UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-6529
Columbia Funds Trust VI
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(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
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(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
Date of fiscal year end: 06/30/05
Date of reporting period: 06/30/05
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
Item 1. Reports to Stockholders.
[GRAPHIC]
COLUMBIA SMALL CAP VALUE FUND
Annual Report
June 30, 2005
PRESIDENT'S MESSAGE
--------------------------
Columbia Small Cap Value Fund
[PHOTO]
Dear Shareholder:
Columbia Management, the asset management division of Bank of America, is in
the final stages of a significant business integration effort. Over the last
year, we have been integrating various components of the Nations Funds, Galaxy
Funds and Columbia Funds, which will result in a single fund family that covers
a wide range of markets, sectors and asset classes. Our team of talented,
seasoned investment professionals will continue to strive to achieve strong
results within their investment categories. Our objective is not only to
provide our shareholders with the best products but also to enhance the breadth
and availability of our services. Given our ability to now leverage the size
and scale of the Columbia Management business, I am pleased that these efforts
will also result in substantial cost savings to the funds.
Our goal is to create a more simplified, clearly delineated product line.
Through thoughtful project planning and execution, we will initially reduce the
number of retail mutual funds from over 140 to fewer than 90. Earlier this year
several fund mergers and liquidations were successfully completed. As we work
to complete the remaining product and service provider consolidations in the
coming months, we remain committed to building a mutual fund business that
meets, and hopefully exceeds, your desire for personal financial solutions. We
will continue to strive for the highest standards of performance and service
excellence. The asset management business is in a time of transformation and we
are committed to being progressive and innovative in our approach to the
business. We value the confidence you have placed in us to assist you in
managing your funds during these changing times. As with all businesses within
Bank of America, we understand that your trust must be continuously earned and
will remain focused on producing results for you.
In the pages that follow, you'll find a discussion of the economic environment
during the period followed by a detailed report from the fund's manager or
managers on key factors that influenced performance. We encourage you to read
the manager reports carefully and discuss any questions you have with your
financial advisor. As always, we thank you for choosing Columbia Management. We
look forward to helping you keep your long-term financial goals on target in
the years to come.
Sincerely,
/s/ Christopher Wilson
Christopher L. Wilson
President, Columbia Funds
Christopher L. Wilson is Head of Mutual Funds for Columbia Management,
President of Columbia Funds, President & CEO of Nations Funds and President of
Galaxy Funds. He is responsible for the day-to-day delivery of mutual fund
services to the firm's investors. With the exception of distribution, Chris
oversees all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. Chris joined Bank of
America in August 2004.
Table of Contents
Performance Information.... 1
Fund Profile............... 2
Understanding Your Expenses 3
Economic Update............ 4
Portfolio Manager's Report. 5
Financial Statements....... 7
Investment Portfolio..... 8
Statement of Assets and Liabilities.. 16
Statement of Operations.............. 17
Statement of Changes in Net Assets... 18
Notes to Financial Statements........ 20
Financial Highlights................. 26
Report of Independent
Registered Public Accounting Firm...... 30
Unaudited Information.................. 31
Trustees............................... 32
Officers............................... 34
Columbia Funds......................... 35
Important Information
About This Report...................... 37
The views expressed in the President's Message and Portfolio Manager's Report
reflect the current views of the respective parties. These views are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict so actual outcomes and results may
differ significantly from the views expressed. These views are subject to
change at any time based upon economic, market or other conditions and the
respective parties disclaim any responsibility to update such views. These
views may not be relied on as investment advice and, because investment
decisions for a Columbia Fund are based on numerous factors, may not be relied
on as an indication of trading intent on behalf of any particular Columbia
Fund. References to specific company securities should not be construed as a
recommendation or investment advice.
--------------------------
Not FDIC May Lose Value
Insured -----------------
No Bank Guarantee
- -----------------
PERFORMANCE INFORMATION
----------------------------
Columbia Small Cap Value Fund
Performance of a $10,000 investment 07/01/95 - 06/30/05 ($)
sales charge: without with
----------------------------
Class A 32,558 30,686
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Class B 30,193 30,193
----------------------------
Class C 29,719 29,719
----------------------------
Class Z 33,438 n/a
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results. The
investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Please visit
www.columbiafunds.com for daily and most recent month-end performance updates.
Growth of a $10,000 investment 07/01/95 - 06/30/05
[CHART]
Class A Class A
shares without shares with Russell 2000
sales charge sales charge Value Index
-------------- ------------- ------------
07/01/1995 $10,000 $ 9,425 $10,000
07/31/1995 11,155 10,514 10,365
08/31/1995 11,272 10,624 10,673
09/30/1995 11,519 10,857 10,832
10/31/1995 11,051 10,416 10,400
11/30/1995 11,456 10,797 10,813
12/31/1995 11,357 10,704 11,148
01/31/1996 11,215 10,570 11,221
02/29/1996 11,774 11,097 11,397
03/31/1996 12,167 11,467 11,637
04/30/1996 12,811 12,074 11,955
05/31/1996 13,274 12,511 12,257
06/30/1996 12,531 11,811 12,112
07/31/1996 11,674 11,003 11,468
08/31/1996 12,190 11,489 11,966
09/30/1996 12,814 12,077 12,292
10/31/1996 12,601 11,877 12,435
11/30/1996 13,354 12,586 13,104
12/31/1996 13,440 12,668 13,530
01/31/1997 13,578 12,797 13,738
02/28/1997 13,294 12,529 13,869
03/31/1997 12,686 11,957 13,497
04/30/1997 12,873 12,133 13,695
05/31/1997 14,078 13,268 14,786
06/30/1997 14,979 14,117 15,534
07/31/1997 15,870 14,957 16,186
08/31/1997 16,086 15,161 16,443
09/30/1997 17,154 16,167 17,537
10/31/1997 16,595 15,640 17,060
11/30/1997 16,600 15,645 17,248
12/31/1997 16,649 15,692 17,832
01/31/1998 16,539 15,588 17,510
02/28/1998 17,899 16,870 18,569
03/31/1998 18,930 17,841 19,323
04/30/1998 19,180 18,077 19,417
05/31/1998 17,950 16,918 18,730
06/30/1998 17,816 16,791 18,625
07/31/1998 16,159 15,230 17,167
08/31/1998 12,879 12,138 14,479
09/30/1998 13,165 12,408 15,297
10/31/1998 14,174 13,359 15,751
11/30/1998 15,273 14,395 16,178
12/31/1998 15,621 14,723 16,686
01/31/1999 15,251 14,374 16,307
02/28/1999 13,694 12,906 15,193
03/31/1999 13,449 12,675 15,069
04/30/1999 14,469 13,637 16,444
05/31/1999 14,969 14,108 16,949
06/30/1999 15,807 14,898 17,563
07/31/1999 15,739 14,834 17,146
08/31/1999 14,765 13,916 16,519
09/30/1999 14,682 13,838 16,189
10/31/1999 14,780 13,930 15,865
11/30/1999 15,233 14,357 15,947
12/31/1999 16,264 15,329 16,437
01/31/2000 15,400 14,515 16,006
02/29/2000 16,113 15,187 16,984
03/31/2000 16,566 15,613 17,064
04/30/2000 16,665 15,707 17,165
05/31/2000 16,244 15,310 16,902
06/30/2000 16,952 15,977 17,396
07/31/2000 17,082 16,100 17,975
08/31/2000 18,473 17,411 18,778
09/30/2000 18,613 17,543 18,671
10/31/2000 18,628 17,557 18,604
11/30/2000 17,227 16,237 18,225
12/31/2000 19,348 18,236 20,182
01/31/2001 19,294 18,185 20,739
02/28/2001 18,698 17,623 20,710
03/31/2001 18,298 17,246 20,379
04/30/2001 19,502 18,380 21,322
05/31/2001 20,174 19,014 21,870
06/30/2001 20,322 19,153 22,749
07/31/2001 20,316 19,147 22,240
08/31/2001 19,948 18,801 22,162
09/30/2001 17,596 16,584 19,715
10/31/2001 18,008 16,972 20,230
11/30/2001 19,259 18,152 21,684
12/31/2001 20,679 19,490 23,011
01/31/2002 20,811 19,614 23,317
02/28/2002 21,163 19,946 23,460
03/31/2002 22,701 21,396 25,214
04/30/2002 23,162 21,830 26,102
05/31/2002 22,372 21,086 25,238
06/30/2002 21,630 20,386 24,680
07/31/2002 18,991 17,899 21,013
08/31/2002 19,336 18,225 20,920
09/30/2002 18,018 16,982 19,427
10/31/2002 18,378 17,321 19,718
11/30/2002 19,800 18,662 21,291
12/31/2002 19,240 18,134 20,382
01/31/2003 18,674 17,601 19,807
02/28/2003 17,716 16,698 19,142
03/31/2003 17,750 16,729 19,347
04/30/2003 19,119 18,019 21,185
05/31/2003 20,704 19,513 23,348
06/30/2003 21,161 19,944 23,742
07/31/2003 22,281 20,999 24,927
08/31/2003 23,299 21,959 25,874
09/30/2003 23,063 21,737 25,577
10/31/2003 24,945 23,511 27,661
11/30/2003 25,936 24,444 28,723
12/31/2003 26,825 25,283 29,763
01/31/2004 27,791 26,193 30,793
02/29/2004 28,250 26,625 31,390
03/31/2004 28,812 27,155 31,824
04/30/2004 27,622 26,034 30,178
05/31/2004 27,796 26,198 30,543
06/30/2004 29,325 27,638 32,095
07/31/2004 27,976 26,367 30,619
08/31/2004 27,844 26,243 30,919
09/30/2004 28,986 27,319 32,143
10/31/2004 29,397 27,707 32,641
11/30/2004 32,061 30,217 35,537
12/31/2004 32,943 31,048 36,386
01/31/2005 31,773 29,946 34,978
02/28/2005 32,482 30,614 35,674
03/31/2005 31,929 30,093 34,939
04/30/2005 30,042 28,315 33,136
05/31/2005 31,259 29,462 35,157
06/30/2005 32,558 30,686 36,713
The chart above shows the growth in value of a hypothetical $10,000 investment
in Class A Shares of Columbia Small Cap Value Fund during the stated time
period, and does not reflect the deduction of taxes a shareholder would pay on
fund distributions or the redemption of fund shares. The Russell 2000 Value
Index measures the performance of those Russell 2000 Index companies with lower
price-to-book ratios and lower forecasted growth values. Unlike the fund,
indices are not investments, they do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
Securities in the fund may not match those in an index.
Average annual total return as of 06/30/05 (%)
Share class A B C Z
---------------------------------------------------------------
Inception 07/25/86 11/09/92 01/15/96 07/31/95
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Sales charge without with without with without with without
---------------------------------------------------------------
1-year 10.99 4.61 10.18 5.18 10.19 9.19 11.34
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5-year 13.93 12.59 13.06 12.82 13.07 13.07 14.24
---------------------------------------------------------------
10-year 12.53 11.86 11.68 11.68 11.51 11.51 12.83
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THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM INITIAL SALES CHARGE OF
5.75% FOR CLASS A SHARES, MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 5.00% FOR
CLASS B SHARES AND 1.00% FOR CLASS C SHARES FOR THE FIRST YEAR ONLY. THE
"WITHOUT SALES CHARGE" RETURNS DO NOT INCLUDE THE EFFECT OF SALES CHARGES. IF
THEY HAD, RETURNS WOULD HAVE BEEN LOWER. ALL RESULTS SHOWN ASSUME REINVESTMENT
OF DISTRIBUTIONS. CLASS Z SHARES ARE SOLD AT NET ASSET VALUE WITH NO RULE 12B-1
FEES. CLASS Z SHARES HAVE LIMITED ELIGIBILITY AND THE INVESTMENT MINIMUM
REQUIREMENT MAY VARY. PLEASE SEE THE FUND'S PROSPECTUS FOR DETAILS. PERFORMANCE
FOR DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND
FEES ASSOCIATED WITH EACH CLASS.
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.
Class C and class Z are newer classes of shares. Class C share performance
information includes returns of the fund's class B shares for periods prior to
the inception of class C shares. Class B shares would have substantially
similar annual returns because class B and class C shares generally have
similar expense structures. Class Z share 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. These returns have
not been adjusted to reflect any difference in expenses (such as 12b-1 fees)
between any of the predecessor shares and the newer classes of shares. Had the
expense differential been reflected, the returns for the periods prior to the
inception of the newer class shares would have been different. Class A shares
were initially offered on July 25, 1986, class B shares were initially offered
on November 9, 1992, class C shares were initially offered on January 15, 1996
and class Z shares were initially offered on July 31, 1995.
1
FUND PROFILE
-----------------------
Columbia Small Cap
Value Fund
The information below gives you a snapshot of your fund at the end of the
reporting period. Your fund is actively managed and the composition of its
portfolio will change over time.
Top 10 holdings as of 06/30/05 (%)
American Greetings 1.0
---------------------------
Lufkin Industries 1.0
---------------------------
Kindred Healthcare 1.0
---------------------------
Watsco 1.0
---------------------------
Scientific Games 0.9
---------------------------
Pediatrix Medical Group 0.9
---------------------------
Greif 0.9
---------------------------
Eagle Materials 0.9
---------------------------
Precision Castparts 0.9
---------------------------
GameStop 0.9
---------------------------
Top 5 sectors as of 06/30/05 (%)
Financials 27.0
---------------------------
Industrials 15.7
---------------------------
Consumer discretionary 13.8
---------------------------
Information technology 11.3
---------------------------
Health Care 9.5
---------------------------
Portfolio characteristics and holdings are subject to change periodically and
may not be representative of current holdings.
Sector breakdowns and portfolio holdings are calculated as a percentage of net
assets.
Management Style is determined by Columbia Management, and is based on the
investment strategy and process as outlined in the fund's prospectus.
Past performance is no guarantee of future results.
Summary
.. For the 12-month period ended June 30, 2005, the fund's class A shares
returned 10.99% without sales charge.
.. The fund trailed its benchmark, the Russell 2000 Value Index, and its peer
group, the Morningstar Small Cap Value Category.
.. During this period, the financially strong companies we favored did not
perform as well as companies with high levels of debt on their balance
sheets. However, we believe that our focus is prudent for the longer term.
[FLOW CHART]
Class A shares Russell 2000 Value Index
-------------- ------------------------
10.99% 14.39%
Objective
Seeks long-term growth by investing primarily in smaller capitalization equity
securities
Total Net Assets
$720.2 million
Management Style
[GRAPHIC]
2
UNDERSTANDING YOUR EXPENSES
-----------------------------
Columbia Small Cap Value Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need
your account balance at the end of the period:
.. For shareholders who receive their account statements from Columbia Funds
Services, Inc., on or about August 22, 2005, Columbia Funds Services, Inc.
will undergo a name change to Columbia Management Services, Inc., your
account balance is available online at www.columbiafunds.com or by calling
Shareholder Services at 800.345.6611
.. For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance
1.Divide your ending account balance by $1,000. For example, if an account
balance was $8,600 at the end of the period, the result would be 8.6
2.In the section of the table below titled "Expenses paid during the period,"
locate the amount for your share class. You will find this number in the
column labeled "actual." Multiply this number by the result from step 1. Your
answer is an estimate of the expenses you paid on your account during the
period
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory, Rule 12b-1 fees and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare this cost with the continuing costs of
investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total
return for the period. The amount listed in the "hypothetical" column for each
share class assumes that the return each year is 5% before expenses and
includes the fund's actual expense ratio. You should not use the hypothetical
account values and expenses to estimate either your actual account balance at
the end of the period or the expenses you paid during this reporting period.
01/01/05 - 06/30/05
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
- -------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- -------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 988.10 1,018.15 6.61 6.71 1.34
- -------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 984.68 1,014.43 10.28 10.44 2.09
- -------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 984.58 1,014.43 10.28 10.44 2.09
- -------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 989.59 1,019.39 5.38 5.46 1.09
- -------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to the fund's respective class
annualized expense ratio, multiplied by the average account value over the
period, then multiplied by the number of days in the fund's most recent fiscal
half-year and divided by 365.
It is important to note that the expense amounts shown in the table are meant
to highlight only continuing costs of investing in the fund and do not reflect
any transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided will not help you determine the
relative total costs of owning different funds. If these transactional costs
were included, your costs would have been higher.
Compare with other funds
Since all mutual funds are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this
information to compare the ongoing cost of investing in the fund with other
funds. To do so, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds. As you compare
hypothetical examples of other fund companies, it is important to note that
hypothetical examples are meant to highlight the continuing cost of investing
in a fund and do not reflect any transactional costs, such as sales charges or
redemption or exchange fees.
3
ECONOMIC UPDATE
-----------------------------
Columbia Small Cap Value Fund
The US economy moved ahead at a steady pace during the 12-month period that
began July 1, 2004 and ended June 30, 2005. Gross domestic product expanded at
an estimated annualized rate of approximately 3.7% as job growth helped buoy
consumer spending and rising profits boosted business spending. Record high
energy prices failed to put a significant damper on growth.
Job growth dominated the economic news and drove consumer confidence readings
both up and down, depending on the number of new jobs reported. Overall, the
labor market improved during the period and consumers remained significantly
more optimistic about prospects for the US economy and about their own
employment than they were a year ago.
Consumer spending grew during the period, as retail sales and the housing
market remained strong. The business sector contributed to the economy's
growth. Yet, given a maturing economic cycle, two straight years of
double-digit profit growth and a significant build-up of cash on corporate
balance sheets, business spending was not as robust as expected.
Stocks rebounded but remained volatile
Buoyed by strong gains in the fourth quarter of 2004, the S&P 500 Index -- a
broad measure of large company stock market performance -- returned 6.32% for
the period. Returns were lackluster throughout most of 2004, but most segments
of the stock market bounced back after the presidential election was settled in
November. Stocks retreated early in 2005 as rising energy prices and higher
interest rates appeared to turn investors cautious once again. However, small
and mid-cap stocks outperformed large cap stocks and value stocks led growth
stocks by a significant margin. The Russell 2000 Value Index, which measures
the return of small-cap value stocks, returned 14.39% for the 12-month period,
compared to a 4.29% return for the Russell 2000 Growth Index. Utilities were
the strongest performing sector of the market, as measured by the S&P Utilities
Index, which gained 37.95%.
Bonds delivered solid gains
The US bond market delivered solid returns despite rising short-term interest
rates, which historically have driven yields on other maturity ranges higher --
and bond prices lower. That was not the case over the past 12 months. After a
brief period of volatility early in 2005, the yield on the 10-year US Treasury
note, a bellwether for the bond market, ended the period at 3.9% --
significantly lower than where it started the period, at 4.6%.
In this environment, the Lehman Brothers Aggregate Bond Index returned 6.80%
for the 12-month period. Municipal bonds did even better as state revenues
strengthened and fiscal constraints helped many states balance their budgets.
High-yield bonds led the fixed income markets, as a stronger economy resulted
in improved credit ratings, stronger balance sheets and higher profits for many
companies in the high-yield universe. The Merrill Lynch US High Yield, Cash Pay
Index returned 10.64%. The sector was hit hard in the spring on news that GM
and Ford bonds had been downgraded by the major rating agencies. High-yield
bonds retreated then bounced back in the final months of the period.
Short-term interest rates moved higher
After a year of the lowest short-term interest rates in recent history, the
Federal Reserve Board (the Fed) raised the federal funds rate, a key short-term
rate, from 1.25% to 3.25% during the period/1/. From the outset, the Fed
indicated that it would raise short-term interest rates at a "measured pace" in
an attempt to balance economic growth against inflationary pressures, and so
far each of its nine increases have been in one-quarter percentage point
increments. In recent testimony, Fed chairman Greenspan suggested that any
future increases would likely follow the same gradual course.
/1/On August 9, 2005, the federal funds rate was increased to 3.5%.
Summary
For the 12-month period ended June 30, 2005
.. Stock market returns, as measured by the S&P 500 Index, got a boost from a
fourth-quarter rally in 2004. Value stocks outperformed growth stocks, and
small cap stocks outperformed large cap stocks, as measured by the Russell
2000 Value Index.
[FLOW CHART]
S&P 500 Index Russell Index
- ------------- -------------
6.32% 14.39%
.. Bonds chalked up solid gains as measured by the Lehman Brothers Aggregate
Bond Index. High-yield bonds led the fixed income markets, as measured by
the Merrill Lynch US High Yield, Cash Pay Index.
[FLOW CHART]
Lehman Index Merrill Lynch Index
- ------------ -------------------
6.80% 10.64%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large capitalization US stocks.
The Russell 2000 Value Index is an unmanaged index that tracks the performance
of those Russell 2000 Index companies with lower price-to-book ratios and lower
forecasted growth values.
The Lehman Brothers Aggregate Bond Index is an unmanaged, market value-weighted
index that tracks the performance of fixed-rate, publicly placed,
dollar-denominated, and non-convertible investment grade debt issues.
The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that
tracks the performance of non-investment-grade corporate bonds.
4
PORTFOLIO MANAGER'S REPORT
-----------------------------
Columbia Small Cap Value Fund
For the 12-month period ended June 30, 2005, Columbia Small-Cap Value Fund
class A shares returned 10.99% without sales charge. Performance fell short of
the Russell 2000 Value Index, which returned 14.39%. The fund also trailed the
average return of its peer group, the Morningstar Small Value Category, which
was 12.85% over the same period./1/
The fund benefited from strong stock selection, especially in the materials and
consumer discretionary sectors. Our focus remained on companies with strong
competitive and financial positions, good earnings growth prospects and
reasonable valuations. However, the fund lost some ground relative to the
Russell Index because it did not own companies with high levels of debt on
their balance sheets. These lower quality companies rallied sharply. However,
we believe our focus on higher quality companies is prudent for the longer
term. In addition, the fund owned more stocks than the index at the smaller end
of the small-cap range. During the period, relatively larger stocks in the
index did better.
Strong stock selection in materials, telecommunication services and consumer
discretionary
The fund's materials stocks far outpaced the sector's return in the Russell
Index. Within the sector, the fund benefited from its emphasis on coal,
titanium, steel and building materials stocks, all of which rose sharply amid
strong global demand and improved pricing. We cut back on steel stocks in early
2005, which helped performance as steel prices softened.
Stock selection within the consumer discretionary sector also contributed to
relative performance. Specialty retailers were among the fund's top performers.
One holding was bought out at a substantial premium and another purchased a
major competitor. The fund also owned a tire retailer and a building materials
retailer, both of which benefited from attractive valuations and good earnings.
Telecom services stocks further aided returns, driven by gains from a wireless
stock.
Contributions from industrial and energy stocks
Although the fund's industrial and energy stocks did not keep pace with the
sectors' returns in the index, they rose nicely. In industrials, the biggest
gainers were highly leveraged, lower quality companies, which the fund did not
own. The fund also held a few smaller-cap industrial stocks that lost ground
when the companies reported moderately disappointing earnings. Energy stocks
posted huge gains, fueled by high oil and gas prices. Among the best performers
were highly leveraged refiners as well as more expensive exploration and
production stocks. Neither of these types of stocks fit with our strategy.
/1/(C)2004, Morningstar, Inc. All rights reserved. The information contained
herein is the proprietary information of Morningstar, Inc., may not be
copied or redistributed for any purpose and may only be used for
noncommercial, personal purposes. The information contained herein is not
represented or warranted to be accurate, correct, complete or timely.
Morningstar, Inc. shall not be responsible for investment decisions, damages
or other losses resulting from the use of this information. Past performance
is no guarantee of future performance. Morningstar, Inc. has not granted
consent for it to be considered or deemed an "expert" under the Securities
Act of 1933.
Net asset value per share as of 06/30/05 ($)
Class A 43.12
-------------
Class B 38.00
-------------
Class C 39.60
-------------
Class Z 44.54
Distributions declared per share 07/01/04 - 06/30/05 ($)
Class A 3.62
------------
Class B 3.38
------------
Class C 3.38
------------
Class Z 3.72
5
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Below-average stakes in financials and utilities
The fund's financials and utilities stocks posted strong gains. However, the
fund had less exposure to these sectors than the Russell index. In financials,
the fund was underweight in real estate investment trusts
(REITs) because we thought the stocks seemed expensive at this point in the
real estate cycle. REITs continued to rally, but we remained comfortable with
our position going forward. The fund's investments in banks, insurance
companies and specialty finance performed in line with the sector's return in
the index. In utilities, the fund's lack of exposure to lower quality companies
hampered returns.
More neutral positioning
In anticipation of moderate economic growth ahead, we trimmed the fund's stake
in the economically-sensitive industrials and materials sectors and shifted
toward health care and consumer staples stocks with more predictable earnings
growth. Going forward, we expect the gap between large-cap and small-cap stock
performance to narrow. As a result, we raised the fund's median market cap to
bring it more in line with the index. We plan to maintain the fund's focus on
companies with stronger balance sheets, which we believe have the potential to
be long-term winners.
[GRAPHIC] Stephen Barbaro has managed the Columbia Small Cap
Value Fund since June 2002 and has been with advisor or
its predecessors or affiliate organizations since 1976.
/s/ Stephen Barbaro
Equity investments are affected by stock market fluctuations that occur in
response to economic and business developments.
Investments in small-cap stocks may be subject to greater volatility and price
fluctuations because they may be thinly traded and less liquid than investments
in larger companies.
Value stocks are stocks of companies that may have experienced adverse business
or industry developments or may be subject to special risks that have caused
the stocks to be out of favor and, in the advisor's opinion, undervalued. If
the advisor's assessment of a company's prospects is wrong, the price of the
company's stock may not approach the value the advisor has placed on it.
We plan to maintain the fund's focus on companies with stronger balance sheets,
which we believe have the potential to be long-term winners.
6
FINANCIAL STATEMENTS
-----------------------------
June 30, 2005 Columbia Small Cap Value Fund
A guide to understanding your fund's financial statements
---------------------------------------------------------------------------
Investment Portfolio The investment portfolio details all of the fund's holdings and their
market value as of the last day of the reporting period. Portfolio
holdings are organized by type of asset, industry, country or geographic
region (if applicable) to demonstrate areas of concentration and
diversification.
---------------------------------------------------------------------------
Statement of Assets and Liabilities This statement details the fund's assets, liabilities, net assets and
share price for each share class as of the last day of the reporting
period. Net assets are calculated by subtracting all the fund's
liabilities (including any unpaid expenses) from the total of the fund's
investment and non-investment assets. The share price for each class is
calculated by dividing net assets for that class by the number of shares
outstanding in that class as of the last day of the reporting period.
---------------------------------------------------------------------------
Statement of Operations This statement details income earned by the fund and the expenses accrued
by the fund during the reporting period. The Statement of Operations also
shows any net gain or loss the fund realized on the sales of its holdings
during the period, as well as any unrealized gains or losses recognized
over the period. The total of these results represents the fund's net
increase or decrease in net assets from operations.
---------------------------------------------------------------------------
Statement of Changes in Net Assets This statement demonstrates how the fund's net assets were affected by its
operating results, distributions to shareholders and shareholder
transactions (e.g., subscriptions, redemptions and dividend reinvestments)
during the reporting period. The Statement of Changes in Net Assets also
details changes in the number of shares outstanding.
---------------------------------------------------------------------------
Notes to Financial Statements These notes disclose the organizational background of the fund, its
significant accounting policies (including those surrounding security
valuation, income recognition and distributions to shareholders), federal
tax information, fees and compensation paid to affiliates and significant
risks and contingencies.
---------------------------------------------------------------------------
Financial Highlights The financial highlights demonstrate how the fund's net asset value per
share was affected by the fund's operating results. The financial
highlights table also discloses the classes' performance and certain key
ratios (e.g., class expenses and net investment income as a percentage of
average net assets).
7
INVESTMENT PORTFOLIO
-----------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - 99.3%
CONSUMER DISCRETIONARY - 13.8% Shares Value ($)
- --------------------------------------- ------------------------------------- ------- ----------
Auto Components - 0.8% BorgWarner, Inc. 78,100 4,191,627
Modine Manufacturing Co. 58,943 1,919,184
Auto Components Total 6,110,811
------------------------------------- ------- ----------
Distributors - 0.8% Building Material Holding Corp. 78,043 5,407,600
Distributors Total 5,407,600
------------------------------------- ------- ----------
Hotels, Restaurants & Leisure - 3.5% Bob Evans Farms, Inc. 73,850 1,722,182
Dave & Buster's, Inc. (a) 158,300 2,919,052
Landry's Restaurants, Inc. 130,000 3,911,700
Lone Star Steakhouse & Saloon, Inc. 173,907 5,288,512
Marcus Corp. 163,000 3,458,860
Scientific Games Corp., Class A (a) 236,200 6,360,866
Vail Resorts, Inc. (a) 51,600 1,449,960
Hotels, Restaurants & Leisure Total 25,111,132
------------------------------------- ------- ----------
Household Durables - 1.8% American Greetings Corp., Class A 284,800 7,547,200
CSS Industries, Inc. 81,100 2,744,424
Kimball International, Inc., Class B 174,534 2,303,849
Household Durables Total 12,595,473
------------------------------------- ------- ----------
Media - 2.3% 4Kids Entertainment, Inc. (a) 154,400 3,069,472
Journal Communications, Inc., Class A 142,360 2,391,648
Liberty Corp. 74,200 2,731,302
Media General, Inc., Class A 44,800 2,901,248
Reader's Digest Association, Inc. 107,800 1,778,700
Scholastic Corp. (a) 94,900 3,658,395
Media Total 16,530,765
------------------------------------- ------- ----------
Specialty Retail - 2.5% GameStop Corp., Class A (a) 188,000 6,149,480
Monro Muffler, Inc. (a) 170,906 5,043,436
Movie Gallery, Inc. 118,678 3,136,659
Pier 1 Imports, Inc. 127,800 1,813,482
Rent-A-Center, Inc. (a) 24,431 568,998
TBC Corp. (a) 48,521 1,316,375
Zale Corp. (a) 7,739 245,249
Specialty Retail Total 18,273,679
------------------------------------- ------- ----------
Textiles, Apparel & Luxury Goods - 2.1% Delta Apparel, Inc. 97,600 1,261,968
Hampshire Group Ltd. (a) 181,400 3,557,254
Kellwood Co. 116,850 3,143,265
Russell Corp. 127,900 2,615,555
Stride Rite Corp. 160,800 2,217,432
Tandy Brands Accessories, Inc. 15,615 170,203
Wolverine World Wide, Inc. 95,180 2,285,272
Textiles, Apparel & Luxury Goods Total 15,250,949
----------
CONSUMER DISCRETIONARY TOTAL 99,280,409
CONSUMER STAPLES - 3.7%
- --------------------------------------- ------------------------------------- ------- ----------
Food & Staples Retailing - 1.4% BJ's Wholesale Club, Inc. (a) 70,300 2,284,047
Performance Food Group Co. (a) 63,400 1,915,314
Weis Markets, Inc. 157,530 6,110,589
Food & Staples Retailing Total 10,309,950
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
CONSUMER STAPLES - (continued) Shares Value ($)
- ---------------------------------- ---------------------------------------- ------- ----------
Food Products - 2.3% Central Garden & Pet Co. (a) 37,290 1,831,685
Corn Products International, Inc. 194,880 4,630,349
Flowers Foods, Inc. 116,979 4,136,377
J & J Snack Foods Corp. 43,267 2,265,027
Lancaster Colony Corp. 28,651 1,229,701
Lance, Inc. 126,600 2,178,786
Food Products Total 16,271,925
----------
CONSUMER STAPLES TOTAL 26,581,875
ENERGY - 6.5%
- ---------------------------------- ---------------------------------------- ------- ----------
Energy Equipment & Services - 1.5% Gulf Island Fabrication, Inc. 1,646 32,723
Lufkin Industries, Inc. 209,078 7,522,626
Universal Compression Holdings, Inc. (a) 91,600 3,319,584
Energy Equipment & Services Total 10,874,933
---------------------------------------- ------- ----------
Oil, Gas & Consumable Fuels - 5.0% Bill Barrett Corp. (a) 30,372 898,404
Bois d'Arc Energy, Inc. (a) 107,874 1,591,142
Cimarex Energy Co. (a) 141,494 5,505,512
Energy Partners Ltd. (a) 154,200 4,041,582
Harvest Natural Resources, Inc. (a) 226,400 2,474,552
Houston Exploration Co. (a) 46,990 2,492,819
InterOil Corp. (a) 66,000 1,793,880
Peabody Energy Corp. 68,200 3,549,128
Range Resources Corp. 159,800 4,298,620
Stone Energy Corp. (a) 90,700 4,435,230
Western Gas Resources, Inc. 131,800 4,599,820
Oil, Gas & Consumable Fuels Total 35,680,689
----------
ENERGY TOTAL 46,555,622
FINANCIALS - 27.0%
- ---------------------------------- ---------------------------------------- ------- ----------
Capital Markets - 0.3% Piper Jaffray Companies, Inc. (a) 74,780 2,275,556
Capital Markets Total 2,275,556
---------------------------------------- ------- ----------
Commercial Banks - 11.8% BancFirst Corp. 20,955 1,822,875
BancorpSouth, Inc. 157,390 3,714,404
BancTrust Financial Group, Inc. 82,600 1,613,178
Bank of Granite Corp. 116,293 2,225,848
Bryn Mawr Bank Corp. 135,864 2,596,361
Capitol Bancorp Ltd. 122,979 4,133,324
Chemical Financial Corp. 120,989 4,005,946
Chittenden Corp. 164,750 4,481,200
Citizens Banking Corp. 68,910 2,082,460
City Holding Co. 43,780 1,598,846
Columbia Banking System, Inc. 91,500 2,252,730
Community Trust Bancorp, Inc. 78,244 2,560,144
Corus Bankshares, Inc. 108,100 5,998,469
First Citizens BancShares, Inc., Class A 17,700 2,558,535
First Financial Bankshares, Inc. 78,200 2,646,288
First Financial Corp. 83,400 2,396,082
Greater Bay Bancorp 118,950 3,136,712
Hancock Holding Co. 60,641 2,086,050
ITLA Capital Corp. (a) 56,900 3,066,910
MASSBANK Corp. 23,300 807,345
Merchants Bancshares, Inc. 94,132 2,469,835
Mid-State Bancshares 165,960 4,608,709
Northrim BanCorp, Inc. 86,000 2,019,280
Sterling Bancshares, Inc. 278,300 4,330,348
TriCo Bancshares 209,228 4,674,154
TrustCo Bank Corp. NY 213,010 2,781,911
UMB Financial Corp. 75,100 4,282,953
Whitney Holding Corp. 125,550 4,096,696
Commercial Banks Total 85,047,593
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
FINANCIALS - (continued) Shares Value ($)
- --------------------------------------- ---------------------------------------------- ------- -----------
Consumer Finance - 0.6% Cash America International, Inc. 215,800 4,341,896
Consumer Finance Total 4,341,896
---------------------------------------------- ------- -----------
Diversified Financial Services - 1.9% Advance America Cash Advance Centers, Inc. 205,100 3,281,600
Metris Companies, Inc. (a) 353,000 5,104,380
MFC Bancorp Ltd. (a) 285,170 5,312,717
Diversified Financial Services Total 13,698,697
---------------------------------------------- ------- -----------
Insurance - 6.0% AmerUs Group Co. 63,400 3,046,370
Argonaut Group, Inc. (a) 34,223 790,209
Baldwin & Lyons, Inc., Class B 97,944 2,360,450
CNA Surety Corp. (a) 183,200 2,720,520
Commerce Group, Inc. 32,900 2,043,419
Delphi Financial Group, Inc., Class A 104,902 4,631,423
Harleysville Group, Inc. 142,300 2,972,647
Horace Mann Educators Corp. 139,600 2,627,272
Navigators Group, Inc. (a) 127,316 4,401,314
Phoenix Companies, Inc. 295,000 3,510,500
ProCentury Corp. 215,700 2,163,471
Quanta Capital Holdings Ltd. (a) 303,220 1,889,061
RLI Corp. 76,881 3,428,893
UICI 125,460 3,734,944
United America Indemnity Ltd., Class A (a) 161,000 2,767,590
Insurance Total 43,088,083
---------------------------------------------- ------- -----------
Real Estate - 6.4% Alexandria Real Estate Equities, Inc., REIT 44,220 3,247,959
BioMed Realty Trust, Inc., REIT 97,750 2,331,338
Brandywine Realty Trust, REIT 114,100 3,497,165
Cousins Properties, Inc., REIT 93,980 2,779,928
EastGroup Properties, Inc., REIT 107,300 4,518,403
Equity One, Inc., REIT 138,900 3,153,030
Getty Realty Corp., REIT 112,280 3,110,156
Mid-America Apartment Communities, Inc., REIT 118,240 5,370,461
Nationwide Health Properties, Inc., REIT 183,700 4,337,157
PS Business Parks, Inc., REIT 122,000 5,422,900
Tanger Factory Outlet Centers, Inc., REIT 128,100 3,449,733
Universal Health Realty Income Trust, REIT 62,100 2,366,631
Urstadt Biddle Properties, Inc., Class A, REIT 135,700 2,350,324
Real Estate Total 45,935,185
-----------
FINANCIALS TOTAL 194,387,010
HEALTH CARE - 9.5%
- --------------------------------------- ---------------------------------------------- ------- -----------
Health Care Equipment & Supplies - 3.2% Bio-Rad Laboratories, Inc., Class A (a) 39,872 2,360,821
Greatbatch, Inc. (a) 125,400 2,997,060
Haemonetics Corp. (a) 79,960 3,249,575
Invacare Corp. 79,400 3,522,184
STERIS Corp. 159,800 4,118,046
Sybron Dental Specialties, Inc. (a) 90,500 3,404,610
Varian, Inc. (a) 46,760 1,767,060
Viasys Healthcare, Inc. (a) 76,100 1,719,099
Health Care Equipment & Supplies Total 23,138,455
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
HEALTH CARE - (continued) Shares Value ($)
- --------------------------------------- ------------------------------------------------ ------- ----------
Health Care Providers & Services - 5.9% Cross Country Healthcare, Inc. (a) 133,800 2,274,600
Genesis HealthCare Corp. (a) 104,250 4,824,690
Gentiva Health Services, Inc. (a) 183,600 3,279,096
Hooper Holmes, Inc. 349,200 1,449,180
Kindred Healthcare, Inc. (a) 187,800 7,438,758
OCA, Inc. (a) 274,600 516,248
Owens & Minor, Inc. 94,300 3,050,605
PAREXEL International Corp. (a) 172,000 3,414,200
Pediatrix Medical Group, Inc. (a) 86,200 6,339,148
RehabCare Group, Inc. (a) 81,700 2,183,841
Res-Care, Inc. (a) 95,200 1,290,912
Symbion, Inc. (a) 120,020 2,862,477
United Surgical Partners International, Inc. (a) 62,800 3,270,624
Health Care Providers & Services Total 42,194,379
------------------------------------------------ ------- ----------
Pharmaceuticals - 0.4% Perrigo Co. 202,700 2,825,638
Pharmaceuticals Total 2,825,638
----------
HEALTH CARE TOTAL 68,158,472
INDUSTRIALS - 15.7%
- --------------------------------------- ------------------------------------------------ ------- ----------
Aerospace & Defense - 2.7% AAR Corp. (a) 196,302 3,083,904
Esterline Technologies Corp. (a) 135,100 5,414,808
Kaman Corp., Class A 165,600 2,987,424
Ladish Co., Inc. (a) 138,502 1,383,635
Precision Castparts Corp. 80,300 6,255,370
Aerospace & Defense Total 19,125,141
------------------------------------------------ ------- ----------
Air Freight & Logistics - 0.3% Ryder System, Inc. 62,700 2,294,820
Air Freight & Logistics Total 2,294,820
------------------------------------------------ ------- ----------
Airlines - 0.5% MAIR Holdings, Inc. (a) 96,621 854,130
Skywest, Inc. 147,000 2,672,460
Airlines Total 3,526,590
------------------------------------------------ ------- ----------
Building Products - 0.5% NCI Building Systems, Inc. (a) 107,200 3,516,160
Building Products Total 3,516,160
------------------------------------------------ ------- ----------
Commercial Services & Supplies - 4.4% ABM Industries, Inc. 146,400 2,854,800
Angelica Corp. 76,300 1,870,113
Casella Waste Systems, Inc., Class A (a) 307,590 3,691,080
Century Business Services, Inc. (a) 185,405 750,890
Consolidated Graphics, Inc. (a) 137,500 5,605,875
Healthcare Services Group, Inc. 263,750 5,296,100
Imagistics International, Inc. (a) 152,200 4,261,600
NCO Group, Inc. (a) 93,900 2,031,057
Sourcecorp, Inc. (a) 93,700 1,857,134
TeleTech Holdings, Inc. (a) 228,000 1,858,200
United Stationers, Inc. (a) 31,650 1,554,015
Commercial Services & Supplies Total 31,630,864
------------------------------------------------ ------- ----------
Construction & Engineering - 1.3% Comfort Systems USA, Inc. (a) 5,684 37,401
Dycom Industries, Inc. (a) 137,200 2,717,932
EMCOR Group, Inc. (a) 45,800 2,239,620
Washington Group International, Inc. (a) 87,900 4,493,448
Construction & Engineering Total 9,488,401
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
INDUSTRIALS - (continued) Shares Value ($)
- ----------------------------------------------- ----------------------------------------------- ------- -----------
Electrical Equipment - 1.3% Genlyte Group, Inc. (a) 104,936 5,114,581
Woodward Governor Co. 51,600 4,335,948
Electrical Equipment Total 9,450,529
----------------------------------------------- ------- -----------
Machinery - 2.3% Briggs & Stratton Corp. 98,000 3,392,760
EnPro Industries, Inc. (a) 148,000 4,272,760
Harsco Corp. 105,500 5,755,025
Kadant, Inc. (a) 64,904 1,423,345
Robbins & Myers, Inc. 76,158 1,638,158
Machinery Total 16,482,048
----------------------------------------------- ------- -----------
Road & Rail - 0.9% Dollar Thrifty Automotive Group, Inc. (a) 93,000 3,532,140
Werner Enterprises, Inc. 156,100 3,065,804
Road & Rail Total 6,597,944
----------------------------------------------- ------- -----------
Trading Companies & Distributors - 1.5% Hughes Supply, Inc. 145,962 4,101,532
Watsco, Inc. 162,400 6,918,240
Trading Companies & Distributors Total 11,019,772
-----------
INDUSTRIALS TOTAL 113,132,269
INFORMATION TECHNOLOGY - 11.3%
- ----------------------------------------------- ----------------------------------------------- ------- -----------
Communications Equipment - 1.0% Anaren, Inc. (a) 186,900 2,457,735
Belden CDT, Inc. 89,550 1,898,460
Black Box Corp. 56,600 2,003,640
Tollgrade Communications, Inc. (a) 148,910 1,116,825
Communications Equipment Total 7,476,660
----------------------------------------------- ------- -----------
Computers & Peripherals - 0.8% Electronics for Imaging, Inc. (a) 48,200 1,014,128
Imation Corp. 73,300 2,843,307
Intergraph Corp. (a) 54,900 1,891,854
Computers & Peripherals Total 5,749,289
----------------------------------------------- ------- -----------
Electronic Equipment & Instruments - 2.6% Agilysys, Inc. 114,879 1,803,600
Anixter International, Inc. (a) 57,400 2,133,558
Benchmark Electronics, Inc. (a) 100,400 3,054,168
Brightpoint, Inc. (a) 215,500 4,781,945
MTS Systems Corp. 103,782 3,485,000
Vishay Intertechnology, Inc. (a) 310,700 3,688,009
Electronic Equipment & Instruments Total 18,946,280
----------------------------------------------- ------- -----------
Internet Software & Services - 0.5% Digitas, Inc. (a) 117,820 1,344,326
Keynote Systems, Inc. (a) 179,900 2,099,433
Internet Software & Services Total 3,443,759
----------------------------------------------- ------- -----------
IT Services - 1.4% Acxiom Corp. 137,641 2,873,944
MAXIMUS, Inc. 62,790 2,215,859
MPS Group, Inc. (a) 511,850 4,821,627
IT Services Total 9,911,430
----------------------------------------------- ------- -----------
Semiconductors & Semiconductor Equipment - 1.9% ATMI, Inc. (a) 63,400 1,839,234
Exar Corp. (a) 176,700 2,631,063
Fairchild Semiconductor International, Inc. (a) 93,490 1,378,978
Integrated Device Technology, Inc. (a) 80,943 870,137
MEMC Electronic Materials, Inc. (a) 221,700 3,496,209
Standard Microsystems Corp. (a) 157,500 3,682,350
Semiconductors & Semiconductor Equipment Total 13,897,971
See Accompanying Notes to Financial Statements.
12
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
INFORMATION TECHNOLOGY - (continued) Shares Value ($)
- --------------------------------------------- ------------------------------------------------- ------- ----------
Software - 3.1% Captaris, Inc. (a) 362,800 1,501,992
Internet Security Systems, Inc. (a) 133,600 2,710,744
Lawson Software, Inc. (a) 178,000 916,700
MSC.Software Corp. (a) 231,500 3,183,125
PLATO Learning, Inc. (a) 288,791 2,131,278
SeaChange International, Inc. (a) 72,700 510,354
Sybase, Inc. (a) 148,550 2,725,892
Take-Two Interactive Software, Inc. (a) 94,350 2,401,207
THQ, Inc. (a) 62,800 1,838,156
Transaction Systems Architects, Inc., Class A (a) 172,900 4,258,527
Software Total 22,177,975
----------
INFORMATION TECHNOLOGY TOTAL 81,603,364
MATERIALS - 7.2%
- --------------------------------------------- ------------------------------------------------- ------- ----------
Chemicals - 2.5% Cytec Industries, Inc. 82,600 3,287,480
H.B. Fuller Co. 122,100 4,158,726
Minerals Technologies, Inc. 62,400 3,843,840
Schulman (A.), Inc. 164,044 2,934,747
Sensient Technologies Corp. 105,900 2,182,599
Stepan Co. 88,500 1,955,850
Chemicals Total 18,363,242
------------------------------------------------- ------- ----------
Construction Materials - 0.9% Eagle Materials, Inc. 67,800 6,277,602
Construction Materials Total 6,277,602
------------------------------------------------- ------- ----------
Containers & Packaging - 1.3% AptarGroup, Inc. 61,800 3,139,440
Greif, Inc., Class A 103,100 6,299,410
Containers & Packaging Total 9,438,850
------------------------------------------------- ------- ----------
Metals & Mining - 1.8% Alpha Natural Resources, Inc. (a) 116,540 2,782,975
AMCOL International Corp. 96,100 1,805,719
Carpenter Technology Corp. 36,700 1,901,060
Metal Management, Inc. 101,900 1,971,765
RTI International Metals, Inc. (a) 92,300 2,899,143
Worthington Industries, Inc. 94,190 1,488,202
Metals & Mining Total 12,848,864
------------------------------------------------- ------- ----------
Paper & Forest Products - 0.7% Glatfelter Co. 221,900 2,751,560
Mercer International, Inc. (a) 316,100 2,304,369
Paper & Forest Products Total 5,055,929
----------
MATERIALS TOTAL 51,984,487
TELECOMMUNICATION SERVICES - 0.6%
- --------------------------------------------- ------------------------------------------------- ------- ----------
Diversified Telecommunication Services - 0.3% North Pittsburgh Systems, Inc. 110,013 2,151,854
Diversified Telecommunication Services Total 2,151,854
------------------------------------------------- ------- ----------
Wireless Telecommunication Services - 0.3% Price Communications Corp. (a) 141,180 2,442,414
Wireless Telecommunication Services Total 2,442,414
----------
TELECOMMUNICATION SERVICES TOTAL 4,594,268
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
Common Stocks - (continued)
UTILITIES - 4.0% Shares Value ($)
- ---------------------------- -------------------------------------------------- --------- -----------
Electric Utilities - 3.3% ALLETE, Inc. 63,400 3,163,660
Central Vermont Public Service Corp. 154,600 2,860,100
CH Energy Group, Inc. 104,200 5,067,246
El Paso Electric Co. (a) 174,900 3,576,705
Maine & Maritimes Corp. 34,900 855,050
MGE Energy, Inc. 60,986 2,218,671
Otter Tail Corp. 88,700 2,424,171
Puget Energy, Inc. 150,900 3,528,042
Electric Utilities Total 23,693,645
-------------------------------------------------- --------- -----------
Gas Utilities - 0.7% Cascade Natural Gas Corp. 66,500 1,363,250
Northwest Natural Gas Co. 50,400 1,927,296
WGL Holdings, Inc. 53,500 1,799,740
Gas Utilities Total 5,090,286
-----------
UTILITIES TOTAL 28,783,931
Total Common Stocks
(cost of $526,122,583) 715,061,707
Short-Term Obligation - 0.5% Par ($)
- ---------------------------- -------------------------------------------------- --------- -----------
Repurchase agreement with State Street Bank &
Trust Co., dated 06/30/05, due 07/01/05 at 2.700%,
collateralized by a U.S. Treasury Bond maturing
02/15/19, market value of $3,976,875 (repurchase
proceeds $3,897,292) 3,897,000 3,897,000
Total Short-Term Obligation
(cost of $3,897,000) 3,897,000
Total Investments - 99.8%
(cost of $530,019,583) (b) 718,958,707
Other Assets & Liabilities, Net - 0.2% 1,235,278
Net Assets - 100.0% 720,193,985
NOTES TO INVESTMENT PORTFOLIO:
(a)Non-income producing security.
(b)Cost for federal income tax purposes is
$531,281,921.
ACRONYM NAME
------- ----
REIT Real Estate Investment Trust
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
At June 30, 2005, the Fund held investment in the following sectors:
SECTOR (UNAUDITED) % OF NET ASSETS
- ------------------------------------------------------------------------------------
Financials 27.0%
Industrials 15.7
Consumer Discretionary 13.8
Information Technology 11.3
Health Care 9.5
Materials 7.2
Energy 6.5
Utilities 4.0
Consumer Staples 3.7
Telecommunication Services 0.6
Short-Term Obligation 0.5
Other Assets & Liabilities, Net 0.2
-----
100.0%
-----
See Accompanying Notes to Financial Statements.
15
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------
June 30, 2005 Columbia Small Cap Value Fund
($)
- ------------------------- -------------------------------------------------------- -----------
Assets Investments, at cost 530,019,583
-----------
Investments, at value 718,958,707
Receivable for:
Investments sold 2,746,001
Fund shares sold 2,667,677
Interest 292
Dividends 671,733
Reimbursement due from Investment Advisor 309
Deferred Trustees' compensation plan 27,980
-----------
Total Assets 725,072,699
-------------------------------------------------------- -----------
Liabilities Payable to custodian bank 20,585
Payable for:
Investments purchased 2,607,834
Fund shares repurchased 1,204,219
Investment advisory fee 468,740
Transfer agent fee 149,448
Pricing and bookkeeping fees 29,127
Chief compliance officer fees 1,680
Trustees' fees 670
Custody fee 3,193
Distribution and service fees 276,080
Deferred Trustees' fees 27,980
Other liabilities 89,158
-----------
Total Liabilities 4,878,714
Net Assets 720,193,985
-------------------------------------------------------- -----------
Composition of Net Assets Paid-in capital 527,248,502
Accumulated net investment loss (21,011)
Accumulated net realized gain 4,027,370
Net unrealized appreciation on investments 188,939,124
-----------
Net Assets 720,193,985
-------------------------------------------------------- -----------
Class A Net assets 396,567,910
Shares outstanding 9,197,111
Net asset value per share 43.12(a)
Maximum offering price per share ($43.12/0.9425) 45.75(b)
-------------------------------------------------------- -----------
Class B Net assets 182,647,806
Shares outstanding 4,806,990
Net asset value and offering price per share 38.00(a)
-------------------------------------------------------- -----------
Class C Net assets 57,470,583
Shares outstanding 1,451,432
Net asset value and offering price per share 39.60(a)
-------------------------------------------------------- -----------
Class Z Net assets 83,507,686
Shares outstanding 1,875,101
Net asset value, offering and redemption price per share 44.54
(a)Redemption price per share is equal to net
asset value less any applicable contingent
deferred sales charge.
(b)On sales of $50,000 or more the offering
price is reduced.
See Accompanying Notes to Financial Statements.
16
STATEMENT OF OPERATIONS
-----------------------------
For the Year Ended June 30, 2005 Columbia Small Cap Value Fund
($)
- --------------------------------------- -------------------------------------------------------------- ----------
Investment Income Dividends 10,468,955
Interest 80,072
----------
Total Investment Income 10,549,027
-------------------------------------------------------------- ----------
Expenses Investment advisory fee 5,216,852
Distribution fee:
Class B 1,483,813
Class C 359,124
Service fee:
Class A 849,614
Class B 494,604
Class C 119,708
Transfer agent fee 1,314,652
Pricing and bookkeeping fees 173,139
Trustees' fees 16,916
Custody fee 61,593
Chief compliance officer fees (See Note 4) 6,072
Non-recurring costs (See Note 8) 12,712
Other expenses 315,753
----------
Total Expenses 10,424,552
Non-recurring costs assumed by Investment Advisor (See Note 8) (12,712)
Custody earnings credit (890)
----------
Net Expenses 10,410,950
----------
Net Investment Income 138,077
-------------------------------------------------------------- ----------
Net Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
on Investments and Foreign Currency Investments 23,628,027
Foreign currency transactions (91)
----------
Net realized gain 23,627,936
Net change in unrealized appreciation on investments 44,908,271
----------
Net Gain 68,536,207
----------
Net Increase in Net Assets from Operations 68,674,284
See Accompanying Notes to Financial Statements.
17
STATEMENT OF CHANGES IN NET ASSETS
-----------------------------
Columbia Small Cap Value Fund
Year Ended June 30,
-------------------------
Increase (Decrease) in Net Assets: 2005 ($) 2004 ($)(a)
- -------------------------------------- ---------------------------------------------------- ----------- -----------
Operations Net investment income (loss) 138,077 (559,272)
Net realized gain on investments and foreign
currency transactions 23,627,936 67,069,586
Net change in unrealized appreciation (depreciation)
on investments and foreign currency translations 44,908,271 93,910,222
----------- -----------
Net Increase from Operations 68,674,284 160,420,536
---------------------------------------------------- ----------- -----------
Distributions Declared to Shareholders From net realized gains:
Class A (27,843,539) (7,140,239)
Class B (17,698,720) (6,385,740)
Class C (3,941,261) (920,797)
Class I -- (77)
Class Z (6,429,930) (1,339,466)
----------- -----------
Total Distributions Declared to Shareholders (55,913,450) (15,786,319)
---------------------------------------------------- ----------- -----------
Share Transactions Class A:
Subscriptions 145,533,028 101,767,098
Distributions reinvested 25,655,362 6,411,053
Redemptions (75,814,920) (63,618,296)
----------- -----------
Net Increase 95,373,470 44,559,855
Class B:
Subscriptions 21,022,513 22,762,819
Distributions reinvested 15,894,102 5,644,770
Redemptions (68,587,715) (62,684,239)
----------- -----------
Net Decrease (31,671,100) (34,276,650)
Class C:
Subscriptions 22,434,664 11,127,187
Distributions reinvested 3,099,402 752,490
Redemptions (7,734,365) (6,986,805)
----------- -----------
Net Increase 17,799,701 4,892,872
Class I:
Subscriptions -- 1,050
Distributions reinvested -- 77
Redemptions -- (2,664)
----------- -----------
Net Decrease -- (1,537)
Class Z:
Subscriptions 48,136,242 56,563,959
Distributions reinvested 2,278,715 693,082
Redemptions (34,331,058) (14,611,150)
----------- -----------
Net Increase 16,083,899 42,645,891
Net Increase from Share Transactions 97,585,970 57,820,431
----------- -----------
Total Increase in Net Assets 110,346,804 202,454,648
---------------------------------------------------- ----------- -----------
Net Assets Beginning of period 609,847,181 407,392,533
End of period 720,193,985 609,847,181
Accumulated net investment loss at end of period (21,011) (26,781)
(a)Effective January 30, 2004, the Class I
shares were liquidated.
See Accompanying Notes to Financial Statements.
18
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Year Ended June 30,
-----------------------
2005 2004 (a)
- ----------------- ------------------------------------- ---------- ----------
Changes in Shares Class A:
Subscriptions 3,468,955 2,683,022
Issued for distributions reinvested 605,222 171,190
Redemptions (1,810,292) (1,699,383)
---------- ----------
Net Increase 2,263,885 1,154,829
Class B:
Subscriptions 565,332 661,962
Issued for distributions reinvested 423,844 168,350
Redemptions (1,851,257) (1,841,257)
---------- ----------
Net Decrease (862,081) (1,010,945)
Class C:
Subscriptions 578,975 308,746
Issued for distributions reinvested 79,309 21,611
Redemptions (200,290) (198,317)
---------- ----------
Net Increase 457,994 132,040
Class I:
Subscriptions -- 26
Issued for distributions reinvested -- 2
Redemptions -- (64)
---------- ----------
Net Decrease -- (36)
Class Z:
Subscriptions 1,105,995 1,477,519
Issued for distributions reinvested 52,121 18,002
Redemptions (792,561) (375,458)
---------- ----------
Net Increase 365,555 1,120,063
(a)Effective January 30, 2004, the Class I
shares were liquidated.
See Accompanying Notes to Financial Statements.
19
NOTES TO FINANCIAL STATEMENTS
-----------------------------
June 30, 2005 Columbia Small Cap Value Fund
Note 1. Organization
Columbia Small Cap Value Fund (the "Fund"), a series of Columbia Funds Trust VI
(the "Trust"), is a diversified portfolio. The Trust is a Massachusetts
business trust registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company.
Investment Goal
The Fund seeks long-term growth by investing primarily in smaller
capitalization equity securities.
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. Effective January 30, 2004, the Class I
shares of the Fund were liquidated.
Class A shares are subject to a maximum front-end sales charge of 5.75% based
on the amount of initial investment. Class A shares purchased without an
initial sales charge in accounts aggregating $1 million to $25 million at the
time of purchase are subject to a 1.00% contingent deferred sales charge
("CDSC") on shares sold within eighteen months of the time of purchase. Class B
shares are subject to a maximum CDSC of 5.00% based upon the holding period
after purchase. Class B shares will convert to Class A shares in a certain
number of years after purchase, depending on the program under which shares
were purchased. Class C shares are subject to a 1.00% CDSC on shares sold
within one year after purchase. Class Z shares are offered continuously at net
asset value. There are certain restrictions on the purchase of Class Z shares,
as described in the Fund's prospectus.
Note 2. Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
Security Valuation
Equity securities are valued at the last sale price on the principal exchange
on which they trade, except for securities traded on the NASDAQ, which are
valued at the NASDAQ official close price. Unlisted securities or listed
securities for which there were no sales during the day are valued at the
closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Investments for which market quotations are not readily available, or have
quotations which management believes are not appropriate, are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees. If a
security is valued at "fair value", such value is likely to be different from
the last quoted market price for the security.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
Repurchase Agreements
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund,
through its custodian, receives delivery of underlying securities
collateralizing a repurchase agreement. Collateral is at least equal, at all
times, to the value of the repurchase obligation including interest. A
repurchase agreement transaction involves certain risks in the event of default
or insolvency of the counterparty. These risks include possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities
and a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its rights.
Income Recognition
Interest income is recorded on the accrual basis. Corporate actions and
dividend income are recorded
20
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
on the ex-date except for certain foreign securities which are recorded as soon
after ex-date as the Fund becomes aware of such, net of non-reclaimable tax
withholdings. Awards from class action litigation are recorded as a reduction
of cost if the Fund still owns the applicable securities on the payment date.
If the Fund no longer owns the applicable securities, the proceeds are recorded
as realized gains.
The Fund estimates components of distributions from real estate investment
trusts (REITs). Distributions received in excess of income are recorded as a
reduction of the cost of the related investments. If the Fund no longer owns
the applicable securities, any distributions received in excess of income are
recorded as realized gains.
Foreign Currency Transactions
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses)
on investments.
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations), and realized and unrealized gains (losses), are
allocated to each class of the Fund on a daily basis, based on the relative net
assets of each class, for purposes of determining the net asset value of each
class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, such that the Fund
should not be subject to federal excise tax. Therefore, no federal income or
excise tax provision is recorded.
Distributions to Shareholders
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
Note 3. Federal Tax Information
The timing and character of income and capital gain distributions are
determined in accordance with income tax regulations, which may differ from
GAAP. Reclassifications are made to the Fund's capital accounts for permanent
tax differences to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
For the year ended June 30, 2005, permanent book and tax basis differences
resulting primarily from differing treatments for REIT adjustments and foreign
currency transactions were identified and reclassified among the components of
the Fund's net assets as follows:
Accumulated Accumulated
Net Investment Net Realized Paid-In
Loss Gain Capital
-----------------------------------
$(132,307) $132,307 $--
-----------------------------------
Net investment income and net realized gains (losses), as disclosed on the
Statement of Operations, and net assets were not affected by this
reclassification.
The tax character of distributions paid during the years ended June 30, 2005
and June 30, 2004 was as follows:
June 30, June 30,
2005 2004
-----------------------------------------------
Distributions paid from:
-----------------------------------------------
Ordinary income* $23,936,007 $9,100,819
-----------------------------------------------
Long-term capital gains 31,977,443 6,685,500
----------- ----------
*For tax purposes short-term capital gains distributions, if any, are
considered ordinary income distributions.
21
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
As of June 30, 2005, the components of distributable earnings on a tax basis
were as follows:
Undistributed Undistributed Net
Ordinary Long-Term Unrealized
Income Capital Gains Appreciation*
-----------------------------------------
$3,543,490 $10,387,332 $187,676,786
-----------------------------------------
*The differences between book-basis and tax-basis net unrealized appreciation
are primarily due to the deferral of losses from wash sales.
Unrealized appreciation and depreciation at June 30, 2005, based on cost of
investments for federal income tax purposes, was:
Unrealized appreciation $200,342,594
Unrealized depreciation (12,665,808)
------------
Net unrealized appreciation $187,676,786
------------------------------------------
The following capital loss carryforwards may be available to reduce taxable
income arising from future net realized gains on investments, if any, to the
extent permitted by the Internal Revenue Code:
Year of Capital Loss
Expiration Carryforward
-----------------------
2006 $1,233,446
2007 1,233,446
2009 2,466,892
2012 3,700,337
------------
$8,634,121
-----------------------
Capital loss carryforwards of $1,233,446 were utilized during the year ended
June 30, 2005.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia Management Advisors, Inc. ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund and provides administrative and other services to the Fund. Columbia
receives a monthly investment advisory fee based on the Fund's average daily
net assets at the following annual rates:
Average Daily Net Assets Annual Fee Rate
----------------------------------------
First $500 million 0.80%
----------------------------------------
$500 to $1billion 0.75%
----------------------------------------
Over $1 billion 0.70%
----------------------------------------
For the year ended June 30, 2005, the Fund's effective investment advisory fee
rate was 0.79%.
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State
Street Corporation ("State Street"). As a result, Columbia pays the total fees
received to State Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual flat fee of $10,000 paid monthly, and in any month that
the Fund's average daily net assets exceed $50 million, an additional monthly
fee. The additional fee rate is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement. This rate is applied
to the average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund.
For the year ended June 30, 2005, the effective pricing and bookkeeping fee
rate for the Fund, inclusive of out-of-pocket expenses, was 0.026%.
Transfer Agent Fee
Columbia Funds Services, Inc. (the "Transfer Agent"), an affiliate of Columbia,
provides shareholder services to the Fund and has subcontracted with Boston
Financial Data Services ("BFDS") to serve as sub-transfer agent. For such
services, the Transfer Agent receives a fee, paid monthly, at the annual rate
of $28.00 per open account. The Transfer Agent also receives reimbursement for
certain out-of-pocket expenses.
For the year ended June 30, 2005, the Fund's effective transfer agent fee rate,
inclusive of out-of-pocket expenses, was 0.20%.
Underwriting Discounts, Service and Distribution Fees
Columbia Funds Distributor, Inc. (the "Distributor"), an affiliate of Columbia,
is the principal underwriter of the Fund. For the year ended June 30, 2005, the
Distributor has retained net underwriting discounts of $158,185 on sales of the
Fund's Class A shares and
22
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
received net CDSC of $842, $231,869 and $7,799 on Class A, Class B and Class C
share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which allows the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets of the Fund attributable to Class A, Class B and Class
C shares. The Plan also requires the payment of a monthly distribution fee to
the Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
Fee Waivers
Columbia has voluntarily agreed to reimburse the Fund for certain expenses so
that total expenses (exclusive of distribution and service fees, brokerage
commissions, interest, taxes and extraordinary expenses, if any) will not
exceed 1.25% 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. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset
arrangement in an income-producing asset if it had not entered into such an
agreement.
Fees Paid to Officers and Trustees
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. The Board
of Trustees appointed a Chief Compliance Officer to the Fund in accordance with
federal securities regulations. The Fund, along with other affiliated funds,
will pay its pro-rata share of the expenses associated with the Office of the
Chief Compliance Officer. The Fund's fee for the Office of the Chief Compliance
Officer will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
Other
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the year ended June 30, 2005, the Fund paid $2,214 to Columbia
for such services. This amount is included in "Other expenses" on the Statement
of Operations.
Note 5. Purchases and Sales of Securities
For the year ended June 30, 2005, the cost of purchases and proceeds from sales
of securities, excluding short-term obligations, were $251,248,579 and
$207,824,364, respectively.
Note 6. Line of Credit
The Fund and other affiliated funds participate in a $350,000,000 committed
unsecured revolving line of credit provided by State Street Bank and Trust
Company. Borrowings are used for temporary or emergency purposes to facilitate
portfolio liquidity. Interest is charged to each participating fund based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.10% per annum is accrued and apportioned
among the participating funds based on their pro-rata portion of the unutilized
line of credit. The commitment fee is included in "Other expenses" on the
Statement of Operations. For the year ended June 30, 2005, the Fund did not
borrow under this arrangement.
Note 7. Shares of Beneficial Interest
As of June 30, 2005, the Fund had shareholders whose shares were beneficially
owned by participant accounts over which Bank of America and/or its affiliates
had either sole or joint investment discretion. Subscription and redemption
activity of these accounts may have a significant effect on the operations of
the Fund. The number of such accounts and the percentage of shares of
beneficial interest outstanding held therein are as follows:
Number of % of Shares
Shareholders Outstanding Held
-----------------------------
1 9.0%
-----------------------------
23
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
As of June 30, 2005, the Fund had shareholders that held greater than 5% of the
shares outstanding. Subscription and redemption activity of these accounts may
have a significant effect on the operations of the Fund. The number of such
accounts and the percentage of shares of beneficial interest outstanding held
therein are as follows:
Number of % of Shares
Shareholders Outstanding Held
-----------------------------
1 5.6%
-----------------------------
Note 8. Disclosure of Significant Risks and Contingencies
Industry Focus
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
Legal Proceedings
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to
collectively as the "Settlements". The Settlements contain substantially the
same terms and conditions as outlined in the agreements in principle which
Columbia Group entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution
consultant (see below). The Columbia Funds have also voluntarily undertaken to
implement certain governance measures designed to maintain the independence of
their boards of trustees. The NYAG Settlement also, among other things,
requires Columbia and its affiliates, Banc of America Capital Management, LLC
and BACAP Distributors, LLC to reduce certain Columbia Funds, Nations Funds and
other mutual funds management fees collectively by $32 million per year for
five years, for a projected total of $160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant,
who is acceptable to the SEC staff and the Columbia Funds' independent
trustees. The distribution plan must be based on a methodology developed in
consultation with the Columbia Group and the Fund's independent trustees and
not unacceptable to the staff of the SEC. At this time, the distribution plan
is still under development. As such, any gain to the Fund or its shareholders
cannot currently be determined.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of
fund shares, which could increase transaction costs or operating expenses, or
have other adverse consequences for the funds.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov.
A copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with events described in detail above, various parties have filed
suit against certain funds, the Trustees of the Columbia Funds, FleetBoston
Financial Corporation and its affiliated entities and/or Bank of America
Corporation and its affiliated entities. More than 300 cases including those
filed against entities unaffiliated with the funds, their Boards, FleetBoston
Financial Corporation and its affiliated entities and/or Bank of America
Corporation and its affiliated entities have been transferred to the Federal
District Court in Maryland and consolidated in a multi-district proceeding (the
"MDL").
The derivative cases purportedly brought on behalf of the Columbia Funds in the
MDL have been consolidated under the lead case. The fund derivative plaintiffs
allege that the funds were harmed by market timing and late trading activity
and seek, among other things, removal of the trustees of the Columbia Funds,
removal of the Columbia Group, disgorgement of all management fees and monetary
damages.
24
- --------------------------------------------------------------------------------
June 30, 2005 Columbia Small Cap Value Fund
On March 21, 2005 purported class action plaintiffs filed suit in Massachusetts
state court alleging that the conduct, including market timing, entitles Class
B shareholders in certain Columbia funds to an exemption from contingent
deferred sales charges upon early redemption (the "CDSC Lawsuit"). The CDSC
Lawsuit has been removed to federal court in Massachusetts and the federal
Judicial Panel has conditionally ordered its transfer to the MDL.
The MDL is ongoing. Accordingly, an estimate of the financial impact of this
litigation on any fund, if any, cannot currently be made.
On January 11, 2005, a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the
Columbia Funds and Columbia. The lawsuit alleges that defendants violated
common law duties to fund shareholders as well as sections of the Investment
Company Act of 1940, by failing to ensure that the Fund and other affiliated
funds participated in securities class action settlements for which the funds
were eligible. Specifically, plaintiffs allege that defendants failed to submit
proof of claims in connection with settlements of securities class action
lawsuits filed against companies in which the funds held positions.
In 2004, certain Columbia funds, advisers and affiliated entities were named as
defendants in certain purported shareholder class and derivative actions making
claims, including claims under the Investment Company and the Investment
Advisers Acts of 1940 and state law. The suits allege, inter alia, that the
fees and expenses paid by the funds are excessive and that the advisers and
their affiliates inappropriately used fund assets to distribute the funds and
for other improper purpose. On March 2, 2005, the actions were consolidated in
the Massachusetts federal court as In re Columbia Entities Litigation. The
plaintiffs filed a consolidated amended complaint on June 9, 2005.
The Fund and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings are
ongoing, however, based on currently available information, Columbia believes
that these lawsuits are without merit, that the likelihood they will have a
material adverse impact on any fund is remote, and that the lawsuits are not
likely to materially affect its ability to provide investment management
services to its clients, including the Fund.
For the year ended June 30, 2005, Columbia has assumed $12,712 of legal,
consulting services and Trustees' fees incurred by the Fund in connection with
these matters.
25
FINANCIAL HIGHLIGHTS
-----------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended June 30,
------------------------------------------------------------------
Class A Shares 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 42.17 $ 31.39 $ 37.54 $ 37.49 $ 32.56
- ------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) (a) 0.11 0.08 0.02 (0.20) (0.06)
Net realized and unrealized gain (loss) on
investments and foreign currency 4.46 11.88 (1.54) 2.42 6.38
-------- -------- -------- -------- --------
Total from Investment Operations 4.57 11.96 (1.52) 2.22 6.32
- ------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net realized gains (3.62) (1.18) (4.51) (2.17) (1.39)
Return of capital -- -- (0.12) -- --
-------- -------- -------- -------- --------
Total Distributions Declared
to Shareholders (3.62) (1.18) (4.63) (2.17) (1.39)
- ------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 43.12 $ 42.17 $ 31.39 $ 37.54 $ 37.49
Total return (b) 10.99% 38.58%(c) (2.16)%(c) 6.43% 19.86%
- ------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Operating expenses (d) 1.32% 1.42% 1.54% 1.57% 1.58%
Interest expense -- -- --%(e) -- --
Net investment income (loss) (d) 0.28% 0.22% 0.07% (0.55)% (0.18)%
Waiver/reimbursement -- 0.01% 0.12% -- --
Portfolio turnover rate 31% 46% 118% 77% 29%
Net assets, end of period (000's) $396,568 $292,365 $181,377 $142,551 $137,042
- ------------------------------------------------------------------------------------------------------------------
(a)Per share data was calculated using average shares outstanding during the
period.
(b)Total return at net asset value assuming all distributions reinvested and no
initial sales charge or contingent deferred sales charge.
(c)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(d)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e)Rounds to less than 0.01%.
26
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended June 30,
-------------------------------------------------------------------
Class B Shares 2005 2004 2003 2002 2001
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 37.60 $ 28.18 $ 34.50 $ 34.88 $ 30.64
- -------------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment loss (a) (0.18) (0.18) (0.19) (0.44) (0.31)
Net realized and unrealized gain (loss) on
investments and foreign currency 3.96 10.64 (1.50) 2.23 5.94
-------- -------- -------- -------- --------
Total from Investment Operations 3.78 10.46 (1.69) 1.79 5.63
- -------------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net realized gains (3.38) (1.04) (4.51) (2.17) (1.39)
Return of capital -- -- (0.12) -- --
-------- -------- -------- -------- --------
Total Distributions Declared
to Shareholders (3.38) (1.04) (4.63) (2.17) (1.39)
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 38.00 $ 37.60 $ 28.18 $ 34.50 $ 34.88
Total return (b) 10.18% 37.58%(c) (2.93)%(c) 5.65% 18.83%
- -------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Operating expenses (d) 2.07% 2.17% 2.30% 2.32% 2.33%
Interest expense -- -- --%(e) -- --
Net investment loss (d) (0.47)% (0.53)% (0.71)% (1.30)% (0.93)%
Waiver/reimbursement -- 0.01% 0.09% -- --
Portfolio turnover rate 31% 46% 118% 77% 29%
Net assets, end of period (000's) $182,648 $213,159 $188,270 $231,602 $240,252
- -------------------------------------------------------------------------------------------------------------------
(a)Per share data was calculated using average shares outstanding during the
period.
(b)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(c)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(d)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e)Rounds to less than 0.01%.
27
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended June 30,
--------------------------------------------------------------
Class C Shares 2005 2004 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 39.05 $ 29.24 $ 35.59 $ 35.91 $ 31.50
- --------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment loss (a) (0.18) (0.19) (0.19) (0.45) (0.31)
Net realized and unrealized gain (loss) on
investments and foreign currency 4.11 11.04 (1.53) 2.30 6.11
------- ------- ------- ------- -------
Total from Investment Operations 3.93 10.85 (1.72) 1.85 5.80
- --------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net realized gains (3.38) (1.04) (4.51) (2.17) (1.39)
Return of capital -- -- (0.12) -- --
------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders (3.38) (1.04) (4.63) (2.17) (1.39)
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 39.60 $ 39.05 $ 29.24 $ 35.59 $ 35.91
Total return (b) 10.19% 37.56%(c) (2.92)%(c) 5.66% 18.85%
- --------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Operating expenses (d) 2.07% 2.17% 2.30% 2.32% 2.33%
Interest expense -- -- --%(e) -- --
Net investment loss (d) (0.47)% (0.53)% (0.71)% (1.30)% (0.93)%
Waiver/reimbursement -- 0.01% 0.10% -- --
Portfolio turnover rate 31% 46% 118% 77% 29%
Net assets, end of period (000's) $57,471 $38,798 $25,186 $26,726 $27,886
- --------------------------------------------------------------------------------------------------------------
(a)Per share data was calculated using average shares outstanding during the
period.
(b)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(c)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(d)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e)Rounds to less than 0.01%.
28
- --------------------------------------------------------------------------------
Columbia Small Cap Value Fund
Selected data for a share outstanding throughout each period is as follows:
Year Ended June 30,
------------------------------------------------------------
Class Z Shares 2005 2004 2003 2002 2001
- ------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 43.41 $ 32.24 $ 38.28 $ 38.09 $ 33.01
- ------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (loss) (a) 0.23 0.21 0.24 (0.12) 0.02
Net realized and unrealized gain (loss) on
investments and foreign currency 4.62 12.19 (1.65) 2.48 6.45
------- ------- ------- ------- -------
Total from Investment Operations 4.85 12.40 (1.41) 2.36 6.47
- ------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net realized gains (3.72) (1.23) (4.51) (2.17) (1.39)
Return of capital -- -- (0.12) -- --
------- ------- ------- ------- -------
Total Distributions Declared
to Shareholders (3.72) (1.23) (4.63) (2.17) (1.39)
- ------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 44.54 $ 43.41 $ 32.24 $ 38.28 $ 38.09
Total return (b) 11.34% 38.94%(c) (1.79)%(c) 6.71% 20.05%
- ------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Operating expenses (d) 1.07% 1.17% 1.25% 1.32% 1.33%
Interest expense -- -- --%(e) -- --
Net investment income (loss) (d) 0.53% 0.52% 0.82% (0.30)% 0.07%
Waiver/reimbursement -- 0.01% 0.38 % -- --
Portfolio turnover rate 31% 46% 118% 77% 29%
Net assets, end of period (000's) $83,508 $65,526 $12,558 $ 278 $ 21
- ------------------------------------------------------------------------------------------------------------
(a)Per share data was calculated using average shares outstanding during the
period.
(b)Total return at net asset value assuming all distributions reinvested.
(c)Had the Investment Advisor not waived or reimbursed a portion of expenses,
total return would have been reduced.
(d)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(e)Rounds to less than 0.01%.
29
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
-----------------------------
Columbia Small Cap Value Fund
To the Trustees of Columbia Funds Trust VI and the Shareholders of Columbia
Small Cap Value Fund
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Columbia Small Cap Value Fund (the
"Fund") (a series of Columbia Funds Trust VI) at June 30, 2005, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended and the financial highlights for each
of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at June 30, 2005 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 25, 2005
30
UNAUDITED INFORMATION
-----------------------------
Columbia Small Cap Value Fund
Federal Income Tax Information
For the fiscal year ended June 30, 2005, the Fund designates long-term capital
gains of $17,185,303.
25.95% of the ordinary income distributed by the Fund, for the year ended June
30, 2005, qualifies for the corporate dividends received deduction.
For non-corporate shareholders 25.90%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period July 1, 2004 to June 30, 2005 may represent qualified
dividend income. Final information will be provided in your 2005 1099-Div Form.
31
TRUSTEES
-----------------------
Columbia Small Cap
Value Fund
The Trustrees/Directors serve terms of indefinite duration. The names,
addresses and ages of the Trustees/Directors and officers of the Funds in the
Columbia Funds Complex, the year each was first elected or appointed to office,
their principal business occupations during at least the last five years, the
number of portfolios overseen by each Trustee/Director and other directorships
they hold are shown below. Each officer listed below serves as an officer of
each Fund in the Columbia Funds Complex.
Name, address and age, Position with funds, Principal occupation(s) during past five years, Number of
Year first elected or appointed to office/1/ portfolios in Columbia Funds Complex overseen by
trustee/director, Other directorships held
Disinterested Trustees
DOUGLAS A. HACKER (Age 49) Executive Vice President-Strategy of United Airlines
P.O. Box 66100 (airline) since December, 2002 (formerly President of UAL
Chicago, IL 60666 Loyalty Services (airline) from September, 2001 to
Trustee (since 1996) December, 2002; Executive Vice President and Chief
Financial Officer of United Airlines from July, 1999 to
September, 2001; Senior Vice President-Finance from March,
1993 to July, 1999). Oversees 104, Nash Finch Company (food
distributor)
------------------------------------------------------------
JANET LANGFORD KELLY (Age 47) Partner, Zelle, Hofmann, Voelbel, Mason & Gette LLP (law
9534 W. Gull Lake Drive firm); Adjunct Professor of Law, Northwestern University,
Richland, MI 49083-8530 since September, 2004 (formerly Chief Administrative
Trustee (since 1996) Officer and Senior Vice President, Kmart Holding
Corporation (consumer goods), from September, 2003 to
March, 2004; Executive Vice President-Corporate Development
and Administration, General Counsel and Secretary, Kellogg
Company (food manufacturer), from September, 1999 to
August, 2003; Senior Vice President, Secretary and General
Counsel, Sara Lee Corporation (branded, packaged,
consumer-products manufacturer) from January, 1995 to
September, 1999). Oversees 104, None
------------------------------------------------------------
RICHARD W. LOWRY (Age 69) Private Investor since August, 1987 (formerly Chairman and
10701 Charleston Drive Chief Executive Officer, U.S. Plywood Corporation (building
Vero Beach, FL 32963 products manufacturer)). Oversees 106(3), None
Trustee (since 1995)
------------------------------------------------------------
CHARLES R. NELSON (Age 62) Professor of Economics, University of Washington, since
Department of Economics January, 1976; Ford and Louisa Van Voorhis Professor of
University of Washington Political Economy, University of Washington, since
Seattle, WA 98195 September, 1993 (formerly Director, Institute for Economic
Trustee (since 1981) Research, University of Washington from September, 2001 to
June, 2003) Adjunct Professor of Statistics, University of
Washington, since September, 1980; Associate Editor,
Journal of Money Credit and Banking, since September, 1993;
consultant on econometric and statistical matters. Oversees
104, None
------------------------------------------------------------
JOHN J. NEUHAUSER (Age 62) Academic Vice President and Dean of Faculties since August,
84 College Road 1999, Boston College (formerly Dean, Boston College School
Chestnut Hill, MA 02467-3838 of Management from September, 1977 to August, 1999).
Trustee (since 1985) Oversees 1063, Saucony, Inc. (athletic footwear)
------------------------------------------------------------
/1/In December 2000, the boards of each of the
former Liberty Funds and former Stein Roe
Funds were combined into one board of
trustees responsible for the oversight of
both fund groups (collectively, the "Liberty
Board"). In October 2003, the trustees on
the Liberty Board were elected to the boards
of the Columbia Funds (the "Columbia Board")
and of the CMG Fund Trust (the "CMG Funds
Board"); simultaneous with that election,
Patrick J. Simpson and Richard L. Woolworth,
who had been directors on the Columbia Board
and trustees on the CMG Funds Board, were
appointed to serve as trustees of the
Liberty Board. The date shown is the
earliest date on which a trustee/director
was elected or appointed to the board of a
Fund in the Columbia Funds Complex.
32
- --------------------------------------------------------------------------------
Columbia Small Cap
Value Fund
Name, address and age, Position with funds, Principal occupation(s) during past five years, Number of
Year first elected or appointed to office/1/ portfolios in Columbia Funds Complex overseen by
trustee/director, Other directorships held
Disinterested Trustees
PATRICK J. SIMPSON (Age 61) Partner, Perkins Coie L.L.P. (law firm). Oversees 104, None
1120 N.W. Couch Street
Tenth Floor
Portland, OR 97209-4128
Trustee (since 2000)
------------------------------------------------------------
THOMAS E. STITZEL (Age 69) Business Consultant since 1999 (formerly Professor of
2208 Tawny Woods Place Finance from 1975 to 1999, College of Business, Boise State
Boise, ID 83706 University); Chartered Financial Analyst. Oversees 104, None
Trustee (since 1998)
------------------------------------------------------------
THOMAS C. THEOBALD (Age 68) Partner and Senior Advisor, Chicago Growth Partners
8 Sound Shore Drive, (private equity investing) since September, 2004 (formerly
Suite 285 Managing Director, William Blair Capital Partners (private
Greenwich, CT 06830 equity investing) from September, 1994 to September, 2004).
Trustee and Chairman of the Board/4/ Oversees 104, Anixter International (network support
(since 1996) equipment distributor); Ventas, Inc. (real estate
investment trust); Jones Lang LaSalle (real estate
management services) and Ambac Financial Group (financial
guaranty insurance)
------------------------------------------------------------
ANNE-LEE VERVILLE (Age 59) Retired since 1997 (formerly General Manager, Global
359 Stickney Hill Road Education Industry, IBM Corporation (computer and
Hopkinton, NH 03229 technology) from 1994 to 1997). Oversees 104, Chairman of
Trustee (since 1998) the Board of Directors, Enesco Group, Inc. (designer,
importer and distributor of giftware and collectibles)
------------------------------------------------------------
RICHARD L. WOOLWORTH (Age 64) Retired since December 2003 (formerly Chairman and Chief
100 S.W. Market Street Executive Officer, The Regence Group (regional health
#1500 insurer); Chairman and Chief Executive Officer, BlueCross
Portland, OR 97207 BlueShield of Oregon; Certified Public Accountant, Arthur
Trustee (since 1991) Young & Company). Oversees 104, Northwest Natural Gas Co.
(natural gas service provider)
------------------------------------------------------------
Interested Trustee
WILLIAM E. MAYER/2/ (Age 65) Partner, Park Avenue Equity Partners (private equity) since
399 Park Avenue February, 1999 (formerly Partner, Development Capital LLC
Suite 3204 from November 1996 to February, 1999). Oversees 106/3/, Lee
New York, NY 10022 Enterprises (print media), WR Hambrecht + Co. (financial
Trustee (since 1994) service provider); Reader's Digest (publishing); OPENFIELD
Solutions (retail industry technology provider)
------------------------------------------------------------
/2/Mr. Mayer is an "interested person" (as
defined in the Investment Company Act of
1940 (1940 Act)) by reason of his
affiliation with WR Hambrecht + Co.
/3/Messrs. Lowry, Neuhauser and Mayer also
serve as directors/trustees of the Liberty
All-Star Funds, currently consisting of 2
funds, which are advised by an affiliate of
the Advisor.
/4/Mr. Theobald was appointed as Chairman of
the Board effective December 10, 2003.
The Statement of Additional Information
Includes additional information about the
Trustees of the Funds and is available,
without charge, upon request by calling
800-426-3750.
33
OFFICERS
-----------------------
Columbia Small Cap
Value Fund
Name, address and age, Position with Columbia
Funds, Year first elected or appointed to office Principal occupation(s) during past five years
CHRISTOPHER L. WILSON (Age 47) Head of Mutual Funds since August, 2004 and Senior Vice
One Financial Center President of the Advisor since January, 2005; President of
Boston, MA 02111 the Columbia Funds, Liberty Funds and Stein Roe Funds since
President (since 2004) October, 2004; President and Chief Executive Officer of the
Nations Funds since January, 2005; President of the Galaxy
Funds since April 2005; Director of Bank of America Global
Liquidity Funds, plc since May 2005; Director of Banc of
America Capital Management (Ireland), Limited since May
2005; Senior Vice President of BACAP Distributors LLC since
January, 2005; Director of FIM Funding, Inc. since January,
2005; Senior Vice President of Columbia Funds Distributor,
Inc. since January, 2005; Director of Columbia Funds
Services, Inc. since January, 2005 (formerly President and
Chief Executive Officer, CDC IXIS Asset Management
Services, Inc. from September, 1998 to August, 2004).
------------------------------------------------------------
J. KEVIN CONNAUGHTON (Age 40) Treasurer of the Columbia Funds since October, 2003 and of
One Financial Center the Liberty Funds, Stein Roe Funds and All-Star Funds since
Boston, MA 02111 December, 2000; Vice President of the Advisor since April,
Treasurer (since 2000) 2003 (formerly President of the Columbia Funds, Liberty
Funds and Stein Roe Funds from February, 2004 to October,
2004; Chief Accounting Officer and Controller of the
Liberty Funds and All-Star Funds from February, 1998 to
October, 2000); Treasurer of the Galaxy Funds since
September, 2002 (formerly Treasurer from December, 2002 to
December, 2004 and President from February, 2004 to
December, 2004 of the Columbia Management Multi-Strategy
Hedge Fund, LLC; Vice President of Colonial Management
Associates, Inc. from February, 1998 to October, 2000).
------------------------------------------------------------
MARY JOAN HOENE (Age 54) Senior Vice President and Chief Compliance Officer of the
40 West 57th Street Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star
New York, NY 10005 Funds since August, 2004 (formerly Partner, Carter, Ledyard
Senior Vice President and & Milburn LLP from January, 2001 to August, 2004; Counsel,
Chief Compliance Officer (since 2004) Carter, Ledyard & Milburn LLP from November, 1999 to
December, 2000; Vice President and Counsel, Equitable Life
Assurance Society of the United States from April, 1998 to
November, 1999).
------------------------------------------------------------
MICHAEL G. CLARKE (Age 35) Chief Accounting Officer of the Columbia Funds, Liberty
One Financial Center Funds, Stein Roe Funds and All-Star Funds since October,
Boston, MA 02111 2004 (formerly Controller of the Columbia Funds, Liberty
Chief Accounting Officer (since 2004) Funds, Stein Roe Funds and All-Star Funds from May, 2004 to
October, 2004; Assistant Treasurer from June, 2002 to May,
2004; Vice President, Product Strategy & Development of the
Liberty Funds and Stein Roe Funds from February, 2001 to
June, 2002; Assistant Treasurer of the Liberty Funds, Stein
Roe Funds and the All-Star Funds from August, 1999 to
February, 2001; Audit Manager, Deloitte & Touche LLP from
May, 1997 to August, 1999).
------------------------------------------------------------
JEFFREY R. COLEMAN (Age 35) Controller of the Columbia Funds, Liberty Funds, Stein Roe
One Financial Center Funds and All-Star Funds since October, 2004 (formerly Vice
Boston, MA 02111 President of CDC IXIS Asset Management Services, Inc. and
Controller (since 2004) Deputy Treasurer of the CDC Nvest Funds and Loomis Sayles
Funds from February, 2003 to September, 2004; Assistant
Vice President of CDC IXIS Asset Management Services, Inc.
and Assistant Treasurer of the CDC Nvest Funds from August,
2000 to February, 2003; Tax Manager of PFPC, Inc. from
November, 1996 to August, 2000).
------------------------------------------------------------
R. SCOTT HENDERSON (Age 45) Secretary of the Columbia Funds, Liberty Funds and Stein
One Financial Center Roe Funds since December, 2004 (formerly Of Counsel,
Boston, MA 02111 Bingham McCutchen from April, 2001 to September, 2004;
Secretary (since 2004) Executive Director and General Counsel, Massachusetts
Pension Reserves Investment Management Board from
September, 1997 to March, 2001).
------------------------------------------------------------
34
COLUMBIA FUNDS
-----------------------------
Columbia Small Cap Value Fund
- ------------------------ ---------------------------------------------------------------------------
Large Growth Columbia Growth Stock
Columbia Large Cap Growth
Columbia Tax-Managed Growth
Columbia Tax-Managed Growth II*
Columbia Young Investor
---------------------------------------------------------------------------
Large Value Columbia Disciplined Value
Columbia Growth & Income*
Columbia Large Cap Core
Columbia Tax-Managed Value*
---------------------------------------------------------------------------
Midcap Growth Columbia Acorn Select
Columbia Mid Cap Growth
---------------------------------------------------------------------------
Midcap Value Columbia Dividend Income
Columbia Mid Cap Value*
Columbia Strategic Investor
---------------------------------------------------------------------------
Small Growth Columbia Acorn
Columbia Acorn USA
Columbia Small Company Equity
---------------------------------------------------------------------------
Small Value Columbia Small Cap Value
---------------------------------------------------------------------------
Balanced Columbia Asset Allocation
Columbia Balanced
Columbia Liberty Fund
Columbia Thermostat
---------------------------------------------------------------------------
Specialty Columbia Real Estate Equity
Columbia Technology
Columbia Utilities
---------------------------------------------------------------------------
Taxable Fixed-Income Columbia Federal Securities
Columbia Fixed Income Securities*
Columbia High Yield
Columbia High Yield Opportunity
Columbia Income*
Columbia Intermediate Bond
Columbia Intermediate Government Income*
Columbia Quality Plus Bond
Columbia Short Term Bond*
Columbia Strategic Income
---------------------------------------------------------------------------
Tax Exempt Columbia High Yield Municipal
Columbia Intermediate Tax-Exempt Bond
Columbia Managed Municipals*
Columbia Tax-Exempt
Columbia Tax-Exempt Insured
---------------------------------------------------------------------------
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*
35
-----------------------------
Columbia Small Cap Value Fund
- --------------------- ---------------------------------------------------------------------------
International/Global Columbia Acorn International
Columbia Acorn International Select
Columbia Global Equity
Columbia International Stock
Columbia Newport Greater China
Columbia Newport Tiger*
---------------------------------------------------------------------------
Index Columbia Large Company Index*
Columbia Small Company Index*
Columbia U.S. Treasury Index
*The fund's trustees have approved the merger
of this fund, which is scheduled to occur
before the end of 2005.
PLEASE CONSIDER THE INVESTMENT OBJECTIVES,
RISKS, CHARGES AND EXPENSES OF A MUTUAL FUND
CAREFULLY BEFORE INVESTING. CONTACT US AT
800-345-6611 FOR A PROSPECTUS WHICH CONTAINS
THIS AND OTHER IMPORTANT INFORMATION ABOUT
THE FUND. READ IT CAREFULLY BEFORE YOU
INVEST.
For complete product information on any
Columbia fund, visit our website at
www.columbiafunds.com.
Columbia Management is the primary
investment management division of Bank of
America Corporation. Columbia Management
entities furnish investment management
services and advise institutional and mutual
fund portfolios. Columbia Management
Advisors, Inc. will combine with Banc of
America Capital Management, LLC on or about
September 30, 2005. At that time, the newly
combined advisor will undergo a name change
to Columbia Management Advisors, LLC and
will continue to operate as a SEC-registered
investment advisor, wholly owned subsidiary
of Bank of America, N.A. and part of
Columbia Management.
36
IMPORTANT INFORMATION ABOUT THIS REPORT
-----------------------------
Columbia Small Cap Value Fund
Transfer Agent
Columbia Management Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800-345-6611
Distributor
Columbia Management Distributors, Inc.
One Financial Center
Boston MA 02111
Investment Advisor
Columbia Management Advisors, Inc.
100 Federal Street
Boston MA 02110
The fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Small Cap Value
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 and a copy of the fund's voting record are available (i) at
www.columbiamanagement.com; (ii) on the Securities and Exchange Commission's
website at www.sec.gov, and (iii) without charge, upon request, by calling
800-368-0346. Information regarding how the fund voted proxies relating to
portfolio securities during the 12-month period ended June 30, 2005 is
available from the SEC's website. Information regarding how the fund voted
proxies relating to portfolio securities is also available from the fund's
website.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q
is available on the SEC's website at www.sec.gov and may be reviewed and copied
at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
Columbia Management is the primary investment management division of Bank of
America Corporation. Columbia Management entities furnish investment management
services and advise institutional and mutual fund portfolios. Columbia
Management Advisors, Inc. will combine with Banc of America Capital Management,
LLC on or about September 30, 2005. At that time, the newly combined advisor
will undergo a name change to Columbia Management Advisors, LLC and will
continue to operate as a SEC-registered investment advisor, wholly owned
subsidiary of Bank of America, N.A. and part of Columbia Management.
37
[GRAPHIC APPEARS HERE] 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 Small Cap Value Fund Annual Report, June 30, 2005
Columbia Management(R)
Item 2. Code of Ethics.
(a) The registrant has, as of the end of the period covered by this
report, adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party.
(b) During the period covered by this report, there were not any
amendments to a provision of the code of ethics adopted in 2(a)
above.
(c) During the period covered by this report, there were not any
waivers or implicit waivers to a provision of the code of ethics
adopted in 2(a) above.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Trustees has determined that Douglas A. Hacker, Thomas
E. Stitzel, Anne-Lee Verville and Richard L. Woolworth, each of whom are members
of the registrant's Board of Trustees and Audit Committee, each qualify as an
audit committee financial expert. Mr. Hacker, Mr. Stitzel, Ms. Verville and Mr.
Woolworth are each independent trustees, as defined in paragraph (a)(2) of this
item's instructions and collectively constitute the entire Audit Committee.
Item 4. Principal Accountant Fees and Services.
Fee information below is disclosed for the series of the registrant whose report
to stockholders is included in this annual filing.
(a) Aggregate Audit Fees billed by the principal accountant for professional
services rendered during the fiscal years ended June 30, 2005 and June 30, 2004
are approximately as follows:
2005 2004
$ 25,000 $ 22,800
Audit Fees include amounts related to the audit of the registrant's annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Aggregate Audit-Related Fees billed by the principal accountant for
professional services rendered during the fiscal years ended June 30, 2005 and
June 30, 2004 are approximately as follows:
2005 2004
$ 3,700 $ 4,000
Audit-Related Fees include amounts for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported in Audit Fees
above. In both fiscal years 2005 and 2004, Audit-Related Fees include certain
agreed-upon procedures performed for semi-annual shareholder reports.
(c) Aggregate Tax Fees billed by the principal accountant for professional
services rendered during the fiscal years ended June 30, 2005 and June 30, 2004
are approximately as follows:
2005 2004
$ 4,200 $ 4,900
Tax Fees in both fiscal years 2005 and 2004 consist primarily of the review of
annual tax returns and include amounts for professional services by the
principal accountant for tax compliance, tax advice and tax planning.
(d) Aggregate All Other Fees billed by the principal accountant for professional
services rendered during the fiscal years ended June 30, 2005 and June 30, 2004
are approximately as follows:
2005 2004
$ 0 $ 0
All Other Fees include amounts for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) above.
None of the amounts described in paragraphs (a) through (d) above were approved
pursuant to the "de minimus" exception under paragraph (c)(7)(i)(C) of Rule 2-01
of Regulation S-X.
(e)(1) Audit Committee Pre-Approval Policies and Procedures
I. General Overview
The Audit Committee of the registrant has adopted a formal policy (the "Policy")
which sets forth the procedures and the conditions pursuant to which the Audit
Committee will pre-approve (i) all audit and non-audit (including audit related,
tax and all other) services provided by the registrant's independent auditor to
the registrant and individual funds (collectively "Fund Services"), and (ii) all
non-audit services provided by the registrant's independent auditor to the
funds' adviser or a control affiliate of the adviser, that relate directly to
the funds' operations and financial reporting (collectively "Fund-related
Adviser Services"). A "control affiliate" is an entity controlling, controlled
by, or under common control with the adviser that provides ongoing services to
the funds, and the
term "adviser" is deemed to exclude any unaffiliated sub-adviser whose role is
primarily portfolio management and is sub-contracted or overseen by another
investment adviser. The adviser and control affiliates are collectively referred
to as "Adviser Entities."
The Audit Committee uses a combination of specific (on a case-by-case basis as
potential services are contemplated) and general (pre-determined list of
permitted services) pre-approvals. Unless a type of service has received general
pre-approval, it will require specific pre-approval by the Audit Committee if it
is to be provided by the independent auditor.
The Policy does not delegate the Audit Committee's responsibilities to
pre-approve services performed by the independent auditor to management.
II. General Procedures
On an annual basis, the Fund Treasurer and/or Director of Trustee Administration
shall submit to the Audit Committee a schedule of the types of Fund Services and
Fund-related Adviser Services that are subject to general pre-approval.
These schedules will provide a description of each type of service that is
subject to general pre-approval and, where possible, will provide estimated fees
for each instance of providing each service. This general pre-approval and
related fees (where provided) will generally cover a one-year period (for
example, from June 1 through May 31 of the following year). The Audit Committee
will review and approve the types of services and review the projected fees for
the next one-year period and may add to, or subtract from, the list of general
pre-approved services from time to time, based on subsequent determinations.
This approval acknowledges that the Audit Committee is in agreement with the
specific types of services that the independent auditor will be permitted to
perform. The fee amounts will be updated to the extent necessary at other
regularly scheduled meetings of the Audit Committee.
In addition to the fees for each individual service, the Audit Committee has the
authority to implement a fee cap on the aggregate amount of non-audit services
provided to an individual fund.
If, subsequent to general pre-approval, a fund, its investment adviser or a
control affiliate determines that it would like to engage the independent
auditor to perform a service that requires pre-approval and that is not included
in the general pre-approval list, the specific pre-approval procedure shall be
as follows:
. A brief written request shall be prepared by management
detailing the proposed engagement with explanation as to why the
work is proposed to be performed by the independent auditor;
. The request should be addressed to the Audit Committee with
copies to the Fund Treasurer and/or Director of Trustee
Administration;
. The Fund Treasurer and/or Director of Trustee Administration
will arrange for a discussion of the service to be included on
the agenda for the next regularly scheduled Audit Committee
meeting, when the Committee will discuss the proposed engagement
and approve or deny the request.
. If the timing of the project is critical and the project needs
to commence before the next regularly scheduled meeting, the
Chairperson of the Audit Committee may approve or deny the
request on behalf of the Audit Committee, or, in the
Chairperson's discretion, determine to call a special meeting of
the Audit Committee for the purpose of considering the proposal.
Should the Chairperson of the Audit Committee be unavailable,
any other member of the Audit Committee may serve as an
alternate for the purpose of approving or denying the request.
Discussion with the Chairperson (or alternate, if necessary)
will be arranged by the Fund Treasurer and/or Director of
Trustee Administration. The independent auditor will not
commence any such project unless and until specific approval has
been given.
III. Certain Other Services Provided to Adviser Entities
The Audit Committee recognizes that there are cases where services proposed to
be provided by the independent auditor to the adviser or control affiliates are
not Fund-related Adviser Services within the meaning of the Policy, but
nonetheless may be relevant to the Audit Committee's ongoing evaluation of the
auditor's independence and objectivity with respect to its audit services to the
funds. As a result, in all cases where an Adviser Entity engages the independent
auditor to provide audit or non-audit services that are not Fund Services or
Fund-related Adviser Services, were not subject to pre-approval by the Audit
Committee, and the projected fees for any such engagement (or the aggregate of
all such engagements during the period covered by the Policy) exceeds a
pre-determined threshold established by the Audit Committee; the independent
auditor, Fund Treasurer and/or Director of Trustee Administration will notify
the Audit Committee not later than its next meeting. Such notification shall
include a general description of the services provided, the entity that is to be
the recipient of such services, the timing of the engagement, the entity's
reasons for selecting the independent auditor, and the projected fees. Such
information will allow the Audit Committee to consider whether non-audit
services provided to the adviser and Adviser Entities, which were not subject to
Audit Committee pre-approval, are compatible with maintaining the auditor's
independence with respect to the Funds.
IV. Reporting to the Audit Committee
The Fund Treasurer or Director of Trustee Administration shall report to the
Audit Committee at each of its regular meetings regarding all Fund Services or
Fund-related Adviser Services initiated since the last such report was rendered,
including:
. A general description of the services, and
. Actual billed and projected fees, and
. The means by which such Fund Services or Fund-related Adviser
Services were pre-approved by the Audit Committee.
In addition, the independent auditor shall report to the Audit Committee
annually, and no more than 90 days prior to the filing of audit reports with the
SEC, all non-audit services provided to entities in the funds' "investment
company complex," as defined by SEC rules, that did not require pre-approval
under the Policy.
V. Amendments; Annual Approval by Audit Committee
The Policy may be amended from time to time by the Audit Committee. Prompt
notice of any amendments will be provided to the independent auditor, Fund
Treasurer and Director of Trustee Administration. The Policy shall be reviewed
and approved at least annually by the Audit Committee.
*****
(e)(2) The percentage of services described in paragraphs (b) through (d) of
this Item approved pursuant to the "de minimis" exception under paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X during both fiscal years ended June
30, 2005 and June 30, 2004 was zero.
(f) Not applicable.
(g) All non-audit fees billed by the registrant's accountant for services
rendered to the registrant for the fiscal years ended June 30, 2005 and June 30,
2004 are disclosed in (b) through (d) of this Item.
During the fiscal years ended June 30, 2005 and June 30, 2004, there were no
Audit-Related Fees or Tax Fees that were approved for services to the investment
adviser (not including any sub-adviser whose role is primarily portfolio
management and is subcontracted with or overseen by another investment adviser)
and any entity controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant under paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X. During the fiscal years ended June
30, 2005 and June 30, 2004, All Other Fees that were approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X were approximately $95,500
and $95,000, respectively. For both fiscal years, All Other Fees consist
primarily of internal controls reviews of the registrant's transfer agent.
The percentage of Audit-Related Fees, Tax Fees and All Other Fees required to be
approved under paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X that were
approved under the "de minimis" exception during both fiscal years ended June
30, 2005 and June 30, 2004 was zero.
(h) The registrant's Audit Committee of the Board of Directors has considered
whether the provision of non-audit services that were rendered to the
registrant's adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible
with maintaining the principal accountant's independence. The Audit Committee
determined that the provision of such services is compatible with maintaining
the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have not been any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, since those
procedures were last disclosed in response to requirements of Item
7(d)(2)(ii)(G) of Schedule 14A or this Item.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal
financial officers, based on their evaluation of the
registrant's disclosure controls and procedures as of a date
within 90 days of the filing of this report, has concluded that
such controls and procedures are adequately designed to ensure
that information required to be disclosed by the registrant in
Form N-CSR is accumulated and communicated to
the registrant's management, including the principal executive
officer and principal financial officer, or persons performing
similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR
attached hereto as Exhibit 99.CODE ETH.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust VI
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By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date August 29, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /S/ Christopher L. Wilson
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Christopher L. Wilson, President
Date August 29, 2005
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By (Signature and Title) /S/ J. Kevin Connaughton
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J. Kevin Connaughton, Treasurer
Date August 29, 2005
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