 1,035,000
Tekni Plex, Inc.,
12.750% 06/15/10 4,000,000 4,240,000
Terex Corp.,
Series 2001 B,
10.375% 04/01/11 2,815,000 3,152,800
- ------------------------------------------------------------------------------
Miscellaneous Manufacturing Total 31,143,602
Paper Products - 1.6%
- ------------------------------------------------------------------------------
Berry Plastics Corp.,
10.750% 07/15/12 (a) 1,910,000 2,167,850
Buckeye Technologies, Inc.:
8.500% 10/01/13 (a) 480,000 510,000
9.250% 09/15/08 1,980,000 1,999,800
Caraustar Industries, Inc.,
9.875% 04/01/11 2,015,000 2,135,900
Norske Skog Canada Ltd.,
8.625% 06/15/11 1,200,000 1,224,000
Smurfit-Stone Container Corp.,
8.250% 10/01/12 2,175,000 2,321,813
Tembec Industries, Inc.,
8.500% 02/01/11 1,860,000 1,804,200
- ------------------------------------------------------------------------------
Paper Products Total 12,163,563
Primary Metal - 1.1%
- ------------------------------------------------------------------------------
Kaiser Aluminum & Chemical Corp.,
10.875% 10/15/06 (e) 5,400,000 4,671,000
Oregon Steel Mills, Inc.,
10.000% 07/15/09 3,000,000 2,400,000
Steel Dynamics, Inc.:
9.500% 03/15/09 (a) 635,000 693,738
9.500% 03/15/09 650,000 710,125
- ------------------------------------------------------------------------------
Primary Metal Total 8,474,863
See notes to investment portfolio.
11
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
MANUFACTURING - (continued)
Printing & Publishing - 4.1% Par ($) Value ($)
- ------------------------------------------------------------------------------
Dex Media, Inc.,
8.000% 11/15/13 (a) 2,450,000 2,480,625
Dex Media East LLC,
12.125% 11/15/12 4,435,000 5,322,000
Dex Media West LLC,
9.875% 08/15/13 (a) 2,075,000 2,355,125
Hollinger, Inc.,
11.875% 03/01/11 (a) 2,445,000 2,665,050
Moore North America Finance, Inc.,
7.875% 01/15/11 1,385,000 1,571,975
PriMedia, Inc.,
8.875% 05/15/11 3,665,000 3,802,438
Quebecor Media, Inc.,
11.125% 07/15/11 5,360,000 6,150,600
Von Hoffman Corp.:
10.250% 03/15/09 (a) 975,000 1,023,750
10.250% 03/15/09 3,750,000 3,937,500
Yell Finance BV,
10.750% 08/01/11 2,165,000 2,543,875
- ------------------------------------------------------------------------------
Printing & Publishing Total 31,852,938
Stone, Clay, Glass & Concrete - 0.5%
- ------------------------------------------------------------------------------
Crown European Holdings SA,
10.875% 03/01/13 2,550,000 2,945,250
Owens-Brockway Glass Container,
8.250% 05/15/13 1,045,000 1,092,025
- ------------------------------------------------------------------------------
Stone, Clay, Glass & Concrete Total 4,037,275
Transportation Equipment - 1.5%
- ------------------------------------------------------------------------------
Allied Holdings, Inc.,
Series 1997 B,
8.625% 10/01/07 1,835,000 1,761,600
Collins & Aikman Products Co.,
9.750% 02/15/10 1,600,000 1,716,000
Dana Corp.:
9.000% 08/15/11 1,860,000 2,115,750
10.125% 03/15/10 1,075,000 1,230,875
Dura Operating Corp.:
8.625% 04/15/12 2,875,000 2,918,125
9.000% 05/01/09 2,000,000 1,850,000
Newcor, Inc.,
8.500% 01/31/13 (f) 847,510 367,997
- ------------------------------------------------------------------------------
Transportation Equipment Total 11,960,347
-------------
MANUFACTURING TOTAL 214,415,154
MINING & ENERGY - 5.1%
Metals & Mining - 1.1%
- ------------------------------------------------------------------------------
Metallurg, Inc.,
11.000% 12/01/07 6,700,000 3,484,000
TriMas Corp.,
9.875% 06/15/12 4,880,000 4,965,400
- ------------------------------------------------------------------------------
Metals & Mining Total 8,449,400
See notes to investment portfolio.
12
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
MINING & ENERGY - (continued)
Oil & Gas Extraction - 3.4% Par ($) Value ($)
- ------------------------------------------------------------------------------
Benton Oil & Gas Co.,
9.375% 11/01/07 2,565,000 2,539,350
Chesapeake Energy Corp. :
7.750% 01/15/15 2,455,000 2,639,125
8.125% 04/01/11 915,000 997,350
Citgo Petroleum Corp.,
11.375% 02/01/11 1,000,000 1,155,000
Compton Petroleum Corp.,
9.900% 05/15/09 2,575,000 2,806,750
Denbury Resources, Inc.,
7.500% 04/01/13 1,410,000 1,462,875
Encore Acquisition Co.,
8.375% 06/15/12 2,870,000 3,042,200
Energy Partners Ltd.,
8.750% 08/01/10 950,000 1,003,437
Forest Oil Corp.,
8.000% 06/15/08 3,160,000 3,397,000
Houston Exploration Co.,
7.000% 06/15/13 (a) 650,000 658,125
Magnum Hunter Resources, Inc.,
9.600% 03/15/12 2,135,000 2,401,875
Pogo Producing Co.,
Series B,
8.250% 04/15/11 1,000,000 1,107,500
Stone Energy Corp.,
8.250% 12/15/11 1,690,000 1,812,525
Tom Brown, Inc.,
7.250% 09/15/13 1,360,000 1,421,200
TransTexas Gas Corp.,
15.000% 03/15/05 (g) 475,296 31,797
Trico Marine Services, Inc.,
8.875% 05/15/12 690,000 448,500
- ------------------------------------------------------------------------------
Oil & Gas Extraction Total 26,924,609
Oil & Gas Field Services - 0.6%
- ------------------------------------------------------------------------------
Newpark Resources, Inc.,
8.625% 12/15/07 2,450,000 2,523,500
Premcor Refining Group,
7.500% 06/15/15 2,015,000 2,065,375
- ------------------------------------------------------------------------------
Oil & Gas Field Services Total 4,588,875
-------------
MINING & ENERGY TOTAL 39,962,884
RETAIL TRADE - 2.8%
Apparel & Accessory Stores - 0.2%
- ------------------------------------------------------------------------------
Gap, Inc.,
8.800% 12/15/08 330,000 403,425
Saks, Inc.,
8.250% 11/15/08 870,000 989,625
- ------------------------------------------------------------------------------
Apparel & Accessory Stores Total 1,393,050
See notes to investment portfolio.
13
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
RETAIL TRADE - (continued)
Food Stores - 0.6% Par ($) Value ($)
- ------------------------------------------------------------------------------
Delhaize America, Inc.,
8.125% 04/15/11 2,000,000 2,265,660
Michael Foods, Inc.,
8.000% 11/15/13 (a) 1,000,000 1,025,000
Winn Dixie Stores, Inc.,
8.875% 04/01/08 1,645,000 1,624,438
- ------------------------------------------------------------------------------
Food Stores Total 4,915,098
Miscellaneous Retail - 1.8%
- ------------------------------------------------------------------------------
General Nutrition Center,
8.500% 12/01/10 (a)(b) 910,000 928,200
JC Penney Co., Inc.,
8.000% 03/01/10 3,435,000 3,950,250
Rite Aid Corp.,
9.250% 06/01/13 4,905,000 5,260,613
Steinway Musical Instruments, Inc.,
8.750% 04/15/11 3,400,000 3,570,000
- ------------------------------------------------------------------------------
Miscellaneous Retail Total 13,709,063
Restaurants - 0.2%
- ------------------------------------------------------------------------------
Domino's, Inc.,
8.250% 07/01/11 (a) 715,000 753,431
Yum! Brands, Inc.,
7.700% 07/01/12 775,000 887,375
- ------------------------------------------------------------------------------
Restaurants Total 1,640,806
-------------
RETAIL TRADE TOTAL 21,658,017
SERVICES - 15.7%
Amusement & Recreation - 5.4%
- ------------------------------------------------------------------------------
Ameristar Casinos, Inc.,
10.750% 02/15/09 2,185,000 2,501,825
Boyd Gaming Corp.,
8.750% 04/15/12 1,090,000 1,182,650
Circus & Eldorado/Silver Legacy Capital Corp.,
10.125% 03/01/12 1,990,000 2,024,825
Hollywood Casino Shreveport,
13.000% 08/01/06 (g) 5,130,000 3,667,950
Hollywood Entertainment Corp.,
9.625% 03/15/11 2,925,000 3,144,375
Inn of the Mountain Gods Resort,
12.000% 11/15/10 (a) 1,540,000 1,620,850
Mohegan Tribal Gaming Authority:
8.000% 04/01/12 2,325,000 2,511,000
8.375% 07/01/11 1,450,000 1,576,875
Park Place Entertainment Corp.,
9.375% 02/15/07 1,290,000 1,441,575
Pinnacle Entertainment, Inc.:
8.750% 10/01/13 225,000 226,125
9.250% 02/15/07 (a) 6,750,000 6,952,500
Regal Cinemas, Inc.,
9.375% 02/01/12 1,000,000 1,135,000
See notes to investment portfolio.
14
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
SERVICES - (continued)
Amusement & Recreation - (continued) Par ($) Value ($)
- ------------------------------------------------------------------------------
Six Flags, Inc.,
9.500% 02/01/09 6,185,000 6,262,313
Town Sports International,
9.625% 04/15/11 2,400,000 2,568,000
Venetian Casino Resort LLC,
11.000% 06/15/10 2,660,000 3,078,950
Wynn Las Vegas LLC,
12.000% 11/01/10 1,500,000 1,732,500
- ------------------------------------------------------------------------------
Amusement & Recreation Total 41,627,313
Business Services - 0.3%
- ------------------------------------------------------------------------------
Iron Mountain, Inc.,
6.625% 01/01/16 2,120,000 2,067,000
- ------------------------------------------------------------------------------
Business Services Total 2,067,000
Funeral Services - 0.9%
- ------------------------------------------------------------------------------
Service Corp. International,
7.700% 04/15/09 4,010,000 4,160,375
Stewart Enterprises, Inc.,
10.750% 07/01/08 2,575,000 2,896,875
- ------------------------------------------------------------------------------
Funeral Services Total 7,057,250
Health Services - 4.4%
- ------------------------------------------------------------------------------
AmerisourceBergen Corp.,
8.125% 09/01/08 1,355,000 1,500,663
Bio-Rad Laboratories, Inc.,
7.500% 08/15/13 2,515,000 2,703,625
Coventry Health Care, Inc.,
8.125% 02/15/12 3,190,000 3,516,975
HCA, Inc.,
8.750% 09/01/10 2,120,000 2,451,780
IASIS Healthcare Corp.,
13.000% 10/15/09 2,665,000 2,991,462
InSight Health Services Corp.,
9.875% 11/01/11 2,900,000 3,048,625
Magellan Health Services, Inc.,
9.375% 11/15/07 (a)(e) 2,080,000 2,298,400
MedQuest, Inc.,
11.875% 08/15/12 4,200,000 4,604,250
PacifiCare Health Systems, Inc.,
10.750% 06/01/09 4,395,000 5,054,250
Tenet Healthcare Corp.,
6.375% 12/01/11 3,625,000 3,353,125
United Surgical Partners International, Inc.,
10.000% 12/15/11 2,600,000 2,931,500
- ------------------------------------------------------------------------------
Health Services Total 34,454,655
Hotels, Camps & Lodging - 1.3%
- ------------------------------------------------------------------------------
Hard Rock Hotel, Inc.,
8.875% 06/01/13 (a) 2,260,000 2,373,000
Host Marriott LP,
9.500% 01/15/07 2,750,000 3,007,812
See notes to investment portfolio.
15
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
SERVICES - (continued)
Hotels, Camps & Lodging - (continued) Par ($) Value ($)
- ------------------------------------------------------------------------------
Royal Caribbean Cruises,
8.000% 05/15/10 1,800,000 1,941,750
Starwood Hotels & Resorts Worldwide, Inc.,
7.875% 05/01/12 2,750,000 3,055,938
- ------------------------------------------------------------------------------
Hotels, Camps & Lodging Total 10,378,500
Other Services - 3.4%
- ------------------------------------------------------------------------------
Advanstar Communications, Inc.,
12.000% 02/15/11 4,050,000 4,151,250
Corrections Corp.,
9.875% 05/01/09 2,340,000 2,620,800
IMCO Recycling, Inc.,
10.375% 08/01/13 (a) 1,540,000 1,447,600
Millar Western Forest,
7.750% 11/15/13 (a) 1,695,000 1,703,661
Nationsrent, Inc.,
9.500% 10/15/10 (a) 3,260,000 3,382,250
QDI Capital Corp.,
9.000% 11/15/10 (a) 2,810,000 2,915,375
River Rock Entertainment,
9.750% 11/01/11 (a) 2,210,000 2,353,650
Stratus Technologies, Inc.,
10.375% 12/01/08 (a) 2,470,000 2,525,575
Tabletop Holdings, Inc.,
(c) 05/15/14
(12.250% 11/15/08) (a) 3,995,000 2,157,300
Wackenhut Corrections,
8.250% 07/15/13 (a) 1,260,000 1,329,300
Williams Scotsman, Inc.,
9.876% 06/01/07 1,415,000 1,393,775
- ------------------------------------------------------------------------------
Other Services Total 25,980,536
-------------
SERVICES TOTAL 121,565,254
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 33.5%
Aerospace - 1.1%
- ------------------------------------------------------------------------------
BE Aerospace, Inc.,
8.875% 05/01/11 3,080,000 2,802,800
Condor Systems, Inc.,
11.875% 05/01/09 (e) 4,000,000 920,000
Sequa Corp.,
8.875% 04/01/08 1,670,000 1,816,125
TransDigm, Inc.,
8.375% 07/15/11 (a) 1,560,000 1,645,800
Vought Aircraft Industries, Inc.,
8.000% 07/15/11 (a) 1,295,000 1,311,188
- ------------------------------------------------------------------------------
Aerospace Total 8,495,913
Air Transportation - 1.4%
- ------------------------------------------------------------------------------
Delta Airlines, Inc.,
7.900% 12/15/09 4,480,000 3,584,000
See notes to investment portfolio.
16
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Air Transportation - (continued) Par ($) Value ($)
- ------------------------------------------------------------------------------
Northwest Airlines Corp.,
9.875% 03/15/07 3,850,000 3,426,500
U.S. Airways, Inc.,
10.375% 03/01/13 (h) 10,427,792 3,597,588
- ------------------------------------------------------------------------------
Air Transportation Total 10,608,088
Broadcasting - 2.6%
- ------------------------------------------------------------------------------
CanWest Media, Inc.,
10.625% 05/15/11 4,775,000 5,419,625
Corus Entertainment, Inc.,
8.750% 03/01/12 1,465,000 1,611,500
Emmis Communications Corp.,
(c) 03/15/11
(12.500% 03/15/06) 3,425,000 3,125,312
Sinclair Broadcast Group, Inc.,
8.750% 12/15/11 1,000,000 1,095,000
Spanish Broadcasting System,
9.625% 11/01/09 560,000 588,000
TV Azteca SA de CV,
10.500% 02/15/07 5,070,000 5,196,750
XM Satellite Radio Holdings, Inc.,
(c) 12/31/09
(14.000% 12/31/05) 3,958,930 3,444,269
- ------------------------------------------------------------------------------
Broadcasting Total 20,480,456
Cable - 5.4%
- ------------------------------------------------------------------------------
Charter Communications Holdings LLC:
(c) 04/01/11
(9.920% 04/01/04) 13,710,000 10,488,150
10.000% 04/01/09 765,000 634,950
10.250% 09/15/10 (a) 750,000 764,062
Comcast UK Cable Partners Ltd.,
11.200% 11/15/07 6,800,000 6,834,000
CSC Holdings, Inc.,
7.625% 04/01/11 2,405,000 2,429,050
DirecTV Holdings Finance,
8.375% 03/15/13 2,495,000 2,822,469
EchoStar DBS Corp.,
6.375% 10/01/11 (a) 4,525,000 4,525,000
Insight Communications Co.,
(c) 02/15/11
(12.250% 02/15/06) 3,295,000 2,611,287
Insight Midwest,
9.750% 10/01/09 2,955,000 3,124,912
Northland Cable Television, Inc.,
10.250% 11/15/07 3,650,000 3,613,500
Rogers Cable, Inc.,
6.250% 06/15/13 295,000 295,920
Shaw Communications, Inc.,
7.500% 11/20/13 CAD 3,060,000 2,337,229
Videotron Ltee,
6.875% 01/15/14 (a) USD 1,775,000 1,828,250
- ------------------------------------------------------------------------------
Cable Total 42,308,779
See notes to investment portfolio.
17
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Communication Services - 0.8% Par ($) Value ($)
- ------------------------------------------------------------------------------
Crown Castle International Corp.,
10.750% 08/01/11 2,510,000 2,786,100
SBA Communications, Inc.,
10.250% 02/01/09 4,045,000 3,711,288
- ------------------------------------------------------------------------------
Communication Services Total 6,497,388
Electric, Gas & Sanitary Services - 1.2%
- ------------------------------------------------------------------------------
Allied Waste North America, Inc.:
6.500% 11/15/10 (a) 1,510,000 1,510,000
Series 2001 B,
8.500% 12/01/08 5,000,000 5,475,000
Illinova Power Corp.,
11.500% 12/15/10 1,875,000 2,212,500
- ------------------------------------------------------------------------------
Electric, Gas & Sanitary Services Total 9,197,500
Electric Services - 5.5%
- ------------------------------------------------------------------------------
AES Corp.:
9.000% 05/15/15 (a) 4,115,000 4,485,350
9.500% 06/01/09 2,253,000 2,421,975
Beaver Valley Funding Corp.,
9.000% 06/01/17 2,210,000 2,524,373
Caithness Coso Funding Corp.,
Series 1999 B,
9.050% 12/15/09 3,789,232 4,111,317
Calpine Corp.:
8.500% 07/15/10 (a) 2,485,000 2,298,625
8.500% 02/15/11 3,470,000 2,515,750
8.625% 08/15/10 1,710,000 1,239,750
CMS Energy Corp.,
8.900% 07/15/08 2,990,000 3,173,137
Edison Mission Energy,
9.875% 04/15/11 3,090,000 3,105,450
MSW Energy Holdings Finance:
7.375% 09/01/10 (a) 910,000 923,650
8.500% 09/01/10 (a) 3,260,000 3,496,350
Nevada Power Co.:
9.000% 08/15/13 (a) 985,000 1,074,881
10.875% 10/15/09 2,765,000 3,124,450
Orion Power Holdings, Inc.,
12.000% 05/01/10 1,650,000 1,930,500
PSE&G Energy Holdings, Inc.,
8.625% 02/15/08 2,955,000 3,139,687
UCAR Finance, Inc.,
10.250% 02/15/12 2,890,000 3,193,450
- ------------------------------------------------------------------------------
Electric Services Total 42,758,695
Marine Transportation - 0.2%
- ------------------------------------------------------------------------------
Teekay Shipping Corp.,
8.875% 07/15/11 1,435,000 1,628,725
- ------------------------------------------------------------------------------
Marine Transportation Total 1,628,725
See notes to investment portfolio.
18
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Motor Freight & Warehousing - 0.6% Par ($) Value ($)
- ------------------------------------------------------------------------------
QDI LLC:
12.000% 06/15/09 PIK (a)(f) 838,594 901,489
12.500% 06/15/08 PIK 3,429,000 3,500,323
- ------------------------------------------------------------------------------
Motor Freight & Warehousing Total 4,401,812
Pipelines - 3.5%
- ------------------------------------------------------------------------------
Coastal Corp.,
7.750% 06/15/10 5,240,000 4,611,200
Dynegy Holdings, Inc.:
8.750% 02/15/12 2,475,000 2,388,375
9.875% 07/15/10 (a) 1,230,000 1,340,700
10.125% 07/15/13 (a) 310,000 341,000
El Paso Partners,
Series B,
8.500% 06/01/11 675,000 739,125
Gulfterra Energy Partners,
8.500% 06/01/10 1,580,000 1,730,100
Northwest Pipeline Corp.,
8.125% 03/01/10 1,040,000 1,154,400
Sonat, Inc.,
7.625% 07/15/11 5,610,000 4,824,600
Southern Natural Gas,
8.875% 03/15/10 2,030,000 2,258,375
Williams Companies, Inc.,
8.125% 03/15/12 6,980,000 7,538,400
- ------------------------------------------------------------------------------
Pipelines Total 26,926,275
Pollution Control - 0.2%
- ------------------------------------------------------------------------------
Envirosource, Inc.,
14.000% 12/15/08 (f) 1,710,534 1,652,650
- ------------------------------------------------------------------------------
Pollution Control Total 1,652,650
Radio & Telephone Communications - 4.7%
- ------------------------------------------------------------------------------
ACC Escrow Corp.,
10.000% 08/01/11 (a) 1,955,000 2,140,725
AirGate PCS, Inc.,
(c) 10/01/09
(13.500% 10/01/04) 1,020,000 663,000
Cincinnati Bell, Inc.,
8.375% 01/15/14 (a) 2,455,000 2,577,750
Dobson Communications Corp.,
8.875% 10/01/13 (a) 3,230,000 3,250,187
Horizon PCS, Inc.,
13.750% 06/15/11 (e) 3,300,000 742,500
MCI Communications Corp.:
7.125% 06/15/27 (e) 905,000 733,050
7.500% 08/20/04 (e) 3,530,000 2,859,300
Nextel Communications, Inc.,
9.375% 11/15/09 6,520,000 7,090,500
See notes to investment portfolio.
19
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Radio & Telephone Communications - (continued) Par ($) Value ($)
- ------------------------------------------------------------------------------
Nextel Partners, Inc.,
11.000% 03/15/10 3,250,000 3,591,250
Rogers Cantel, Inc.,
9.750% 06/01/16 5,715,000 6,743,700
Triton PCS, Inc.,
8.750% 11/15/11 1,055,000 1,012,800
US Unwired, Inc.,
(c) 11/01/09
(13.375% 11/01/04) 5,130,000 3,411,450
Western Wireless Corp.,
9.250% 07/15/13 1,550,000 1,604,250
- ------------------------------------------------------------------------------
Radio & Telephone Communications Total 36,420,462
Railroad - 0.7%
- ------------------------------------------------------------------------------
Kansas City Southern,
7.500% 06/15/09 1,620,000 1,656,450
Railworks Corp.,
11.500% 04/15/09 (g) 600,000 30,000
TFM SA de CV,
12.500% 06/15/12 3,830,000 3,355,725
- ------------------------------------------------------------------------------
Railroad Total 5,042,175
Telecommunication Services - 4.6%
- ------------------------------------------------------------------------------
American Towers, Inc.,
7.250% 12/01/11 (a) 1,560,000 1,563,900
Avaya, Inc.,
11.125% 04/01/09 1,880,000 2,209,000
Carrier1 International SA,
13.250% 02/15/09 (e) 6,000,000 540,000
Colt Telecom Group PLC:
12.000% 12/15/06 1,795,000 1,790,512
Fairpoint Communications,
11.875% 03/01/10 2,150,000 2,526,250
Innova S De R.L.,
9.375% 09/19/13 (a) 750,000 767,813
Level 3 Communications, Inc.,
(c) 12/01/08
(10.500% 12/01/03) 3,020,000 2,823,700
Lucent Technologies, Inc.,
6.450% 03/15/29 2,890,000 2,189,175
Qwest Capital Funding:
7.250% 02/15/11 6,575,000 6,262,688
7.750% 02/15/31 3,035,000 2,670,800
Qwest Services Corp.,
13.500% 12/15/10 (a) 4,095,000 4,811,625
Spectrasite, Inc.,
8.250% 05/15/10 (a) 1,690,000 1,791,400
Time Warner Telecom, Inc.:
9.750% 07/15/08 3,460,000 3,529,200
10.125% 02/01/11 1,760,000 1,821,600
- ------------------------------------------------------------------------------
Telecommunication Services Total 35,297,663
See notes to investment portfolio.
20
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Corporate Fixed-Income Bonds & Notes - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Transportation Services - 1.0% Par ($) Value ($)
- ------------------------------------------------------------------------------
Petroleum Helicopters, Inc.,
9.375% 05/01/09 4,125,000 4,444,688
Stena AB:
7.500% 11/01/13 (a)(b) 1,220,000 1,223,843
9.625% 12/01/12 2,055,000 2,286,188
- ------------------------------------------------------------------------------
Transportation Services Total 7,954,719
-------------
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES TOTAL 259,671,300
Total Corporate Fixed-Income Bonds & Notes
(cost of $718,992,817) 721,630,871
Convertible Bonds - 1.2%
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 1.2%
Communication Services - 0.6%
- ------------------------------------------------------------------------------
Colt Telecom Group PLC
2.000% 08/06/05 1,400,000 931,789
2.000% 03/29/06 (a) EUR 2,190,000 2,785,100
2.000% 12/16/06 (a) USD 980,000 1,246,935
- ------------------------------------------------------------------------------
Communication Services Total 4,963,824
Telecommunication Services - 0.6%
- ------------------------------------------------------------------------------
Nortel Networks Ltd;
4.250% 09/01/08 5,290,000 5,010,953
- ------------------------------------------------------------------------------
Telecommunication Services Total 5,010,953
-------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 9,974,777
Total Convertible Bonds
(cost of $8,077,195) 9,974,777
Preferred Stocks - 2.3%
FINANCE, INSURANCE & REAL ESTATE - 0.6%
Real Estate - 0.6% Shares
- ------------------------------------------------------------------------------
iStar Financial:
Series E, 7.875% 86,769 2,223,456
Series F, 7.800% 97,000 2,434,099
- ------------------------------------------------------------------------------
Real Estate Total 4,657,555
-------------
FINANCE, INSURANCE & REAL ESTATE TOTAL 4,657,555
MANUFACTURING - 0.3%
Food & Kindred Products - 0.1%
- ------------------------------------------------------------------------------
Constellation Brands, Inc., Series A, 5.750% 19,825 639,356
- ------------------------------------------------------------------------------
Food & Kindred Products Total 639,356
See notes to investment portfolio.
21
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Preferred Stocks - (continued)
MANUFACTURING - (continued)
Printing & Publishing - 0.2% Shares Value ($)
- ------------------------------------------------------------------------------
PriMedia, Inc.:
Series F, 9.200% 14,590 1,349,575
Series H, 8.625% 220 19,910
- ------------------------------------------------------------------------------
Printing & Publishing Total 1,369,485
-------------
MANUFACTURING TOTAL 2,008,841
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 1.4%
Broadcasting - 0.4%
- ------------------------------------------------------------------------------
Spanish Broadcasting System, Inc., 10.750% (a) 3,210 3,226,050
- ------------------------------------------------------------------------------
Broadcasting Total 3,226,050
Cable - 0.9%
- ------------------------------------------------------------------------------
CSC Holdings Ltd., PIK:
11.125% 9,180 970,785
11.750% 59,441 6,256,165
NTL Europe, Inc., Series A, 10.000% 23 118
- ------------------------------------------------------------------------------
Cable Total 7,227,068
Pollution Control - 0.1%
- ------------------------------------------------------------------------------
EnviroSource, Inc., 7.250% (f) 5,804 667,460
- ------------------------------------------------------------------------------
Pollution Control Total 667,460
-------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 11,120,578
Total Preferred Stocks
(cost of $18,794,027) 17,786,974
Common Stocks (i) - 1.4%
MANUFACTURING - 0.2%
Communications Equipment - 0.2%
- ------------------------------------------------------------------------------
EchoStar Communications Corp., Class A 50,000 1,724,000
- ------------------------------------------------------------------------------
Communications Equipment Total 1,724,000
-------------
MANUFACTURING TOTAL 1,724,000
MINING & ENERGY - 0.0%
Crude Petroleum & Natural Gas - 0.0%
- ------------------------------------------------------------------------------
Coho Energy, Inc. (j) 750 --
Horizon Natural Resources Co. (f) 16,000 16
- ------------------------------------------------------------------------------
Crude Petroleum & Natural Gas Total 16
Oil & Gas Extraction - 0.0%
- ------------------------------------------------------------------------------
Orion Refining Corp. (f)(j) 10 --
- ------------------------------------------------------------------------------
Oil & Gas Extraction Total --
-------------
MINING & ENERGY TOTAL 16
See notes to investment portfolio.
22
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Common Stocks (i) - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 1.2%
Cable - 0.4% Shares Value ($)
- ------------------------------------------------------------------------------
NTL, Inc. 46,154 3,007,395
Ono Finance PLC (a) 5,700 6
- ------------------------------------------------------------------------------
Cable Total 3,007,401
Electric Services - 0.0%
- ------------------------------------------------------------------------------
BayCorp Holdings Ltd. 3 39
- ------------------------------------------------------------------------------
Electric Services Total 39
Pollution Control - 0.5%
- ------------------------------------------------------------------------------
EnviroSource, Inc. (f) 50,004 3,600,288
Fairlane Management Corp. (f)(j) 50,004 --
- ------------------------------------------------------------------------------
Pollution Control Total 3,600,288
Radio & Telephone Communications - 0.3%
- ------------------------------------------------------------------------------
Nextel Communications, Inc., Class A 100,000 2,533,000
- ------------------------------------------------------------------------------
Radio & Telephone Communications Total 2,533,000
-------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 9,140,728
Total Common Stocks
(cost of $8,734,526) 10,864,744
Warrants (i) - 0.2%
RETAIL STORES - 0.0%
Food Stores - 0.0% Units
- ------------------------------------------------------------------------------
Pathmark Stores, Inc.,
expires 09/19/10 58,758 57,583
- ------------------------------------------------------------------------------
Food Stores Total 57,583
-------------
RETAIL STORES TOTAL 57,583
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 0.2%
Aerospace - 0.0%
- ------------------------------------------------------------------------------
Loral Space & Communications Ltd.,
expires 01/15/07 12,000 120
- ------------------------------------------------------------------------------
Aerospace Total 120
Cable - 0.0%
- ------------------------------------------------------------------------------
Cable Satisfaction International, Inc.,
expires 03/01/05 7,550 76
Ono Finance PLC,
expires 02/15/11 (a) 1,200 12
- ------------------------------------------------------------------------------
Cable Total 88
See notes to investment portfolio.
23
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Warrants (i) - (continued)
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - (continued)
Communications - 0.2% Units Value ($)
- ------------------------------------------------------------------------------
UbiquiTel, Inc.,
expires 04/15/10 (a) 5,250 53
XM Satellite Radio Holdings, Inc.:
expires 12/31/09 675 1,215,000
expires 03/15/10 (a) 2,435 50,526
- ------------------------------------------------------------------------------
Communications Total 1,265,579
Communication Services - 0.0%
- ------------------------------------------------------------------------------
iPCS, Inc.,
expires 07/15/10 (a) 2,500 25
- ------------------------------------------------------------------------------
Communication Services Total 25
Motor Freight & Warehousing - 0.0%
- ------------------------------------------------------------------------------
QDI LLC,
expires 01/15/07 (a)(f) 10,207 156,473
- ------------------------------------------------------------------------------
Motor Freight & Warehousing Total 156,473
Telecommunications - 0.0%
- ------------------------------------------------------------------------------
Carrier1 International SA,
expires 02/19/09 (a)(e) 2,780 28
Horizon PCS, Inc.,
expires 10/01/10 (a) 4,705 5
Jazztel PLC,
expires 07/15/10 (a)(j) 1,435 --
MetroNet Communications Corp.,
expires 08/15/07 (a)(f)(j) 1,250 --
- ------------------------------------------------------------------------------
Telecommunications Total 33
-------------
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES TOTAL 1,422,318
Total Warrants
(cost of $8,218,447) 1,479,901
See notes to investment portfolio.
24
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Short-Term Obligation - 0.5%
- ------------------------------------------------------------------------------
Par ($) Value ($)
Repurchase agreement with State Street Bank &
Trust Co., dated 11/28/03, due 12/01/03 at
0.950%, collateralized by a U.S. Treasury
Bond maturing 02/15/29, market value
$3,938,855 (repurchase proceeds $3,861,306)
(cost of $3,861,000) 3,861,000 3,861,000
Total Investments - 98.6%
(cost of $766,678,012) (l) 765,598,267
Other Assets & Liabilities, Net - 1.4% 11,096,182
Net Assets - 100.0% $ 776,694,449
Notes to Investment Portfolio:
(a) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933 and may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November 30,
2003, the value of these securities amounted to $149,255,740 which
represents 19.2% of net assets.
(b) This security has been purchased on a delayed delivery basis.
(c) Stepped coupon bond. Currently accruing at zero. Shown parenthetically is
the next interest rate to be paid and the date the Fund will begin accruing
this rate.
(d) Zero coupon bond.
(e) As of November 30, 2003, the Fund held securities of certain issuers that
have filed for bankruptcy protection under Chapter 11, representing 1.9% of
net assets. These issuers are in default of certain debt covenants. Income
is not being accrued.
(f) Represents fair value as determined in good faith under the direction of
the Board of Trustees.
(g) This issuer is in default of certain debt covenants. Income is not being
accrued.
(h) Income is not being accrued on this security.
(i) Non-income producing.
(j) Security has no value.
(k) As of November 30, 2003, the fund held securities of certain issuers that
have filed for bankruptcy protection under Chapter 11, representing 0.1% of
net assets. Income is being accrued.
(l) Cost for federal income tax purposes is $766,139,794.
Forward foreign currency contracts outstanding at November 30, 2003 are as
follows:
SETTLEMENT NET UNREALIZED
CONTRACTS TO DELIVER IN EXCHANGE FOR DATE DEPRECIATION
- -------------------- --------------- ---------- --------------
CAD 3,060,000 USD 2,342,763 12/15/03 $ (14,101)
EUR 3,979,000 USD 4,559,934 12/08/03 (212,455)
--------------
$ (226,556)
==============
ACRONYM NAME
- ------- --------------------
CAD Canadian Dollar
EUR Euro
PIK Payment-In-Kind
USD United States Dollar
See notes to financial statements.
25
STATEMENT OF ASSETS AND LIABILITIES
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
($)
- -------------------------------------------------------------------------
Assets
Investments, at cost 766,678,012
Investments, at value 765,598,267
Cash 2,876,734
Receivable for:
Investments sold 5,108,842
Investments sold on a delayed delivery basis 319,300
Fund shares sold 1,010,812
Interest 16,070,988
Dividends 91,983
Deferred Trustees' compensation plan 25,825
-------------
Total Assets 791,102,751
- -------------------------------------------------------------------------
Liabilities
Net unrealized depreciation on foreign
forward currency contracts 226,556
Expense reimbursement due to Advisor 17
Payable for:
Investments purchased 5,249,671
Investments purchased on a delayed delivery basis 4,977,170
Fund shares repurchased 913,871
Distributions 1,861,198
Investment advisory fee 380,092
Transfer agent fee 347,503
Pricing and bookkeeping fees 30,307
Trustees' fees 803
Custody fee 4,048
Distribution and service fees 371,150
Deferred Trustees' fees 25,825
Other liabilities 20,091
-------------
Total Liabilities 14,408,302
Net Assets 776,694,449
- -------------------------------------------------------------------------
Composition of Net Assets
Paid-in capital 1,194,242,488
Overdistributed net investment income (2,795,900)
Accumulated net realized loss (413,449,591)
Net unrealized depreciation on:
Investments (1,079,745)
Foreign currency translations (222,803)
Net Assets 776,694,449
- -------------------------------------------------------------------------
Class A
Net assets 381,432,479
Shares outstanding 83,544,068
Net asset value per share 4.57(a)
Maximum offering price per share ($4.57/0.9525) 4.80(b)
- -------------------------------------------------------------------------
Class B
Net assets 307,236,590
Shares outstanding 67,292,176
Net asset value and offering price per share 4.57(a)
- -------------------------------------------------------------------------
Class C
Net assets 57,727,588
Shares outstanding 12,643,857
Net asset value and offering price per share 4.57(a)
- -------------------------------------------------------------------------
Class Z
Net assets 30,297,792
Shares outstanding 6,636,010
Net asset value, offering and redemption
price per share 4.57
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
26
STATEMENT OF OPERATIONS
For the Six Months Ended November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
($)
- -------------------------------------------------------------------------
Investment Income
Dividends 399,892
Interest 32,934,169
Total Investment Income (net of foreign
taxes withheld of $757) 33,334,061
- -------------------------------------------------------------------------
Expenses
Investment advisory fee 2,283,659
Distribution fee:
Class B 1,141,562
Class C 207,016
Service fee:
Class A 467,985
Class B 380,520
Class C 68,933
Transfer agent fee 1,285,397
Pricing and bookkeeping fees 123,961
Trustees' fees 13,737
Custody fee 18,169
Other expenses 102,528
----------
Total Expenses 6,093,467
Fees and expenses waived or reimbursed by Advisor (37,548)
Fees waived by Distributor - Class C (41,576)
Custody earnings credit (5,306)
----------
Net Expenses 6,009,037
----------
Net Investment Income 27,325,024
- -------------------------------------------------------------------------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency
Net realized loss on:
Investments (2,955,250)
Foreign currency transactions (152,973)
----------
Net realized loss (3,108,223)
Net change in unrealized appreciation/depreciation on:
Investments 50,039,385
Foreign currency translations (116,820)
----------
Net change in unrealized appreciation/depreciation 49,922,565
----------
Net Gain 46,814,342
----------
Net Increase in Net Assets from Operations 74,139,366
See notes to financial statements.
27
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------
Columbia High Yield Opportunity Fund
(unaudited)
Six Months
Ended Period Ended Year Ended
November 30, May 31, December 31,
Increase (Decrease) in Net Assets: 2003($) 2003(a)($) 2002($)
- -------------------------------------------------------------------------------------------------------
Operations:
Net investment income 27,325,024 24,767,811 55,441,396
Net realized loss on investments and
foreign currency transactions (3,108,223) (17,632,755) (148,093,490)
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations 49,922,565 72,727,890 60,419,314
Net Increase (Decrease) from Operations 74,139,366 79,862,946 (32,232,780)
- -------------------------------------------------------------------------------------------------------
Distributions Declared to Shareholders:
From net investment income:
Class A (14,446,064) (13,142,914) (32,236,809)
Class B (10,601,473) (9,273,542) (25,717,885)
Class C (1,962,064) (1,580,199) (4,204,933)
Class Z (1,075,527) (1,396,747) (1,529,375)
Return of capital:
Class A -- -- (2,748,971)
Class B -- -- (2,193,075)
Class C -- -- (358,573)
Class Z -- -- (130,416)
Total Distributions Declared to Shareholders (28,085,128) (25,393,402) (69,120,037)
- -------------------------------------------------------------------------------------------------------
Share Transactions:
Class A:
Subscriptions 132,287,691 123,761,289 235,835,725
Proceeds received in connection with merger -- -- 175,784
Distributions reinvested 7,485,686 6,982,957 17,448,294
Redemptions (158,482,043) (143,095,138) (211,467,498)
--------------------------------------------
Net Increase (Decrease) (18,708,666) (12,350,892) 41,992,305
Class B:
Subscriptions 29,641,965 31,442,432 88,840,756
Distributions reinvested 4,863,503 4,268,763 12,563,965
Redemptions (50,018,506) (31,579,170) (127,327,785)
--------------------------------------------
Net Increase (Decrease) (15,513,038) 4,132,025 (25,923,064)
Class C:
Subscriptions 16,600,595 9,708,920 22,531,723
Distributions reinvested 1,231,706 984,268 2,835,915
Redemptions (14,875,138) (9,260,789) (23,747,996)
--------------------------------------------
Net Increase 2,957,163 1,432,399 1,619,642
Class Z:
Subscriptions 27,851,544 18,835,360 20,514,243
Proceeds received in connection
with merger -- -- 36,830,189
Distributions reinvested 835,037 1,244,797 1,500,998
Redemptions (46,022,027) (12,632,407) (24,679,597)
--------------------------------------------
Net Increase (Decrease) (17,335,446) 7,447,750 34,165,833
Net Increase (Decrease) from
Share Transactions (48,599,987) 661,282 51,854,716
Total Increase (Decrease) in Net Assets (2,545,749) 55,130,826 (49,498,101)
- -------------------------------------------------------------------------------------------------------
See notes to financial statements.
28
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- -------------------------------------------------------------------------------------------------------
Columbia High Yield Opportunity Fund
(unaudited)
Six Months
Ended Period Ended Year Ended
November 30, May 31, December 31,
Increase (Decrease) in Net Assets: 2003($) 2003(a)($) 2002($)
- -------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of period 779,240,198 724,109,372 773,607,473
End of period (including overdistributed net
investment income of $(2,795,900), $(2,035,796)
and (1,587,777), respectively) 776,694,449 779,240,198 724,109,372
- -------------------------------------------------------------------------------------------------------
Changes in Shares:
Class A:
Subscriptions 30,483,620 30,064,102 56,148,431
Issued in connection with merger -- -- 43,511
Issued for distributions reinvested 1,691,132 1,670,630 4,119,471
Redemptions (36,196,064) (34,371,342) (49,928,762)
--------------------------------------------
Net Increase (Decrease) (4,021,312) (2,636,610) 10,382,651
Class B:
Subscriptions 6,733,777 7,579,882 20,864,519
Issued for distributions reinvested 1,099,723 1,022,266 2,954,382
Redemptions (11,394,786) (7,619,970) (29,746,409)
--------------------------------------------
Net Increase (Decrease) (3,561,286) 982,178 (5,927,508)
Class C:
Subscriptions 3,802,587 2,356,861 5,278,283
Issued for distributions reinvested 278,177 235,678 668,879
Redemptions (3,393,014) (2,247,443) (5,607,906)
--------------------------------------------
Net Increase 687,750 345,096 339,256
Class Z:
Subscriptions 6,334,092 4,570,300 5,020,578
Issued in connection with merger -- -- 9,116,388
Issued for distributions reinvested 188,447 297,518 374,230
Redemptions (10,532,660) (3,077,369) (6,084,044)
--------------------------------------------
Net Increase (Decrease) (4,010,121) 1,790,449 8,427,152
(a) The Fund has changed its fiscal year end from December 31 to May 31.
See notes to financial statements.
29
NOTES TO FINANCIAL STATEMENTS
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
NOTE 1. ORGANIZATION
Columbia High Yield Opportunity Fund (the "Fund"), a series of Columbia Funds
Trust I (the "Trust"), is a diversified portfolio. The Trust is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
INVESTMENT GOAL
The Fund seeks high current income and total return.
FUND SHARES
The Fund may issue an unlimited number of shares, and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are subject to a maximum front-end sales charge of 4.75% based on
the amount of initial investment. Class A shares purchased without an initial
sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on
shares sold within eighteen months on an original purchase of $1 million to $25
million. Class B shares are subject to a maximum CDSC of 5.00% based upon the
holding period after purchase. Class B shares will convert to Class A shares in
a certain number of years after purchase, depending on the program under which
shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in each Fund's prospectus.
Effective October 13, 2003, the Fund changed its name from Liberty High Yield
Securities Fund to Columbia High Yield Opportunity Fund. Also on that date, the
Trust changed its name from Liberty Funds Trust I to Columbia Funds Trust I.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("GAAP") requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements.
SECURITY VALUATION:
Debt securities generally are valued by a pricing service approved by the
Trust's Board of Trustees, based upon market transactions for normal,
institutional-size trading units of similar securities. The services may use
various pricing techniques which take into account appropriate factors such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. Certain securities, which tend to be
more thinly traded and of lesser quality, are priced based on fundamental
analysis of the financial condition of the issuer and the estimated value of any
collateral. Valuations developed through pricing techniques may vary from the
actual amounts realized upon sale of the securities, and the potential variation
may be greater for those securities valued using fundamental analysis. Debt
securities for which quotations are readily available are valued at an
over-the-counter or exchange bid quotation.
Equity securities are valued at the last sale price at the close of the
principal exchange on which they trade. Unlisted securities or listed securities
for which there were no sales during the day are valued at the closing bid price
on such exchanges or over-the-counter markets.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market value.
Forward currency exchange contracts are valued at the prevailing forward
exchange rate of the underlying currencies.
Restricted securities and investments for which market quotations are not
readily available, which tend to be more thinly traded and of lesser quality,
are valued at fair value as determined in good faith under consistently applied
procedures established by and under the general supervision of the Board of
Trustees. Foreign markets close each day at various times prior to the close of
the New York Stock Exchange ("NYSE"). Foreign currency exchange rates are
generally
30
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
determined prior to the close of the NYSE at 12:00 p.m. Eastern (U.S.) time.
Occasionally, events affecting the value of a foreign security may occur
subsequent to the close of the exchange or market which would not be reflected
in the computation of the Fund's net asset value. In such an event, the foreign
security will be valued at the fair value.
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements to exchange one
currency for another at a future date at a specified price. These contracts are
used to minimize the exposure to foreign exchange rate fluctuations during the
period between trade and settlement date of the contracts. The Fund may utilize
forward foreign currency exchange contracts in connection with the settlement of
purchases and sales of securities. The Fund may also enter into these contracts
to hedge certain other foreign currency denominated assets. Contracts to buy
generally are used to acquire exposure to foreign currencies, while contracts to
sell are used to hedge a Fund's investments against currency fluctuations.
Forward currency contracts are valued daily at the current exchange rate of the
underlying currency, resulting in unrealized gains (losses) which become
realized at the time the foreign currency contracts are closed or mature.
Realized and unrealized gains (losses) arising from such transactions are
included in net realized and unrealized gains (losses) on foreign currency
transactions. The use of forward currency contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the maximum
potential loss from such contracts is the aggregate face value in U.S. dollars
at the time the contract was opened, exposure is typically limited to the change
in value of the contract (in U.S. dollars) over the period it remains open. A
fund could also be exposed to risk if the counterparties of the contracts are
unable to fulfill the terms of the contracts. The Fund sets aside cash or liquid
portfolio securities equal to the amount of the forward currency contract.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund, through
its custodian, receives delivery of underlying securities collateralizing a
repurchase agreement. Collateral securities are marked-to-market daily to ensure
that their market value is at least equal, at all times, to the repurchase
price. (In the event that the market value of the collateral securities declines
below the repurchase price of the repurchase agreement, additional securities
will be required to be received.) A repurchase agreement transaction involves
certain risks in the event of default or insolvency of the counterparty,
including possible delays or restrictions upon a 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.
DELAYED DELIVERY SECURITIES
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 cash or
liquid portfolio securities as segregated with the custodian in an amount equal
to the delayed delivery commitment.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities. Corporate actions
and dividend income are recorded on the ex-date. The value of additional
securities received as an income payment is recorded as income and as the cost
basis of such securities.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
31
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
DETERMINATION OF CLASS NET ASSET VALUES
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations) and realized and unrealized gains (losses) are
allocated to each class of the Fund on a daily basis for purposes of determining
the net asset value of each class. Income and expenses are allocated to each
class based on the settled shares method, while realized and unrealized gains
(losses) are allocated based on the relative net assets 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 or tax-exempt income, if any, for its tax year,
and as such will not be subject to federal income taxes. In addition, by
distributing in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, the Fund will not be
subject to federal excise tax. Therefore, no federal income or excise tax
provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually. Income and
capital gains dividends are determined in accordance with income tax regulations
and may differ from GAAP.
NOTE 3. FEDERAL TAX INFORMATION
The timing and character of income and capital gain distributions are determined
in accordance with income tax regulations, which may differ from GAAP.
Reclassifications are made to the Fund's capital accounts for permanent tax
differences to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
Unrealized appreciation (depreciation) at November 30, 2003, based on cost of
investments for federal income tax purposes was:
Unrealized appreciation $ 53,949,163
Unrealized depreciation (54,490,690)
- -------------------------------------------------------
Net unrealized depreciation $ (541,527)
- -------------------------------------------------------
The following capital loss carryforwards are available to reduce taxable income
arising from future net realized gains on investments, if any, to the extent
permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforward
- -------------------------------------
2005 $ 757,799
- -------------------------------------
2006 738,934
- -------------------------------------
2007 13,268,889
- -------------------------------------
2008 44,818,986
- -------------------------------------
2009 161,087,717
- -------------------------------------
2010 171,019,187
- -------------------------------------
2011 18,463,873
- -------------------------------------
$ 410,155,385
- -------------------------------------
Expired capital loss carryfowards are recorded as a reduction of paid-in
capital.
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
On April 1, 2003, Colonial Management Associates, Inc., the previous investment
advisor to the Fund, merged into Columbia Management Advisors, Inc.
("Columbia"), formerly known as Columbia Management Co., an indirect,
wholly-owned subsidiary of FleetBoston Financial Corporation. As a result of the
merger, Columbia now serves as the Fund's investment advisor. The merger did not
change the way the Fund is managed, the investment personnel assigned to manage
the Fund or the fees paid by the Fund.
INVESTMENT ADVISORY FEE
Columbia is the investment advisor to the Fund and provides administrative and
other services. Columbia receives a monthly fee based on the Fund's average
daily net assets at the following annual rates:
Average Daily Net Assets Fee Rate
- ------------------------------------------
First $1 billion 0.60%
- ------------------------------------------
Next $1 billion 0.55%
- ------------------------------------------
Over $2 billion 0.50%
- ------------------------------------------
32
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
Prior to November 1, 2003, Columbia was entitled to receive a monthly investment
advisory fee based on the Fund's average daily net assets at the following
annual rates:
Average Daily Net Assets Fee Rate
- ------------------------------------------
First $1.5 billion 0.60%
- ------------------------------------------
Over $1.5 billion 0.55%
- ------------------------------------------
For the six months ended November 30, 2003, the Fund's annualized effective
investment advisory fee rate was 0.60%.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State Street
Corporation ("State Street").
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied to
the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services. For the six months ended November 30,
2003, the annualized effective pricing and bookkeeping fee rate was 0.033%.
Columbia pays the total fees collected to State Street under the Outsourcing
Agreement.
TRANSFER AGENT FEE
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services for an annual fee of $34.00 per open account for
transfer agent fees. The Transfer Agent also receives reimbursement for certain
out-of-pocket expenses.
Prior to November 1, 2003, the Transfer Agent was entitled to receive a monthly
transfer agent fee at the annual rate of 0.06% of the Fund's average daily net
assets plus flat-rate charges based on the number of shareholder accounts and
transactions, in addition to reimbursement for certain out-of-pocket expenses.
For the six months ended November 30, 2003, the annualized effective transfer
agent fee rate, exclusive of out-of-pocket expenses, was 0.23%.
Effective October 13, 2003 Liberty Funds Services, Inc. changed its name to
Columbia Funds Services, Inc.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES:
Effective October 13, 2003 Liberty Funds Distributor, Inc. (the "Distributor"),
an affiliate of Columbia and the Fund's principal underwriter, changed its name
to Columbia Funds Distributor, Inc. For the six months ended November 30, 2003,
the Distributor retained net underwriting discounts of $19,898 on sales of the
Fund's Class A shares and received CDSC of $83,090, $418,711 and $8,509 on Class
A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which requires the payment of a
monthly service fee to the Distributor equal to 0.25% annually of the average
daily net assets attributable to Class A, Class B and Class C shares. The Plan
also requires the payment of a monthly distribution fee to the Distributor equal
to 0.75% annually of the average daily net assets attributable to Class B and
Class C shares only. The Distributor has voluntarily agreed to waive a portion
of the Class C share distribution fee so that it will not exceed 0.60% annually.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
EXPENSE LIMITS AND FEE WAIVERS:
Columbia has voluntarily agreed to waive a portion of the transfer agent fee so
that the transfer agent fee will not exceed 0.23% annually of the Fund's average
daily net assets. Columbia, at its discretion, may revise or discontinue this
arrangement any time.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. The Fund could have invested a portion of the
assets utilized in connection with the expense offset arrangement in an
income-producing asset if it had not entered into such an agreement.
FEES PAID TO OFFICERS AND TRUSTEES
The Fund pays no compensation to its officers, all of whom are employees of
Columbia or its affiliates.
33
November 30, 2003 (unaudited)
Columbia High Yield Opportunity Fund
The Fund's Trustees may participate in a deferred compensation plan which may be
terminated at any time. Obligations of the plan will be paid solely out of the
Fund's assets.
NOTE 5. PORTFOLIO INFORMATION
PURCHASES AND SALES OF SECURITIES
For the six months ended November 30, 2003, the cost of purchases and proceeds
from sales of securities, excluding short-term obligations, were $321,274,210
and $350,414,808, respectively.
NOTE 6. LINE OF CREDIT
The Fund and other affiliated funds participate in a $350,000,000 credit
facility, which is used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to the Fund based on its borrowings. In
addition, the Fund has agreed to pay commitment fees on its pro-rata portion of
the unutilized line of credit. The commitment fee is included in "Other
expenses" on the Statement of Operations. For the six months ended November 30,
2003, the Fund did not borrow under these arrangements.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
HIGH-YIELD SECURITIES
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. Government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk bonds." Economic
downturns may disrupt the high yield market and impair the ability of issuers to
repay principal and interest. Also, an increase in interest rates would likely
have an adverse impact on the value of such obligations. Moreover, high yield
securities may be less liquid due to the extent that there is no established
retail secondary market and because of a decline in the value of such
securities.
LEGAL PROCEEDINGS
Columbia, the Distributor and certain of their affiliates (collectively, "the
Columbia Group") have received information requests and subpoenas from various
regulatory authorities, including the Securities and Exchange Commission ("SEC")
and the New York Attorney General, in connection with their investigations of
late trading and market timing in mutual funds. The Columbia Group has not
uncovered any instances where Columbia or the Distributor was knowingly involved
in late trading of mutual fund shares. The Columbia Group has identified a
limited number of investors who had informal arrangements for trading certain
Columbia Fund shares between 1998 and 2003. A substantial majority of the
trading had ended by October 2002. None of these arrangements exists today.
Information relating to those trading arrangements has been supplied to various
regulatory authorities. To the extent that any Columbia Fund, whose shares were
involved in those trading activities, was harmed by them, the Columbia Group has
undertaken to reimburse such Fund.
The SEC staff has issued notices to the effect that it has made a preliminary
determination to recommend that the SEC bring civil enforcement actions,
including injunctive proceedings, against Columbia and the Distributor, alleging
that they have violated certain provisions of the federal securities laws. The
Columbia Group believes that those allegations are based principally on the
trading arrangements referred to above. Columbia and the Distributor are engaged
in discussions with the SEC staff in an effort to reach a satisfactory
resolution of these matters. However, there can be no assurance that such a
resolution will be reached. Any potential resolution of these matters may
include, but not be limited to, sanctions, financial penalties, damages or
injunctions regarding Columbia or the Distributor, and structural changes in the
conduct of their business.
Although the Columbia Group does not believe that these regulatory developments
or their resolution will have a material adverse effect on the Columbia Funds,
or on the ability of Columbia and the Distributor to provide services to the
Columbia Funds, there can be no assurance that these matters or any adverse
publicity or other developments resulting from them will not result in increased
redemptions or reduced sales of Columbia Fund shares, which could increase
transactions costs or operating expenses, or other consequences for the Columbia
Funds.
NOTE 8. COMPARABILITY OF FINANCIAL STATEMENTS
The Fund has changed its fiscal year end from December 31 to May 31.
34
FINANCIAL HIGHLIGHTS
Columbia High Yield Opportunity Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Period
Ended Ended Year Ended December 31,
November May 31, ----------------------------------------------------------------
Class A Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23
Income from Investment
Operations:
Net investment income 0.17(b) 0.14(b) 0.34(b) 0.52(b)(c) 0.61(d) 0.60(d) 0.63
Net realized and unrealized
gain (loss) on investments
and foreign currency 0.27 0.30 (0.53) (0.65)(c) (1.24) (0.20) (0.48)
----------- --------- --------- --------- --------- --------- ---------
Total from Investment
Operations 0.44 0.44 (0.19) (0.13) (0.63) 0.40 0.15
- -----------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared
to Shareholders:
From net investment income (0.17) (0.15) (0.39) (0.51) (0.62) (0.61) (0.62)
From net realized gains -- -- (0.03) (0.04) -- -- --
----------- --------- --------- --------- --------- --------- ---------
Total Distributions Declared
to Shareholders (0.17) (0.15) (0.42) (0.55) (0.62) (0.61) (0.62)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76
Total return (e) 10.43%(f)(g) 11.01%(f) (4.27)% (2.78)% (10.28)% 6.17% 2.12%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Expenses (h) 1.24%(i) 1.29%(i) 1.31% 1.22% 1.16% 1.21% 1.21%
Net investment income (h) 7.49%(i) 8.24%(i) 7.92% 10.34%(c) 10.00% 9.02% 8.81%
Waiver/reimbursement 0.01%(i) --(i)(j) -- -- -- -- --
Portfolio turnover rate 44%(f) 45%(f) 63% 62% 28% 42% 97%
Net assets, end of
period (000's) $ 381,432 $ 376,944 $ 361,780 $ 369,043 $ 390,917 $ 540,201 $ 568,125
- -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001, was to increase net investment
income per share by $0.05, decrease net realized and unrealized loss per
share by $0.05 and increase the ratio of net investment income to average
net assets from 9.76% to 10.34%. Per share data and ratios for periods
prior to December 31, 2001 have not been restated to reflect this change in
presentation.
(d) The per share net investment income amounts do not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e) Total return at net asset value assuming all distributions reinvested and
no initial sales charge or contingent deferred sales charge.
(f) Not annualized.
(g) Had the Investment Advisor not waived a portion of expenses, total return
would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
35
Columbia High Yield Opportunity Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Period
Ended Ended Year Ended December 31,
November May 31, ----------------------------------------------------------------
Class B Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23
- -----------------------------------------------------------------------------------------------------------------------------------
Income From Investment
Operations:
Net investment income 0.15(b) 0.13(b) 0.31(b) 0.48(b)(c) 0.56(d) 0.55(d) 0.58
Net realized and unrealized
gain (loss) on investments
and foreign currency 0.27 0.29 (0.54) (0.65)(c) (1.24) (0.20) (0.48)
----------- --------- --------- --------- --------- --------- ---------
Total from Investment
Operations 0.42 0.42 (0.23) (0.17) (0.68) 0.35 0.10
- ------------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared
to Shareholders:
From net investment income (0.15) (0.13) (0.35) (0.47) (0.57) (0.56) (0.57)
Return of capital -- -- (0.03) (0.04) -- -- --
----------- --------- --------- --------- --------- --------- ---------
Total Distributions Declared
to Shareholders (0.15) (0.13) (0.38) (0.51) (0.57) (0.56) (0.57)
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76
Total return (e) 10.02%(f)(g) 10.67%(f) (4.99)% (3.51)% (10.96)% 5.38% 1.36%
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Expenses (h) 1.99%(i) 2.04%(i) 2.06% 1.97% 1.91% 1.96% 1.96%
Net investment income (h) 6.75%(i) 7.49%(i) 7.17% 9.59%(c) 9.25% 8.27% 8.06%
Waiver/reimbursement 0.01%(i) --(i)(j) -- -- -- -- --
Portfolio turnover rate 44%(f) 45%(f) 63% 62% 28% 42% 97%
Net assets,
end of period (000's) $ 307,237 $ 305,021 $ 280,220 $ 350,464 $ 433,949 $ 627,057 $ 573,626
- -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001, was to increase net investment
income per share by $0.05, decrease net realized and unrealized loss per
share by $0.05 and increase the ratio of net investment income to average
net assets from 9.02% to 9.59%. Per share data and ratios for periods prior
to December 31, 2001 have not been restated to reflect this change in
presentation.
(d) The per share net investment income amounts do not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(f) Not annualized.
(g) Had the Investment Advisor not waived a portion of expenses, total return
would have been reduced.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
(j) Rounds to less than 0.01%.
36
Columbia High Yield Opportunity Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Period
Ended Ended Year Ended December 31,
November May 31, ----------------------------------------------------------------
Class C Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76 $ 7.23
- ------------------------------ ---------------------------------------------------------------------------------------------------
Income From Investment
Operations:
Net investment income 0.15(b) 0.13(b) 0.31(b) 0.49(b)(c) 0.57(d) 0.56(d) 0.58
Net realized and unrealized
gain (loss) on investments
and foreign currency 0.28 0.29 (0.53) (0.65)(c) (1.24) (0.20) (0.47)
----------- --------- --------- --------- --------- --------- ---------
Total from Investment
Operations 0.43 0.42 (0.22) (0.16) (0.67) 0.36 0.11
- ------------------------------ ---------------------------------------------------------------------------------------------------
Less Distributions Declared
to Shareholders:
From net investment income (0.16) (0.13) (0.36) (0.48) (0.58) (0.57) (0.58)
Return of capital -- -- (0.03) (0.04) -- -- --
----------- --------- --------- --------- --------- --------- ---------
Total Distributions Declared
to Shareholders (0.16) (0.13) (0.39) (0.52) (0.58) (0.57) (0.58)
- ------------------------------ ---------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.76
Total return (e)(f) 10.11%(g) 10.74%(g) (4.85)% (3.37)% (10.78)% 5.54% 1.51%
- ------------------------------ ---------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Expenses (h) 1.84%(i) 1.89%(i) 1.91% 1.82% 1.76% 1.81% 1.81%
Net investment income (h) 6.89%(i) 7.64%(i) 7.32% 9.74%(c) 9.40% 8.42% 8.21%
Waiver/reimbursement 0.16%(i) 0.15%(i) 0.15% 0.15% 0.15% 0.15% 0.15%
Portfolio turnover rate 44%(g) 45%(g) 63% 62% 28% 42% 97%
Net assets, end of
period (000's) $ 57,728 $ 51,471 $ 46,568 $ 52,122 $ 48,904 $ 56,068 $ 34,302
- -----------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31.
(b) Per share data was calculated using average shares outstanding during the
period.
(c) Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001, was to increase net investment
income per share by $0.05, decrease net realized and unrealized loss per
share by $0.05 and increase the ratio of net investment income to average
net assets from 9.16% to 9.74%. Per share data and ratios for periods prior
to December 31, 2001 have not been restated to reflect this change in
presentation.
(d) The per share net investment income amounts do not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e) Total return at net asset value assuming all distributions reinvested and
no contingent deferred sales charge.
(f) Had the Investment Advisor/Distributor not waived a portion of expenses,
total return would have been reduced.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(i) Annualized.
37
Columbia High Yield Opportunity Fund
Selected data for a share outstanding throughout each period is as follows:
(unaudited)
Six Months Period
Ended Ended Year Ended December 31,
November May 31, ------------------------------------------------------------------
Class Z Shares 30, 2003 2003 (a) 2002 2001 2000 1999 1998 (b)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55 $ 6.79
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.17(c) 0.15(c) 0.33(c) 0.53(c)(d) 0.62(e) 0.60(e)
Net realized and unrealized
gain (loss) on investments
and foreign currency 0.28 0.29 (0.51) (0.65)(d) (1.24) (0.23)
--------- --------- --------- -------- --------- ---------
Total from Investment
Operations 0.45 0.44 (0.18) (0.12) (0.62) 0.37
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions Declared
to Shareholders:
From net investment income (0.18) (0.15) (0.40) (0.52) (0.63) (0.61)
Return of capital -- -- (0.03) (0.04) -- --
--------- --------- --------- -------- --------- ---------
Total Distributions Declared
to Shareholders (0.18) (0.15) (0.43) (0.56) (0.63) (0.61)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 4.57 $ 4.30 $ 4.01 $ 4.62 $ 5.30 $ 6.55
Total return (f) 10.56%(g)(h) 11.12%(g) (4.03)% (2.53)% (10.06)% 5.83%(g)
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net
Assets/Supplemental Data:
Expenses (i) 0.99%(j) 1.04%(j) 1.06% 0.97% 0.91% 0.95%(j)
Net investment income (i) 7.79%(j) 8.49%(j) 8.17% 10.59%(d) 10.25% 9.22%(j)
Waiver/reimbursement 0.01%(j) --(j)(k) -- -- -- --
Portfolio turnover rate 44%(g) 45%(g) 63% 62% 28% 42%
Net assets, end of
period (000's) $ 30,298 $ 45,803 $ 35,541 $ 1,978 $ 566 $ 418
- --------------------------------------------------------------------------------------------------------------------------------
(a) The Fund has changed its fiscal year end from December 31 to May 31.
(b) Class Z shares were initially offered on January 8, 1999. Per share data
and total returns reflect activity from that date.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) Effective January 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended December 31, 2001, was to increase net investment
income per share by $0.05, decrease net realized and unrealized loss per
share by $0.05 and increase the ratio of net investment income to average
net assets from 10.01% to 10.59%. Per share data and ratios for periods
prior to December 31, 2001 have not been restated to reflect this change in
presentation.
(e) The per share net investment income amounts do not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(f) Total return at net asset value assuming all distributions reinvested. (g)
Not annualized.
(h) Had the Investment Advisor not waived a portion of expenses, total return
would have been reduced.
(i) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(j) Annualized.
(k) Rounds to less than 0.01%.
38
Important Information About This Report
Columbia High Yield Opportunity Fund
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia High Yield
Opportunity Fund. This report may also be used as sales literature when preceded
or accompanied by the current prospectus which provides details of sales
charges, investment objectives and operating policies of the fund and with the
most recent copy of the Columbia Funds Performance Update.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to its portfolio securities is available (i) without
charge, upon request, by calling 800-345-6611 and (ii) on the Securities and
Exchange Commissionwebsite at http://www.sec.gov.
TRANSFER AGENT
Columbia Funds Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800.345.6611
DISTRIBUTOR
Columbia Funds Distributor, Inc.
One Financial Center
Boston MA 02111
INVESTMENT ADVISOR
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02111
39
Columbia Funds
Columbia High Yield Opportunity Fund
- --------------------------------------------------------------------------------
Large Growth Columbia Common Stock
Columbia Growth
Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II
Columbia Young Investor
- --------------------------------------------------------------------------------
Large Value Columbia Disciplined Value
Columbia Growth & Income
Columbia Large Cap Core
Columbia Tax-Managed Value
- --------------------------------------------------------------------------------
Midcap Growth Columbia Acorn Select
Columbia Mid Cap Growth
Columbia Tax-Managed Aggressive Growth
- --------------------------------------------------------------------------------
Midcap Value Columbia Dividend Income
Columbia Mid Cap
Columbia Strategic Investor
- --------------------------------------------------------------------------------
Small Growth Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
- --------------------------------------------------------------------------------
Small Value Columbia Small Cap
Columbia Small-Cap Value
- --------------------------------------------------------------------------------
Balanced Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
- --------------------------------------------------------------------------------
Specialty Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
- --------------------------------------------------------------------------------
Taxable Fixed-Income Columbia Contrarian Income
Columbia Corporate Bond
Columbia Federal Securities
Columbia Fixed Income Securities
Columbia High Yield
Columbia High Yield Opportunities
Columbia Income
Columbia Intermediate Bond
Columbia Intermediate Government Income
Columbia Quality Plus Bond
Columbia Short Term Bond
Columbia Strategic Income
- --------------------------------------------------------------------------------
Floating Rate Columbia Floating Rate
Columbia Floating Rate Advantage
- --------------------------------------------------------------------------------
Tax Exempt Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals
Columbia National Municipal Bond
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
40
Columbia High Yield Opportunity Fund
- --------------------------------------------------------------------------------
Single State Tax Exempt Columbia California Tax-Exempt
Columbia Connecticut Intermediate Municipal Bond
Columbia Connecticut Tax-Exempt
Columbia Florida Intermediate Municipal Bond
Columbia Massachusetts Intermediate Municipal Bond
Columbia Massachusetts Tax-Exempt
Columbia New Jersey Intermediate Municipal Bond
Columbia New York Intermediate Municipal Bond
Columbia New York Tax-Exempt
Columbia Oregon Municipal Bond
Columbia Pennsylvania Intermediate Municipal Bond
Columbia Rhode Island Intermediate Municipal Bond
- --------------------------------------------------------------------------------
Money Market Columbia Money Market
Columbia Municipal Money Market
- --------------------------------------------------------------------------------
International/Global Columbia Acorn International
Columbia Acorn International Select
Columbia Europe
Columbia Global Equity
Columbia International Stock
Columbia Newport Asia Pacific
Columbia Newport Greater China
Columbia Newport Japan Opportunities*
Columbia Newport Tiger
- --------------------------------------------------------------------------------
Index Funds Columbia Large Company Index
Columbia Small Company Index
Columbia U.S. Treasury Index
Columbia funds are offered only by prospectus. Please see your financial advisor
for a prospectus, which describes in detail fund objectives, investment
policies, risks, sales charges, fees, liquidity and other matters of interest.
Please read the prospectus carefully before you invest or send money.
* As of October 17, 2003, this fund is closed to new investors. It is scheduled
for liquidation on December 5, 2003.
For complete product information on any Columbia fund, visit our website at
www.columbiafunds.com.
Columbia Management Group and Columbia Management refer collectively to the
various investment advisory subsidiaries of Columbia Management Group,
including Columbia Management Advisors, Inc., the registered investment
advisor, and to Columbia Funds Distributor, Inc.
41
eDelivery
[photo of keyboard]
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia High Yield Opportunity Fund SEMIANNUAL REPORT, NOVEMBER 30, 2003
PRSRT STD
U.S. POSTAGE
PAID
HOLLISTON, MA
PERMIT NO. 20
[LOGO]:
COLUMBIA FUNDS
A MEMBER OF COLUMBIA MANAGEMENT GROUP
(C)2004 Columbia Funds Distributor, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
Item 2. Code of Ethics.
Not applicable at this time.
Item 3. Audit Committee Financial Expert.
Not applicable at this time.
Item 4. Principal Accountant Fees and Services.
Not applicable at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable at this time.
Item 10. 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 the principal executive officer and principal financial
officer, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting.
Item 11. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Columbia Funds Trust I
-----------------------------------------------------------
By (Signature and Title) /s/ Joseph R. Palombo
-------------------------
Joseph R. Palombo, President
Date February 4, 2004
----------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Joseph R. Palombo
--------------------------
Joseph R. Palombo, President
Date February 4, 2004
----------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
--------------------------
J. Kevin Connaughton, Treasurer
Date February 4, 2004
----------------------------------------------