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 811-3009
Columbia Funds Trust II
---------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
---------------------------------------------------
(Address of principal executive offices) (Zip code)
Vincent Pietropaolo, Esq.
Columbia Management Group, Inc.
One Financial Center
Boston, MA 02111
---------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-772-3698
Date of fiscal year end: March 31, 2006
Date of reporting period: September 30, 2005
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
Item 1. Reports to Stockholders.
[GRAPHIC]
COLUMBIA
MONEY MARKET FUND
Semiannual Report
September 30, 2005
PRESIDENT'S MESSAGE
-----------------------------
Columbia Money Market Fund
[PHOTO] Christopher Wilson
Dear Shareholder:
Columbia Management, the asset management division of Bank of America, is in
the final stages of a significant business integration effort. Over the last
year, we have integrated various components of Nations Funds, Galaxy Funds and
Columbia Funds, resulting in a single fund family under the Columbia name that
covers a wide range of markets, sectors and asset classes. Our team of
talented, seasoned investment professionals will continue to strive to achieve
strong results within their investment categories. Our objective is not only to
provide our shareholders with the best
products, but also to enhance the breadth and availability of our services. In
addition to expanding the level of services available to the funds, portfolio
managers and shareholders, we have been able to achieve significant cost
savings for the funds by aggregating our business.
In September, we made major inroads in the initiative to streamline our product
offerings. This included merging several funds and renaming Nations Funds as
Columbia Funds, as well as consolidating the Nations and Columbia web sites.
Over the summer, we completed the service provider consolidation for
shareholder servicing. As we work to complete the remaining product and service
provider consolidations by the end of 2005, we remain committed to building a
mutual fund business that helps you meet, and hopefully exceed, your personal
financial goals. We value the confidence you have placed in us to assist you in
managing your funds during these changing times. As with all businesses within
Bank of America, we understand that your trust must be continually earned and
will remain focused on producing results for you. We will continue to strive
for the highest standards of performance and service excellence.
All of these efforts have been undertaken to enable you, as a shareholder, to
benefit from the execution of a consolidated business plan. We believe a more
streamlined fund family with consistent performance and lower fees will provide
the best opportunity for investment growth. We also believe that providing more
robust services to you through multiple channels (Web, phones, voice response)
will be beneficial to you.
In the pages that follow, you'll find a discussion of the economic environment
during the period followed by a detailed report from the fund managers on key
factors that influenced performance. We encourage you to read the manager
reports carefully and discuss any questions you have with your financial
advisor. As always, we thank you for choosing Columbia Management. We look
forward to helping you keep your financial goals on target in the years to come.
Sincerely,
/s/
Christopher L. Wilson
President, Columbia Funds
Head of Mutual Funds, Columbia Management
Christopher L. Wilson is Head of Mutual Funds for Columbia Management and
responsible for the day-to-day delivery of mutual fund services to the firm's
investors. Working closely with the Legal and Compliance teams, Chris oversees
all aspects of the mutual fund services operation, including treasury,
investment accounting and shareholder and broker services. As President and CEO
of Columbia Funds (formerly Nations, Galaxy and Columbia Funds), Chris serves
as the primary interface to the Fund Boards. Chris joined Bank of America in
2004.
Table of Contents
Fund Profile............... 1
Understanding Your Expenses 2
Economic Update............ 3
Portfolio Manager's Report. 4
Investment Portfolio....... 6
Statement of Assets and Liabilities 12
Statement of Operations............ 13
Statement of Changes in Net Assets. 14
Notes to Financial Statements...... 16
Financial Highlights............... 21
Important Information
About This Report.................. 25
The views expressed in the President's Message and Portfolio Managers' Report
reflect the current views of the respective parties. These views are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict so actual outcomes and results may
differ significantly from the views expressed. These views are subject to
change at any time based upon economic, market or other conditions and the
respective parties disclaim any responsibility to update such views. These
views may not be relied on as investment advice and, because investment
decisions for a Columbia Fund are based on numerous factors, may not be relied
on as an indication of trading intent on behalf of any particular Columbia
Fund. References to specific company securities should not be construed as a
recommendation or investment advice.
--------------------------
Not FDIC May Lose Value
Insured -----------------
No Bank Guarantee
- -----------------
FUND PROFILE
--------------------------
Columbia Money Market 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.
Portfolio breakdown as of 09/30/05 (%)
Corporate fixed-income
bonds & notes 52.5
----------------------------
Commercial paper 30.7
----------------------------
Municipal bonds 9.4
----------------------------
Certificates of deposit 7.0
----------------------------
Short-term obligations 0.4
----------------------------
Portfolio maturity as of 09/30/05 (%)
1-4 days 3.1
----------------------
5-14 days 39.4
----------------------
15-29 days 25.0
----------------------
30-59 days 12.1
----------------------
More than 59 days 20.4
----------------------
Portfolio breakdown is calculated as a percentage of net assets. Portfolio
maturity is calculated as a percentage of total investments.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY
BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT
WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES.
Summary
.. For the six-month period ended September 30, 2005, the fund's class A shares
returned 1.26%.
.. Four additional short-term interest rate hikes raised yields on money market
instruments.
.. We believe that the fund's emphasis on floating-rate notes helped the fund
outperform the average return of its peer group, the Lipper Money Market
Funds Category.
[FLOW CHART]
Lipper Money
Class A Market Funds
shares Category
1.26% 1.18%
Objective
Seeks maximum current income consistent with capital preservation and the
maintenance of liquidity.
Total Net Assets
$443.5 million
1
UNDERSTANDING YOUR EXPENSES
--------------------------
Columbia Money Market Fund
Estimating your actual expenses
To estimate the expenses that you paid over the period, first you will need
your account balance at the end of the period:
.. For shareholders who receive their account statements from Columbia
Management Services, Inc., your account balance is available online at
www.columbiafunds.com or by calling Shareholder Services at 800.345.6611.
.. For shareholders who receive their account statements from their brokerage
firm, contact your brokerage firm to obtain your account balance.
1.Divide your ending account balance by $1,000. For example, if an account
balance was $8,600 at the end of the period, the result would be 8.6.
2.In the section of the table below titled "Expenses paid during the period,"
locate the amount for your share class. You will find this number is in the
column labeled "actual." Multiply this number by the result from step 1. Your
answer is an estimate of the expenses you paid on your account during the
period.
As a fund shareholder, you incur two types of costs. There are transaction
costs, which generally include sales charges on purchases and may include
redemption or exchange fees. There are also ongoing costs, which generally
include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The
information on this page is intended to help you understand your ongoing costs
of investing in the fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
Analyzing your fund's expenses by share class
To illustrate these ongoing costs, we have provided an example and calculated
the expenses paid by investors in each share class during the reporting period.
The information in the following table is based on an initial investment of
$1,000, which is invested at the beginning of the reporting period and held for
the entire period. Expense information is calculated two ways and each method
provides you with different information. The amount listed in the "actual"
column is calculated using the fund's actual operating expenses and total
return for the period. The amount listed in the "hypothetical" column for each
share class assumes that the return each year is 5% before expenses and
includes the fund's actual expense ratio. You should not use the hypothetical
account values and expenses to estimate either your actual account balance at
the end of the period or the expenses you paid during this reporting period.
04/01/05 -- 09/30/05
Account value at the Account value at the Expenses paid Fund's annualized
beginning of the period ($) end of the period ($) during the period ($) expense ratio (%)
- -------------------------------------------------------------------------------------------------
Actual Hypothetical Actual Hypothetical Actual Hypothetical
- -------------------------------------------------------------------------------------------------
Class A 1,000.00 1,000.00 1,012.58 1,021.06 4.04 4.05 0.80
- -------------------------------------------------------------------------------------------------
Class B 1,000.00 1,000.00 1,007.52 1,016.04 9.06 9.10 1.80
- -------------------------------------------------------------------------------------------------
Class C 1,000.00 1,000.00 1,010.58 1,019.05 6.05 6.07 1.20
- -------------------------------------------------------------------------------------------------
Class Z 1,000.00 1,000.00 1,012.58 1,021.06 4.04 4.05 0.80
- -------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to the fund's annualized expense
ratio, multiplied by the average account value over the period, then multiplied
by the number of days in the fund's most recent fiscal half-year and divided by
365.
Had the Distributor not waived a portion of Class C share's expenses, Class C
share's total return would have been reduced.
Had the Transfer Agent not waived a portion of expenses, total return would
have been reduced.
It is important to note that the expense amounts shown in the table are meant
to highlight only ongoing costs of investing in the fund and do not reflect any
transactional costs, such as sales charges, redemption or exchange fees.
Therefore, the hypothetical examples provided may not help you determine the
relative total costs of owning shares of different funds. If these
transactional costs were included, your costs would have been higher.
Compare with other funds
Since all mutual fund companies are required to include the same hypothetical
calculations about expenses in shareholder reports, you can use this
information to compare the ongoing cost of investing in the fund with other
funds. To do so, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in the shareholder reports of other funds. As you compare
hypothetical examples of other funds, it is important to note that hypothetical
examples are meant to highlight the continuing cost of investing in a fund and
do not reflect any transactional costs, such as sales charges or redemption or
exchange fees.
2
ECONOMIC UPDATE
-----------------------------
Columbia Money Market Fund
The US economy moved ahead at a healthy pace during the six-month period that
began April 1, 2005 and ended September 30, 2005. Gross domestic product (GDP)
expanded at an annualized rate of 3.8% as job growth helped sustain consumer
spending and rising profits helped business spending. Employment data was
solid, even in light of Hurricanes Katrina and Rita, which disrupted the labor
market near the end of the period. During the first five months of the period,
the economy added an average of 200,000 new jobs each month. In September,
8,000 jobs were lost as a direct result of the Gulf Coast storms -- a figure
that was lower than originally estimated and considerably lower than expected.
The unemployment rate rose to 5.1%, up from a four-year low of 4.9%.
Energy prices weighed on economic growth during the period. The first signs of
relief came in September as the price of crude oil retreated from a record high
of $69.81 a barrel. Consumer confidence readings dipped in July and August,
then fell sharply in September. The September decline was the largest in 25
years, according to the University of Michigan's monthly survey.
Despite these setbacks, the latest data on the economy suggest that it has
retained momentum. Manufacturing activity remained strong, and business
activity in non-manufacturing industries continued to expand, although the pace
slowed in September. With assistance from insurance funds, federal monies and
charitable contributions, the Gulf region is on track to rebuild, which could
send a positive ripple throughout the national economy.
Bonds delivered modest gains
The US bond market delivered little in the way of price appreciation, but
income resulted in modest positive returns. The yield on the 10-year US
Treasury note, a bellwether for the bond market, ended the period at 4.3%,
slightly lower than where it started the period. In this environment, the
Lehman Brothers Aggregate Bond Index returned 2.31% for the six-month period.
Treasuries outperformed corporate and mortgage-backed securities. However,
high-yield bonds led the fixed income markets despite a setback in the spring
when GM and Ford bonds were downgraded and again as investors appeared to grow
more cautious about risk near the end of the period. The Merrill Lynch US High
Yield, Cash Pay Index returned 3.62%.
Short-term interest rates moved higher
The Federal Reserve Board (the Fed) raised the federal funds rate, a key
short-term rate, from 2.75% to 3.75% in four consecutive one-quarter point
increases. In the wake of Hurricanes Katrina and Rita, some market observers
speculated that the Fed might curtail its rate hikes. However, Fed Chairman
Greenspan indicated that inflation was a greater concern than the
sustainability of economic growth, and we believe that the Fed is likely to
continue to raise short-term interest rates into the first half of 2006.
Despite volatility, stocks moved ahead
The S&P 500 Index -- a broad measure of large company stock market
performance -- returned 5.02% for this reporting period. Small- and mid-cap
stocks outperformed large-cap stocks. Value stocks led growth stocks except
among small caps, where growth gained a small advantage over value. Energy and
utilities stocks outperformed other sectors by a considerable margin.
Summary:
For the six-month period ended September 30, 2005
.. Despite volatility, the broad stock market generated a solid return for the
period. The S&P 500 Index returned 5.02%. As the economy expanded, small-cap
stocks outperformed large-cap stocks, as measured by the Russell 2000 Index.
[CHART]
S&P 500 Index Russell 2000 Index
------------- ------------------
5.02% 9.21%
.. Investment-grade bonds chalked up modest gains as measured by the Lehman
Brothers Aggregate Bond Index. High-yield bonds led the fixed income
markets, as measured by the Merrill Lynch US High Yield, Cash Pay Index.
[CHART]
Lehman Index Merrill Lynch Index
- ------------ -------------------
2.31% 3.62%
The S&P 500 Index is an unmanaged index that tracks the performance of 500
widely held, large-capitalization US stocks.
The Russell 2000 Index is an unmanaged index that tracks the performance of the
2,000 smallest of the 3,000 largest US companies based on market capitalization.
The Lehman Brothers Aggregate Bond Index is a market value-weighted index that
tracks the performance of fixed-rate, publicly placed, dollar-denominated
non-convertible, investment grade corporate 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.
3
PORTFOLIO MANAGER'S REPORT
--------------------------
Columbia Money Market Fund
For the six-month period ended September 30, 2005, Columbia Money Market Fund
class A shares returned 1.26%. The fund's return was higher than the average
return of its peer group, the Lipper Money Market Funds Category, which was
1.18% for the same period./1/ We believe that the fund's emphasis on
floating-rate debt helped the fund outperform its peer group average.
Portfolio positioning maintained as short-term rates climbed
In managing the fund over the past six months, we have maintained the same
portfolio positioning that we adopted in mid-2004, when the Federal Reserve
Board (the Fed) began its major policy shift to push short-term interest rates
higher. During the most recent six-month period, the Fed raised the federal
funds rate one full percentage point in four equal steps that pushed the
federal funds rate up from 2.75% to 3.75%. The federal funds rate is the rate
member banks charge each other for overnight borrowing to meet reserve
requirements.
The fund's ongoing emphasis on floating-rate debt made sense in a rising-rate
environment, because the coupons on floating-rate notes are reset often and
reflect the Fed's action. Most of the portfolio's floaters were reset relative
to the 1-month or 3-month London Interbank Offering Rate, or LIBOR, while a
small portion were reset relative to the prime rate. Together, these two groups
of floating-rate notes constituted approximately 65% of the portfolio's total
assets.
While emphasizing floating-rate notes, we also sought opportunities to invest
in longer-term fixed-rate paper when we believed that the market had adequately
factored in the effect of future rate hikes by the Fed. Having taken advantage
of several such opportunities in recent months, the fund's weighted average
maturity rose from 30 days at the beginning of the period to 39 days at the end
of the period.
Looking ahead
The Fed has indicated that it will continue to raise short-term interest rates
despite uncertainties in the national economic outlook. Investors hoped that
higher energy prices might constrain the economy and therefore allow the Fed to
end its series of rate hikes. However, the Fed has signaled that higher energy
prices threaten higher inflation, which it has traditionally countered with
higher short-term rates. As always, we plan to monitor the Fed's signals in
order to anticipate any changes in policy that could affect the money markets.
/1/Lipper Inc., a widely respected data provider in the industry, calculates an
average total return (assuming reinvestment of distributions) for mutual
funds with investment objectives similar to those of the fund. Lipper makes
no adjustment for the effect of sales loads.
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 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.
Distributions declared per share 04/01/05 - 09/30/05 ($)
Class A 0.013
-------------
Class B 0.008
-------------
Class C 0.011
-------------
Class Z 0.013
7-day yields on 09/30/05 (%)
Class A 3.12
------------
Class B 2.12
------------
Class C 2.72
------------
Class Z 3.12
30-day yields on 09/30/05 (%)
Class A 2.98
------------
Class B 1.98
------------
Class C 2.57
------------
Class Z 2.97
The 30-day SEC yields reflect the portfolios earning power, net of expenses,
expressed as an annualized percentage of the public offering price at the end
of the period.
4
- --------------------------------------------------------------------------------
Columbia Money Market Fund
About your fund
On November 18, 2005, the Columbia Money Market Fund merged with Columbia
Municipal Reserves.
[PHOTO] Karen Arneil has managed Columbia Money Market
Fund since July 2002 and has been with the advisor or its
Karen M. Arneil predecessors or affiliate organizations since 1996.
/s/ Karen M. Arneil
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks
to preserve the value of your investment at $1.00 per share, it is possible to
lose money by investing in the fund.
As always, we plan to monitor the Fed's signals in order to anticipate any
changes in policy that could affect the money markets.
5
INVESTMENT PORTFOLIO
--------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Corporate Fixed-Income Bonds & Notes - 52.5%
CONSUMER CYCLICAL - 0.8%
Lodging - 0.8% Par ($) Value ($)
- -------------------------------------- ------------------------ ---------- ----------
Boozer Lumber LOC: Wachovia Bank, N.A.
3.890% 10/01/17 (a) 3,700,000 3,700,000
------------------------ ---------- ----------
Lodging Total 3,700,000
----------
CONSUMER CYCLICAL TOTAL 3,700,000
FINANCIALS - 51.7%
Banks - 4.1%
- -------------------------------------- ------------------------ ---------- ----------
US Bank NA 3.757% 02/17/06 (a) 8,000,000 7,999,974
------------------------ ---------- ----------
Wells Fargo & Co. 3.752% 10/13/06 (a)(b) 10,000,000 10,000,000
------------------------ ---------- ----------
Banks Total 17,999,974
Diversified Financial Services - 47.6%
- -------------------------------------- ------------------------ ---------- ----------
20/20 Custom Molded Plastics LP LOC: National City Bank
3.900% 08/01/13 (c) 4,135,000 4,135,000
------------------------ ---------- ----------
701 Green Valley Associates LLC LOC: Fifth Third Bank
3.910% 01/01/18 (c) 2,100,000 2,100,000
------------------------ ---------- ----------
ACC Leasing LLC LOC: National City Bank
3.900% 05/01/23 (c) 3,302,000 3,302,000
------------------------ ---------- ----------
American Express Credit Corp. 3.760% 03/05/08 (a) 13,000,000 13,000,000
------------------------ ---------- ----------
Archbishop of Cincinnati Trustee LOC: Fifth Third Bank
3.840% 04/01/23 (c) 960,000 960,000
------------------------ ---------- ----------
Autumn House at Powder Mill, Inc. LOC: SunTrust Bank
3.850% 02/01/28 (b)(c) 1,975,000 1,975,000
------------------------ ---------- ----------
Bath Technology Associates Ltd. LOC: National City Bank
3.900% 07/01/17 (c) 1,725,000 1,725,000
------------------------ ---------- ----------
Beta Finance, Inc. 3.815% 06/13/06 (a)(b) 10,000,000 9,999,560
------------------------ ---------- ----------
Butler County Surgical Properties LLC LOC: Fifth Third Bank
3.840% 07/01/25 (c) 1,460,000 1,460,000
------------------------ ---------- ----------
Congregation Mkor Shalom LOC: Wachovia Bank, N.A.
3.910% 06/01/23 (c) 2,125,000 2,125,000
------------------------ ---------- ----------
Crescent Paper Tube Co. LOC: Fifth Third Bank
3.840% 08/01/22 (c) 3,505,000 3,505,000
------------------------ ---------- ----------
Cullinan Finance Corp. 3.763% 09/05/06 (a)(b) 15,000,000 14,997,778
------------------------ ---------- ----------
Deltime LLC Project LOC: National City Bank
3.900% 02/01/23 (c) 2,350,000 2,350,000
------------------------ ---------- ----------
Dominican Sisters LOC: Fifth Third Bank
3.840% 10/01/23 (c) 3,945,000 3,945,000
------------------------ ---------- ----------
Dublin Building LLC LOC: National City Bank
3.900% 11/01/18 (c) 1,805,000 1,805,000
See Accompanying Notes to Financial Statements.
6
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Corporate Fixed-Income Bonds & Notes - (continued)
FINANCIALS - (continued)
Diversified Financial Services - (continued) Par ($) Value ($)
- -------------------------------------------- --------------------------- ---------- ----------
Fortune 5 LLC LOC: Fifth Third Bank
3.840% 05/01/21 (c) 1,465,000 1,465,000
--------------------------- ---------- ----------
General Electric Capital Corp. 3.889% 10/17/06 (a) 13,000,000 13,000,000
--------------------------- ---------- ----------
Global Properties Holdings, Inc. LOC: Fifth Third Bank
3.840% 05/01/25 (c) 2,500,000 2,500,000
--------------------------- ---------- ----------
Greene River Packing, Inc. LOC: Wachovia Bank
3.910% 11/01/16 (c) 1,500,000 1,500,000
--------------------------- ---------- ----------
Harbor Plaza LLC LOC: Federal Home Loan Bank
3.840% 07/01/49 (c) 2,000,000 2,000,000
--------------------------- ---------- ----------
Harrier Finance Funding LLC 3.610% 10/25/05 (a)(b) 10,000,000 10,000,000
--------------------------- ---------- ----------
Hudson Montessori School Project LOC: National City Bank
3.900% 07/01/30 (c) 3,111,000 3,111,000
--------------------------- ---------- ----------
Kenwood Lincoln Mercury LOC: National City Bank
3.900% 05/01/15 (c) 3,845,000 3,845,000
--------------------------- ---------- ----------
Kingston Care Center of Sylvania LOC: JPMorgan Chase Bank
3.890% 05/01/33 (c) 11,675,000 11,675,000
--------------------------- ---------- ----------
Lehmann Property Group LLC LOC: Fifth Third Bank
3.840% 04/01/55 (c) 2,500,000 2,500,000
--------------------------- ---------- ----------
Michigan Equity Group LLC LOC: Fifth Third Bank
3.840% 04/01/34 (c) 1,350,000 1,350,000
3.840% 04/01/34 (c) 4,540,000 4,540,000
--------------------------- ---------- ----------
Morgan Stanley 3.870% 10/27/06 (a) 12,000,000 12,000,000
--------------------------- ---------- ----------
MRN LP LOC: US Bank NA
3.900% 12/01/33 (c) 11,788,000 11,788,000
--------------------------- ---------- ----------
Nebar Investments LLC LOC: Fifth Third Bank
3.840% 07/01/50 (c) 2,000,000 2,000,000
--------------------------- ---------- ----------
Physicians Medical Plaza LLC LOC: Fifth Third Bank
3.840% 12/01/24 (c) 1,000,000 1,000,000
--------------------------- ---------- ----------
Pilot Drive Properties LLC LOC: JPMorgan Chase Bank
3.890% 02/01/35 (c) 4,000,000 4,000,000
--------------------------- ---------- ----------
Precision Radiotherapy LLC LOC: Fifth Third Bank
3.840% 08/01/18 (c) 2,300,000 2,300,000
--------------------------- ---------- ----------
PS Greetings, Inc. LOC: LaSalle Bank NA
4.000% 12/01/33 (c) 965,000 965,000
--------------------------- ---------- ----------
Redcay Funding LLC LOC: SunTrust Bank
3.860% 10/01/30 (c) 1,675,000 1,675,000
3.860% 11/01/25 (c) 2,145,000 2,145,000
See Accompanying Notes to Financial Statements.
7
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Corporate Fixed-Income Bonds & Notes - (continued)
FINANCIALS - (continued)
Diversified Financial Services - (continued) Par ($) Value ($)
- -------------------------------------------- ---------------------------- ------------- -----------
Royce G. Pulliam M&A LLC LOC: Fifth Third Bank
3.840% 08/01/25 (c) 1,060,000 1,060,000
---------------------------- ------------- -----------
Sedna Finance, Inc. 3.530% 10/14/05 (a)(b) 10,000,000 10,000,000
---------------------------- ------------- -----------
Seventh Avenue Associates LOC: National City Bank
3.900% 01/01/27 (c) 475,000 475,000
---------------------------- ------------- -----------
Shepherd Capital LLC LOC: Wachovia Bank, N.A.
3.960% 03/15/49 (c) 1,895,000 1,895,000
---------------------------- ------------- -----------
Sigma Finance, Inc. 4.000% 08/11/06 (a)(b) 7,000,000 6,994,389
---------------------------- ------------- -----------
Skeletal Properties LLC LOC: Fifth Third Bank
3.840% 11/01/14 (c) 2,000,000 2,000,000
---------------------------- ------------- -----------
Southtown Partners LLC LOC: Fifth Third Bank
3.840% 12/01/44 (c) 2,000,000 2,000,000
---------------------------- ------------- -----------
Springside Corp. Exchange Partners I LLC LOC: US Bank NA
3.900% 02/01/36 (c) 2,190,000 2,190,000
---------------------------- ------------- -----------
State Crest Ltd. LOC: Fifth Third Bank
3.840% 06/12/23 (c) 1,200,000 1,200,000
---------------------------- ------------- -----------
Suspa, Inc. LOC: Fifth Third Bank
3.890% 02/01/25 (c) 750,000 750,000
---------------------------- ------------- -----------
Tango Finance Corp. 3.589% 01/17/06 (a)(b) 10,000,000 10,000,376
---------------------------- ------------- -----------
Whistlejacket Capital LLC. 3.570% 05/15/06 (a)(b) 3,000,000 2,999,814
---------------------------- ------------- -----------
White Pine Finance LLC 3.580% 04/20/06 (a)(b) 2,000,000 1,999,889
---------------------------- ------------- -----------
YMBK at Beavercreek LOC: Fifth Third Bank
3.840% 07/01/30 (c) 4,890,000 4,890,000
---------------------------- ------------- -----------
Diversified Financial Services Total 211,197,806
-----------
FINANCIALS TOTAL 229,197,780
Total Corporate Fixed-Income Bonds & Notes
(cost of $232,897,780) 232,897,780
Commercial Paper - 30.7%
- -------------------------------------------- ---------------------------- ------------- -----------
Amstel Funding Corp. 3.250% 10/18/05 (d) 5,000,000 4,992,326
3.960% 03/24/06 (d) 10,000,000 9,808,600
---------------------------- ------------- -----------
Atlantis One Funding Corp. 3.300% 10/04/05 (d) 3,000,000 2,999,187
---------------------------- ------------- -----------
Atlas Capital Fund Ltd. 3.880% 12/20/05 (b) 5,000,000 4,956,889
---------------------------- ------------- -----------
Beta Finance, Inc. 3.330% 10/17/05 (b) 7,000,000 6,989,796
See Accompanying Notes to Financial Statements.
8
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Commercial Paper - (continued) Par ($) Value ($)
- ------------------------------------------------------ ---------------------------- ---------- -----------
Concord Minutemen Capital Co. 3.300% 10/18/05 (b) 5,000,000 4,992,208
3.330% 10/20/05 (b) 5,000,000 4,991,212
---------------------------- ---------- -----------
CRC Funding LLC 3.730% 11/21/05 (d) 4,000,000 3,978,863
---------------------------- ---------- -----------
Crown Point Capital Co. 3.680% 01/12/06 (b) 5,000,000 4,947,356
---------------------------- ---------- -----------
Grampian Funding LLC 3.450% 10/04/05 (d) 3,000,000 2,999,138
3.920% 02/17/06 (d) 5,000,000 4,924,322
3.960% 03/22/06 (d) 5,000,000 4,905,400
---------------------------- ---------- -----------
Klio Funding Ltd 3.790% 10/21/05 (b) 7,000,000 6,985,261
---------------------------- ---------- -----------
Lexington Parker Capital Corp. 3.950% 03/14/06 (d) 5,000,000 4,910,028
---------------------------- ---------- -----------
Mane Funding Corp. 3.860% 12/19/05 (d) 17,000,000 16,856,001
---------------------------- ---------- -----------
Mortgage Interest Networking Trust 3.790% 10/20/05 (d) 5,000,000 4,989,999
---------------------------- ---------- -----------
Picaros Funding LLC 3.540% 11/08/05 (d) 4,000,000 3,985,053
3.920% 02/17/06 (d) 2,000,000 1,969,729
---------------------------- ---------- -----------
Scaldis Capital LLC 3.730% 11/21/05 (d) 5,000,000 4,973,579
---------------------------- ---------- -----------
Stanfield Victoria Finance Ltd. 3.510% 10/31/05 (b) 5,000,000 4,985,375
3.780% 11/01/05 (b) 7,000,000 6,977,215
---------------------------- ---------- -----------
Sunbelt Funding Corp. 3.740% 11/14/05 (d) 8,000,000 7,963,431
3.800% 11/14/05 (d) 10,000,000 9,953,556
Total Commercial Paper
(cost of $136,034,524) 136,034,524
Municipal Bonds - 9.4%
ALABAMA - 0.6%
- ------------------------------------------------------ ---------------------------- ---------- -----------
AL City of Atmore Series 2004
LOC: Wachovia Bank, N.A.
3.890% 01/01/34 (c) 2,655,000 2,655,000
---------------------------- ---------- -----------
ALABAMA TOTAL 2,655,000
ILLINOIS - 2.2%
- ------------------------------------------------------ ---------------------------- ---------- -----------
IL Finance Authority Revenue Midwest Molding Project
Series 2005
LOC: Federal Home Loan Bank
3.900% 07/01/33 (c) 7,000,000 7,000,000
---------------------------- ---------- -----------
IL Upper River Valley Development Authority Industrial Advance Flexible
Development Series 2003 B
LOC: Lasalle Bank N.A.
3.880% 06/01/17 (c) 2,600,000 2,600,000
---------------------------- ---------- -----------
ILLINOIS TOTAL 9,600,000
See Accompanying Notes to Financial Statements.
9
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Municipal Bonds - (continued)
MARYLAND - 2.4% Par ($) Value ($)
- ----------------------------------------------------- ------------------------------------------- --------- ----------
MD Baltimore Project Revenue Baltimore Parking Facilities,
Series 2002,
Insured: FGIC,
SPA: Dexia Credit Local
3.850% 07/01/32 (a) 2,000,000 2,000,000
------------------------------------------- --------- ----------
MD Health And Higher Educational Facilities Authority Charlestown
Revenue Series B
LOC: Wachovia Bank, N.A.
3.850% 01/01/28 (a) 8,705,000 8,705,000
------------------------------------------- --------- ----------
MARYLAND TOTAL 10,705,000
MINNESOTA - 0.5%
- ----------------------------------------------------- ------------------------------------------- --------- ----------
MN Lake City Industrial Development Revenue Valley Craft, Inc. Project
Series 1997
LOC: US Bank Trust N.A.
3.940% 10/01/17 (c) 2,000,000 2,000,000
------------------------------------------- --------- ----------
MINNESOTA TOTAL 2,000,000
MISSISSIPPI - 1.1%
- ----------------------------------------------------- ------------------------------------------- --------- ----------
MS Business Financing Corp. Series 2005,
LOC: Wachovia Bank N.A.
3.900% 01/14/15 (c) 5,000,000 5,000,000
------------------------------------------- --------- ----------
MISSISSIPPI TOTAL 5,000,000
TENNESSEE - 0.4%
- ----------------------------------------------------- ------------------------------------------- --------- ----------
TN Coffee County Revenue Industrial Board, Inc. Stamtec, Inc.,
Revenue Series 1999,
LOC: JPMorgan Chase Bank
3.910% 09/01/14 (c) 1,825,000 1,825,000
------------------------------------------- --------- ----------
TENNESSEE TOTAL 1,825,000
VIRGINIA - 0.5%
- ----------------------------------------------------- ------------------------------------------- --------- ----------
VA Richmond Redevelopment & Housing Authority Old Manchester,
Project Revenue Series 1995 B,
LOC : Wachovia Bank, N.A.
3.700% 12/01/25 (c) 2,310,000 2,310,000
------------------------------------------- --------- ----------
VIRGINIA TOTAL 2,310,000
WASHINGTON - 1.7%
- ----------------------------------------------------- ------------------------------------------- --------- ----------
WA State Housing Finance Commission Olympic Place Project,
L Series 2003 B,
LOC: US Bank NA
3.880% 11/01/36 (c) 3,175,000 3,175,000
Rainier Court Project,
Series 2003 B
LOC: Federal National Mortgage Association
3.880% 12/15/36 (c) 4,250,000 4,250,000
------------------------------------------- --------- ----------
WASHINGTON TOTAL 7,425,000
Total Municipal Bonds
(cost of $41,520,000) 41,520,000
See Accompanying Notes to Financial Statements.
10
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Certificates of Deposit - 7.0% Par ($) Value ($)
- -------------------------------- ----------------------------------------------------------- ---------- -----------
Barclays Bank PLC 3.754% 06/21/06 (a) 5,000,000 4,999,551
----------------------------------------------------------- ---------- -----------
Canadian Imperial Bank of Canada 3.828% 03/15/08 (a) 20,000,000 20,000,000
----------------------------------------------------------- ---------- -----------
CS First Boston 3.500% 12/29/05 (a) 6,000,000 6,000,294
Total Certificates of Deposit
(cost of $30,999,845) 30,999,845
Short-Term Obligation - 0.4%
- -------------------------------- ----------------------------------------------------------- ---------- -----------
Repurchase agreement with State Street Bank & Trust Co.,
dated 09/30/05, due 10/03/05 at 3.700%, collateralized by a
U.S. Government Agency maturing 08/03/15, market value
of $1,965,998 (repurchase proceeds $1,927,594) 1,927,000 1,927,000
Total Short-Term Obligation
(cost of $1,927,000) 1,927,000
Total Investments - 100.0%
(cost of $443,379,149) (e) 443,379,149
Other Assets & Liabilities, Net - 0.0% 139,703
Net Assets - 100.0% 443,518,852
NOTES TO INVESTMENT PORTFOLIO:
(a)The interest rate shown on floating rate or
variable rate securities reflects the rate
at September 30, 2005.
(b)Security exempt from registration pursuant
to Rule 144A under the Securities Act of
1933. These securities may be resold in
transactions exempt from registration,
normally to qualified institutional buyers.
At September 30, 2005, these securities,
which are not illiquid, amounted to
$124,792,118, which represents 28.1% of net
assets.
(c)Variable rate demand notes. These securities
are payable upon demand and are secured by
letters of credit or other credit support
agreements from banks. The interest rates
change periodically and the interest rates
shown reflect the rates at September 30,
2005.
(d)Security exempt from registration under
Section 4(2) of the Securities Act of 1933.
These securities may only be resold in
exempt transactions to qualified buyers.
Private resales of these securities to
qualified institutional buyers are also
exempt from registration pursuant to Rule
144A under the Securities Act of 1933. At
September 30, 2005, these securities
amounted to $90,209,212, which represents
20.3% of net assets.
(e)Cost for federal income tax purposes is
$443,379,149.
ACRONYM NAME
----------------------------------------
FGIC Financial Guaranty Insurance Co.
LOC Letter of Credit/Line of Credit
SPA Stand-by Purchase Agreement
See Accompanying Notes to Financial Statements.
11
STATEMENT OF ASSETS AND LIABILITIES
--------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
($)
- ------------------------- -------------------------------------------------------- -----------
Assets Investments, at cost 443,379,149
-----------
Investments, at value 443,379,149
Cash 5
Receivable for:
Fund shares sold 426,199
Interest 981,602
Expense reimbursement due from Investment Advisor 23
Deferred Trustees' compensation plan 30,698
-----------
Total Assets 444,817,676
-------------------------------------------------------- -----------
Liabilities Payable for:
Fund shares repurchased 822,568
Distributions 24,293
Investment advisory fee 92,122
Administration fee 98,347
Transfer agent fee 125,700
Pricing and bookkeeping fees 19,464
Trustees' fees 3,176
Custody fee 3,265
Distribution and service fees 49,755
Chief compliance officer expenses and fees 1,375
Deferred Trustees' fees 30,698
Other liabilities 28,061
-----------
Total Liabilities 1,298,824
Net Assets 443,518,852
-------------------------------------------------------- -----------
Composition of Net Assets Paid-in capital 443,553,777
Overdistributed net investment income (30,807)
Accumulated net realized loss (4,118)
-----------
Net Assets 443,518,852
-------------------------------------------------------- -----------
Class A Net assets 188,074,160
Shares outstanding 188,126,397
Net asset value and offering price per share 1.00(a)
-------------------------------------------------------- -----------
Class B Net assets 53,799,675
Shares outstanding 53,831,484
Net asset value and offering price per share 1.00(a)
-------------------------------------------------------- -----------
Class C Net assets 8,404,633
Shares outstanding 8,409,590
Net asset value and offering price per share 1.00(a)
-------------------------------------------------------- -----------
Class Z Net assets 193,240,384
Shares outstanding 193,491,437
Net asset value, offering and redemption price per share 1.00
(a)Redemption price per share is equal to net
asset value less any applicable contingent
deferred sales charge.
See Accompanying Notes to Financial Statements.
12
STATEMENT OF OPERATIONS
-----------------------
For the Six Months Ended September 30, 2005 (Unaudited) Columbia Money Market Fund
($)
- -------------------------------- ------------------------------------------------------- ---------
Investment Income Interest 7,628,452
------------------------------------------------------- ---------
Expenses Investment advisory fee 579,026
Administration fee 579,026
Distribution fee:
Class B 215,400
Class C 34,875
Service fee:
Class B 71,801
Class C 11,632
Transfer agent fee 550,720
Pricing and bookkeeping fees 61,908
Trustees' fees 9,398
Custody fee 8,070
Chief compliance officer expenses and fees (See Note 4) 2,584
Other expenses 90,789
---------
Total Expenses 2,215,229
Fees waived by Distributor - Class C (27,896)
Fees waived by Transfer agent (27,460)
Custody earnings credit (44)
---------
Net Expenses 2,159,829
---------
Net Investment Income 5,468,623
------------------------------------------------------- ---------
Net Realized Loss on Investments Net realized loss on investments (2,920)
---------
Net Increase in Net Assets from Operations 5,465,703
See Accompanying Notes to Financial Statements.
13
STATEMENT OF CHANGES IN NET ASSETS
--------------------------
Columbia Money Market Fund
(Unaudited)
Six Months Year
Ended Ended
September 30, March 31,
Increase (Decrease) in Net Assets 2005 ($) 2005 ($)
- -------------------------------------- ----------------------------------------------- ------------- ------------
Operations Net investment income 5,468,623 4,544,808
Net realized gain (loss) on investments (2,920) 5,343
------------- ------------
Net Increase from Operations 5,465,703 4,550,151
----------------------------------------------- ------------- ------------
Distributions Declared to Shareholders From net investment income:
Class A (2,439,185) (2,113,778)
Class B (427,585) (191,763)
Class C (97,164) (63,771)
Class Z (2,504,689) (2,175,651)
------------- ------------
Total Distributions Declared to Shareholders (5,468,623) (4,544,963)
----------------------------------------------- ------------- ------------
Share Transactions Class A:
Subscriptions 54,929,184 215,560,472
Distributions reinvested 2,385,288 2,043,937
Redemptions (77,387,362) (238,207,842)
------------- ------------
Net Decrease (20,072,890) (20,603,433)
Class B:
Subscriptions 14,541,891 53,430,955
Distributions reinvested 380,096 169,267
Redemptions (22,589,290) (74,471,696)
------------- ------------
Net Decrease (7,667,303) (20,871,474)
Class C:
Subscriptions 2,668,822 16,402,459
Distributions reinvested 91,243 58,574
Redemptions (4,334,266) (21,875,105)
------------- ------------
Net Decrease (1,574,201) (5,414,072)
Class Z:
Subscriptions 69,918,669 179,117,629
Distributions reinvested 2,419,048 2,094,040
Redemptions (82,810,513) (225,823,469)
------------- ------------
Net Decrease (10,472,796) (44,611,800)
Net Decrease from Share Transactions (39,787,190) (91,500,779)
------------- ------------
Total Decrease in Net Assets (39,790,110) (91,495,591)
----------------------------------------------- ------------- ------------
Net Assets Beginning of period 483,308,962 574,804,553
End of period 443,518,852 483,308,962
Overdistributed net investment income at end of
period (30,807) (30,807)
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
Columbia Money Market Fund
(Unaudited)
Six Months Year
Ended Ended
September 30, March 31,
2005 2005
- ----------------- ------------------------------------- ------------- ------------
Changes in Shares Class A:
Subscriptions 54,929,184 215,560,472
Issued for distributions reinvested 2,385,288 2,043,937
Redemptions (77,387,362) (238,207,842)
------------- ------------
Net Decrease (20,072,890) (20,603,433)
Class B:
Subscriptions 14,541,892 53,430,954
Issued for distributions reinvested 380,096 169,266
Redemptions (22,589,286) (74,471,685)
------------- ------------
Net Decrease (7,667,298) (20,871,465)
Class C:
Subscriptions 2,668,822 16,402,459
Issued for distributions reinvested 91,243 58,575
Redemptions (4,334,266) (21,875,105)
------------- ------------
Net Decrease (1,574,201) (5,414,071)
Class Z:
Subscriptions 69,918,669 179,117,629
Issued for distributions reinvested 2,419,048 2,094,040
Redemptions (82,810,513) (225,823,468)
------------- ------------
Net Decrease (10,472,796) (44,611,799)
See Accompanying Notes to Financial Statements.
15
NOTES TO FINANCIAL STATEMENTS
--------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Note 1. Organization
Columbia Money Market Fund (the "Fund"), a series of Columbia Funds Trust II
(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 maximum current income consistent with capital preservation and
the maintenance of liquidity.
Fund Shares
The Fund may issue an unlimited number of shares and offers four classes of
shares: Class A, Class B, Class C and Class Z. Each share class has its own
sales charge and expense structure.
Class A shares are sold at net asset value. Class A shares are subject to a
1.00% contingent deferred sales charge ("CDSC") on shares sold within twelve
months on an original purchase of $1 million to $25 million. When exchanged for
Class A shares in another Columbia Fund, a sales charge may be imposed. Class B
shares are subject to a maximum CDSC of 5.00% based upon the holding period
after purchase. Class B shares generally will convert to Class A shares eight
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
Securities in the Fund are valued utilizing the amortized cost valuation method
permitted in accordance with Rule 2a-7 under the 1940 Act provided certain
conditions are met. This method involves valuing a portfolio security initially
at its cost and thereafter assuming a constant accretion or amortization to
maturity of any discount or premium, respectively.
Short-term obligations maturing within 60 days are valued at amortized cost,
which approximates market value.
Security Transactions
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
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. Premium and discount are
amortized and accreted, respectively, on all debt securities.
Determination of Class Net Asset Values
All income, expenses (other than class-specific expenses, as shown on the
Statement of Operations) and realized and unrealized gains (losses) are
allocated to each class of the Fund on a daily basis for purposes
16
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
of determining the net asset value of each class. Income and expenses are
allocated to each class based on the settled shares method, while realized and
unrealized gains (losses) are allocated based on the relative net assets of
each class.
Federal Income Tax Status
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable 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
Dividends from net investment income are declared daily and paid monthly. Net
realized capital gains, if any, are distributed at least annually.
Note 3. Federal Tax Information
The tax character of distributions paid during the years ended March 31, 2005
and March 31, 2004 was as follows:
March 31, March 31,
2005 2004
----------------------------------------------
Distributions paid from:
----------------------------------------------
Ordinary Income $4,544,963 $1,116,451
The following capital loss carryforwards, determined as of March 31, 2005, 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
-----------------------
2008 $ 694
2009 355
2012 149
-----------------------
Total $1,198
-----------------------
Of the capital loss carryforwards attributable to the Fund, $111 was obtained
in the merger with Stein Roe Cash Reserves Fund and will expire on March 31,
2008.
Capital loss carryforwards of $5,343 were utilized during the year ended
March 31, 2005.
Note 4. Fees and Compensation Paid to Affiliates
Investment Advisory Fee
Columbia Management Advisors, LLC ("Columbia"), an indirect wholly owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund. On September 30, 2005, Columbia Management Advisors, Inc. changed its
name to Columbia Management Advisors, LLC. Columbia receives a monthly
investment advisory fee based on the Fund's average daily net assets at the
following annual rates:
Average Daily Net Assets Annual Fee Rate
------------------------------------------
First $500 million 0.250%
------------------------------------------
$500 million to $1 billion 0.225%
------------------------------------------
Over $1 billion 0.200%
------------------------------------------
For the six months ended September 30, 2005, the Fund's annualized effective
investment advisory fee rate was 0.25%.
Administration Fee
Columbia provides administrative and other services to the Fund for a monthly
administration fee based on the Fund's average daily net assets at the
following annual rates:
Average Daily Net Assets Annual Fee Rate
------------------------------------------
First $500 million 0.25%
------------------------------------------
$500 million to $1 billion 0.20%
------------------------------------------
Over $1 billion 0.15%
------------------------------------------
For the six months ended September 30, 2005, the Fund's annualized effective
administration fee rate was 0.25%.
Pricing and Bookkeeping Fees
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State
Street Corporation ("State Street"). As a result, Columbia pays the total fees
collected to State Street under the Outsourcing Agreement.
17
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Under its pricing and bookkeeping agreement with the Fund, Columbia receives
from the Fund an annual fee of $10,000 paid monthly, and in any month that the
Fund's average daily net assets exceed $50 million, an additional monthly fee.
The additional fee rate is calculated by taking into account the fees payable
to State Street under the Outsourcing Agreement. This rate is applied to the
average daily net assets of the Fund for that month. The Fund also pays
additional fees for pricing services based on the number of securities held by
the Fund.
For the six months ended September 30, 2005, the annualized effective pricing
and bookkeeping fee rate for the Fund, inclusive of out-of-pocket expenses,
was 0.026%.
Transfer Agent Fee
Columbia Management Services, Inc. (the "Transfer Agent"), an affiliate of
Columbia, provides shareholder services to the Fund and has contracted with
Boston Financial Data Services ("BFDS") to serve as sub-transfer agent. On
August 22, 2005, Columbia Funds Services, Inc. changed its name to Columbia
Management Services, Inc. For its services, the Transfer Agent receives a fee,
paid monthly, at the annual rate of $33.50 per open account. The Transfer Agent
also receives reimbursement for certain out-of-pocket expenses.
For the period from September 1, 2005 through October 31, 2005, the Transfer
Agent has voluntarily agreed to waive a portion of its fees to reflect reduced
contractual fees that will be charged to the Fund effective November 1, 2005.
For the six months ended September 30, 2005, the Fund's annualized effective
transfer agent fee rate, inclusive of out-of-pocket expenses, was 0.23%.
Underwriting Discounts, Service and Distribution Fees
Columbia Management Distributors, Inc. (the "Distributor"), an affiliate of
Columbia, is the principal underwriter of the Fund. On August 22, 2005,
Columbia Funds Distributor, Inc. changed its name to Columbia Management
Distributors, Inc. For the six months ended September 30, 2005, the Distributor
has retained net CDSC fees of $7, $131,607 and $1,558 on Class A, Class B and
Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan (the "Plan") which allows the payment of a
monthly service fee to the Distributor at the annual rate of 0.25% of the
average daily net assets attributable to Class B and Class C shares of the
Fund. The Plan also requires the payment of a monthly distribution fee to the
Distributor at the annual rate of 0.75% of the average daily net assets
attributable to Class B and Class C shares only. The Distributor has
voluntarily agreed to waive a portion of the Class C share distribution fee so
that it will not exceed 0.15%.
The CDSC and the fees received from the Plan are used principally as repayment
to the Distributor for amounts paid by the Distributor to dealers who sold such
shares.
Custody Credits
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset
arrangement in an income-producing asset if it had not entered into such an
agreement.
Fees Paid to Officers and Trustees
With the exception of one officer, all officers of the Fund are employees of
Columbia or its affiliates and receive no compensation from the Fund. The Board
of Trustees appointed a Chief Compliance Officer to the Fund in accordance with
federal securities regulations. The Fund, along with other affiliated funds,
will pay its pro-rata share of the expenses associated with the Chief
Compliance Officer position. The Fund's fee will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
Other
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended September 30, 2005, the Fund paid $993 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
18
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Note 5. Shares of Beneficial Interest
As of September 30, 2005, Bank of America and/or its affiliates held 18.5% of
the shares outstanding of the Fund. Subscription and redemption activity of
these accounts may have a significant effect on the operations of the Fund.
Note 6. Disclosure of Significant Risks and Contingencies
Concentration of Credit Risk
The Fund holds investments that are insured by private insurers who guarantee
the payment of principal and interest in the event of default or that are
supported by a letter of credit. At September 30, 2005, private insurers who
insured greater than 5% of the total investments of the Fund were as follows:
% of
Insurer Total Investments
------------------------------------
Fifth Third Bank 12.1%
------------------------------------
Wachovia Bank N.A. 6.3%
------------------------------------
Legal Proceedings
On February 9, 2005, Columbia and the Distributor (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to
collectively as the "Settlements". The Settlements contain substantially the
same terms and conditions as outlined in the agreements in principle which
Columbia Group entered into with the SEC and NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group has agreed among other
things, to: pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution
consultant (see below). The Columbia Funds have also undertaken to implement
certain governance measures designed to maintain the independence of their
boards of trustees. The NYAG Settlement also, among other things, requires
Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP
Distributors, LLC to reduce certain Columbia Funds, Nations Funds and other
mutual funds management fees collectively by $32 million per year for five
years, for a projected total of $160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant,
who is acceptable to the SEC staff and the Columbia Funds' independent
trustees. The distribution plan must be based on a methodology developed in
consultation with the Columbia Group and the Funds' independent trustees and
not unacceptable to the staff of the SEC. At this time, the distribution plan
is still under development. As such, any gain to the Funds or its shareholders
cannot currently be determined.
As a result of these matters or any adverse publicity or other developments
resulting from them, there may be increased redemptions or reduced sales of
fund shares, which could increase transaction costs or operating expenses, or
have other adverse consequences for the funds.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov.
A copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain funds, the Trustees of the Columbia Funds,
FleetBoston Financial Corporation and its affiliated entities and/or Bank of
America and its affiliated entities. More than 300 cases including those filed
against entities unaffiliated with the funds, their Boards, FleetBoston
Financial Corporation and its affiliated entities and/or Bank of America and
its affiliated entities have been transferred to the Federal District Court in
Maryland and consolidated in a multi-district proceeding (the "MDL").
The derivative cases purportedly brought on behalf of the Columbia Funds in the
MDL have been consolidated under the lead case. The fund derivative plaintiffs
allege that the funds were harmed by market timing and late trading activity
and seek, among other things, the removal of the trustees of the Columbia
19
- --------------------------------------------------------------------------------
September 30, 2005 (Unaudited) Columbia Money Market Fund
Funds, removal of the Columbia Group, disgorgement of all management fees and
monetary damages.
On March 21, 2005 purported class action plaintiffs filed suit in Massachusetts
state court alleging that the conduct, including market timing, entitles Class
B shareholders in certain Columbia funds to an exemption from contingent
deferred sales charges upon early redemption (the "CDSC Lawsuit"). The CDSC
Lawsuit has been removed to federal court in Massachusetts and the federal
Judicial Panel has transferred the CDSC Lawsuit to the MDL.
The MDL is ongoing. Accordingly, an estimate of the financial impact of this
litigation on any Fund, if any, cannot currently be made.
On January 11, 2005, a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the
Columbia Funds and Columbia. The lawsuit alleged that defendants violated
common law duties to fund shareholders as well as sections of the Investment
Company Act of 1940, by failing to ensure that the Funds and other affiliated
funds participated in securities class action settlements for which the funds
were eligible. Specifically, plaintiffs alleged that defendants failed to
submit proof of claims in connection with settlements of securities class
action lawsuits filed against companies in which the funds held positions.
Plaintiffs filed a notice of voluntary dismissal of the lawsuit as to all
defendants and all claims without prejudice, which was so-ordered by the judge
on or about November 9, 2005.
In 2004, certain Columbia funds, advisers and affiliated entities were named as
defendants in certain purported shareholder class and derivative actions making
claims, including claims under the Investment Company and the Investment
Advisers Acts of 1940 and state law. The suits allege, inter alia, that the
fees and expenses paid by the funds are excessive and that the advisers and
their affiliates inappropriately used fund assets to distribute the funds and
for other improper purpose. On March 2, 2005, the actions were consolidated in
the Massachusetts federal court as In re Columbia Entities Litigation. The
plaintiffs filed a consolidated amended complaint on June 9, 2005.
The Funds and other defendants to these actions, including Columbia and various
of its affiliates, certain other mutual funds advised by Columbia and its
affiliates, and various directors of such funds, have denied these allegations
and are contesting the plaintiffs' claims. These proceedings (with the
exception of the January 11, 2005 "failure to participate" litigation, which
has been dismissed) are ongoing, however, based on currently available
information, Columbia believes that these lawsuits are without merit, that the
likelihood they will have a material adverse impact on any fund is remote, and
that the lawsuits are not likely to materially affect its ability to provide
investment management services to its clients, including the Funds.
Note 7. Subsequent Event
On November 18, 2005, the Columbia Money Market Fund merged with Columbia Cash
Reserves.
20
FINANCIAL HIGHLIGHTS
--------------------------
Columbia Money Market Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Year Period
Ended Ended Ended
September 30, March 31, March 31, Year Ended June 30,
Class A Shares 2005 2005 2004 (a) 2003 (b) 2002 (b) 2001 (b)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -----------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.013(c) 0.010(c) 0.002(c) 0.006(c) 0.015 0.052
- -----------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment
income (0.013) (0.010) (0.002) (0.006) (0.015) (0.052)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d) 1.26%(e)(f) 1.01% 0.22%(e)(f) 0.60% 1.56% 5.34%(f)
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses 0.80%(h) 0.79%(g) 0.88%(g)(h) 0.89%(g) 1.01% 0.70%
Net investment income 2.49%(h) 0.97%(g) 0.27%(g)(h) 0.61%(g) 1.54% 5.31%
Waiver/reimbursement 0.01% -- 0.04%(h) -- -- 0.19%
Net assets, end of
period (000's) $188,074 $208,148 $228,750 $266,602 $210,616 $189,822
- -----------------------------------------------------------------------------------------------------------------------------
Class A Shares 2000 (b)
- ------------------------------------------
Net Asset Value,
Beginning of Period $ 1.000
- ------------------------------------------
Income from Investment
Operations:
Net investment income 0.052
- ------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment
income (0.052)
- ------------------------------------------
Net Asset Value, End of
Period $ 1.000
Total return (d) 5.26%(f)
- ------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses 0.65%(g)
Net investment income 5.13%(g)
Waiver/reimbursement 0.19%
Net assets, end of
period (000's) $178,678
- ------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to March 31.
(b)The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c)Per share data was calculated using average shares outstanding during the
period.
(d)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(e)Not annualized.
(f)Had the Investment Advisor, Distributor and/or Transfer Agent not waived a
portion of expenses, total return would have been reduced.
(g)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h)Annualized.
21
- --------------------------------------------------------------------------------
Columbia Money Market Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Year Period
Ended Ended Ended
September 30, March 31, March 31, Year Ended June 30,
Class B Shares 2005 2005 2004 (a) 2003 (b) 2002 (b) 2001 (b) 2000 (b)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- --------------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.008(c) 0.003(c) 0.001(c) 0.002(c) 0.007 0.042 0.041
- --------------------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment
income (0.008) (0.003) (0.001) (0.002) (0.007) (0.042) (0.041)
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d)(e) 0.75%(f) 0.28% 0.08%(f) 0.17% 0.73% 4.31% 3.99%
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses 1.80%(h) 1.48%(g) 1.06%(g)(h) 1.41%(g) 1.84% 1.70% 1.65%(g)
Net investment income 1.49%(h) 0.28%(g) 0.09%(g)(h) 0.10%(g) 0.71% 4.31% 4.13%(g)
Waiver/reimbursement 0.01% 0.31% 0.86%(h) 0.56% 0.17% 0.19% 0.19%
Net assets, end of
period (000's) $53,800 $61,467 $82,338 $110,776 $96,827 $80,879 $69,214
- --------------------------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to March 31.
(b)The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c)Per share data was calculated using average shares outstanding for the
period.
(d)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(e)Had the Investment Advisor, Distributor, and/or Transfer Agent not waived a
portion of expenses, total return would have been reduced.
(f)Not annualized.
(g)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h)Annualized.
22
- --------------------------------------------------------------------------------
Columbia Money Market Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Year Period
Ended Ended Ended
September 30, March 31, March 31, Year Ended June 30,
Class C Shares 2005 2005 2004 (a) 2003 (b) 2002 (b) 2001 (b)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
- -----------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net investment income 0.011(c) 0.006(c) 0.001(c) 0.003(c) 0.011 0.048
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions
Declared to Shareholders:
From net investment
income (0.011) (0.006) (0.001) (0.003) (0.011) (0.048)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d)(e) 1.06%(f) 0.63% 0.08%(f) 0.27% 1.16% 4.93%
- -----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses 1.20%(g)(h) 1.16%(g) 1.06%(g)(h) 1.23%(g) 1.41% 1.10%
Net investment income 2.09%(g)(h) 0.60%(g) 0.10%(g)(h) 0.30%(g) 1.14% 4.91%
Waiver/reimbursement 0.61%(h) 0.63% 0.86%(h) 0.66% 0.60% 0.79%
Net assets, end of
period (000's) $ 8,405 $ 9,979 $15,393 $17,324 $20,772 $10,010
- -----------------------------------------------------------------------------------------------------------------------
Class C Shares 2000 (b)
- -----------------------------------------
Net Asset Value,
Beginning of Period $ 1.000
- -----------------------------------------
Income from Investment
Operations:
Net investment income 0.048
- -----------------------------------------
Less Distributions
Declared to Shareholders:
From net investment
income (0.048)
- -----------------------------------------
Net Asset Value, End of
Period $ 1.000
Total return (d)(e) 4.71%
- -----------------------------------------
Ratios to Average Net Assets/
Supplemental Data:
Expenses 1.05%(g)
Net investment income 4.73%(g)
Waiver/reimbursement 0.79%
Net assets, end of
period (000's) $ 3,950
- -----------------------------------------
(a)The Fund changed its fiscal year end from June 30 to March 31.
(b)The per share amounts and ratios reflect income and expenses assuming
inclusion of the Fund's proportionate share of the income and expenses of
the SR&F Cash Reserves Portfolio, prior to the merger.
(c)Per share data was calculated using average shares outstanding for the
period.
(d)Total return at net asset value assuming all distributions reinvested and no
contingent deferred sales charge.
(e)Had the Investment Advisor/Administrator, Distributor and/or Transfer Agent
not waived a portion of expenses, total return would have been reduced.
(f)Not annualized.
(g)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h)Annualized.
23
- --------------------------------------------------------------------------------
Columbia Money Market Fund
Selected data for a share outstanding throughout each period is as follows:
(Unaudited)
Six Months Year Period Period
Ended Ended Ended Ended
September 30, March 31, March 31, June 30,
Class Z Shares 2005 2005 2004 (a) 2003 (b)
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000
- --------------------------------------------------------------------------------------------------------------
Income from Investment Operations:
Net investment income (c) 0.013 0.010 0.002 0.006
- --------------------------------------------------------------------------------------------------------------
Less Distributions Declared to Shareholders:
From net investment income (0.013) (0.010) (0.002) (0.006)
- --------------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total return (d) 1.26%(e)(f) 1.01% 0.22%(e)(f) 0.55%(e)
- --------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets/Supplemental Data:
Expenses (g) 0.80%(h) 0.79% 0.88%(h) 0.89%(h)
Net investment income (g) 2.50%(h) 0.97% 0.27%(h) 0.61%(h)
Waiver/reimbursement 0.01% -- 0.04%(h) --
Net assets, end of period (000's) $193,240 $203,714 $248,324 $289,425
- --------------------------------------------------------------------------------------------------------------
(a)The Fund changed its fiscal year end from June 30 to March 31.
(b)Class Z shares were initially offered on July 29, 2002. Per share data and
total return reflect activity from that date.
(c)Per share data was calculated using average shares outstanding during the
period.
(d)Total return at net asset value assuming all distributions reinvested.
(e)Not annualized.
(f)Had the Investment Advisor/Administrator, Distributor and/or Transfer Agent
not waived a portion of expenses, total return would have been reduced.
(g)The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had an impact of less than 0.01%.
(h)Annualized.
24
IMPORTANT INFORMATION ABOUT THIS REPORT
--------------------------
Columbia Money Market Fund
Transfer Agent
Columbia Management Services, Inc.
P.O. Box 8081
Boston MA 02266-8081
800-345-6611
Distributor
Columbia Management Distributors, Inc.
One Financial Center
Boston MA 02111
Investment Advisor
Columbia Management Advisors, LLC 100 Federal Street
Boston MA 02110
The funds mail one shareholder report to each shareholder address. If you would
like more than one report, please call shareholder services at 800-345-6611 and
additional reports will be sent to you.
This report has been prepared for shareholders of Columbia Money Market Fund.
This report may also be used as sales literature when preceded or accompanied
by the current prospectus which provides details of sales charges, investment
objectives and operating policies of the funds and with the most recent copy of
the Columbia Funds Performance Update.
A description of the policies and procedures that the fund uses to determine
how to vote proxies relating to its portfolio securities 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 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, D.C. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
25
Columbia Management is the primary
investment management division of Bank of
America Corporation. Columbia Management
entities furnish investment management
services and advise institutional and mutual
fund portfolios. Columbia Management
Advisors, Inc. and Banc of America Capital
Management, LLC, both SEC registered
investment advisors and wholly owned
subsidiaries of Bank of America, N.A.,
merged on September 30, 2005. At that time,
the newly combined advisor changed its name
to Columbia Management Advisors, LLC
("CMA"). CMA will continue to operate as a
SEC registered investment advisor, wholly
owned subsidiary of Bank of America, N.A.
and part of Columbia Management.
[GRAPHIC APPEARS HERE]
eDelivery
Help your fund reduce printing and postage costs! Elect to get your shareholder
reports by electronic delivery. With Columbia's eDelivery program, you receive
an e-mail message when your shareholder report becomes available online. If your
fund account is registered with Columbia Funds, you can sign up quickly and
easily on our website at www.columbiafunds.com.
Please note -- if you own your fund shares through a financial institution,
contact the institution to see if it offers electronic delivery. If you own your
fund shares through a retirement plan, electronic delivery may not be available
to you.
Columbia Money Market Fund Semiannual Report, September 30, 2005
Columbia Management(R)
(C)2005 Columbia Management Distributors, Inc.
One Financial Center, Boston, MA 02111-2621
800.345.6611 www.columbiafunds.com
SHC-44/90892-0905 (11/05) 05/8397
Item 2. Code of Ethics.
Not applicable at this time.
Item 3. Audit Committee Financial Expert.
Not applicable at this time.
Item 4. Principal Accountant Fees and Services.
Not applicable at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. 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 the 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, have concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's 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: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) Columbia Funds Trust II
-----------------------------------------------
By (Signature and Title) /s/ Christopher L. Wilson
------------------------------------
Christopher L. Wilson, President
Date November 28, 2005
--------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Christopher L. Wilson
------------------------------------
Christopher L. Wilson, President
Date November 28, 2005
--------------------------------------------------------
By (Signature and Title) /s/ J. Kevin Connaughton
------------------------------------
J. Kevin Connaughton, Treasurer
Date November 28, 2005
--------------------------------------------------------