N-CSRS 1 file001.txt COLUMBIA ACORN TRUST 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 811-01829 --------------------- Columbia Acorn Trust ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) 227 West Monroe, Suite 3000, Chicago, Illinois 60606 ------------------------------------------------------------------------------ (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: December 31, 2004 ------------------ Date of reporting period: June 30, 2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. [LADY HOLDING FILE] COLUMBIA ACORN FUNDS SEMIANNUAL REPORT JUNE 30, 2004 Columbia Acorn Fund Columbia Acorn International Columbia Acorn USA Columbia Acorn International Select Columbia Acorn Select Columbia Thermostat Fund Look inside for the date and NEW LOCATION of the 2004 Columbia Acorn Funds Shareholder Information Meeting. Not FDIC May Lose Value Insured No Bank Guarantee PLEASE JOIN US FOR THE 2004 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING WHEN September 28, 2004 9:00 a.m. CST NEW MEETING LOCATION BANK OF AMERICA LASALLE ROOM, 21ST FLOOR 231 S. LASALLE STREET CHICAGO, IL 60604 REFRESHMENTS WILL BE SERVED. The Bank of America Building is bordered by LaSalle Street on the west, Clark Street on the east and Jackson Boulevard on the South. The building is easily accessible by public transportation and is near Chicago Metra stations. See the map below for the exact location. RSVP BY SEPTEMBER 21 PLEASE CALL US AT (800) 922-6769 BY SEPTEMBER 21 IF YOU PLAN TO ATTEND. To comply with security requirements, we must provide Bank of America building management with a list of guests attending the meeting. Calling to RSVP should prevent security delays at the door on the day of the event. TO ACCESS THE 21ST FLOOR MEETING ROOM, YOU MAY CHECK IN AT THE SECURITY DESK LOCATED ON THE LASALLE STREET SIDE OF THE BUILDING LOBBY. YOU WILL NEED TO PRESENT A VALID PICTURE ID (SUCH AS A DRIVER'S LICENSE) TO BUILDING SECURITY FOR ADMITTANCE TO THE MEETING FLOOR. We hope you will join us to meet your Columbia Acorn Funds' portfolio managers, analysts and your fellow shareholders. Presentations will offer market updates and provide in-depth information on your Columbia Acorn investments. A question and answer period will follow the presentations. [IMAGE OF LOCATION MAP] FOR DIRECTIONS AND PARKING INFORMATION, PLEASE SEE THE INSIDE BACK COVER OF THIS REPORT. Columbia Acorn Family of Funds Semiannual Report 2004 TABLE OF CONTENTS COLUMBIA ACORN FAMILY OF FUNDS Mid-Year Distributions 2 Net Asset Value Per Share 2 Share Class Performance 3 Fund Performance vs. Benchmarks 4 Squirrel Chatter: Why The Heck Should We Own Small-cap Stocks? 5 COLUMBIA ACORN FUND In a Nutshell 8 At a Glance 9 Major Portfolio Changes 20 Statement of Investments 23 COLUMBIA ACORN INTERNATIONAL In a Nutshell 10 At a Glance 11 Major Portfolio Changes 35 Statement of Investments 37 Portfolio Diversification 41 COLUMBIA ACORN USA In a Nutshell 12 At a Glance 13 Major Portfolio Changes 42 Statement of Investments 43 COLUMBIA ACORN INTERNATIONAL SELECT In a Nutshell 14 At a Glance 15 Major Portfolio Changes 48 Statement of Investments 49 Portfolio Diversification 51 COLUMBIA ACORN SELECT In a Nutshell 16 At a Glance 17 Major Portfolio Changes 52 Statement of Investments 53 COLUMBIA THERMOSTAT FUND In a Nutshell 18 At a Glance 19 Statement of Investments 73 Statement of Assets and Liabilities 74 Statement of Operations 75 Statement of Changes in Net Assets 76 Financial Highlights 78 Notes to Financial Statements 79 COLUMBIA ACORN FAMILY OF FUNDS Statements of Assets and Liabilities 56 Statements of Operations 57 Statements of Changes in Net Assets 58 Financial Highlights 62 Notes to Financial Statements 67 Change in Independent Registered Public Accounting Firm 83 Columbia Acorn Family of Funds Information 84 Board of Trustees and Management of Acorn 88 THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY CHANGE AT ANY TIME WITHOUT NOTICE AND THE PORTFOLIO MANAGERS MAY ALTER A FUND'S PORTFOLIO HOLDINGS BASED ON THESE VIEWS AND THE FUND'S CIRCUMSTANCES AT THAT TIME. 1 Columbia Acorn Family of Funds >MID-YEAR DISTRIBUTIONS The following table details the funds' mid-year distributions. The record date was June 2, 2004, and the payable date was June 3, 2004. Columbia Acorn USA and Columbia Acorn Select did not have any mid-year distributions.
LONG-TERM SHORT-TERM ORDINARY REINVESTMENT CAPITAL GAINS CAPITAL GAINS INCOME PRICE ------------------------------------------------------------------------------------------------------ Columbia Acorn Fund Class A $ 0.0283 None None $ 23.45 ------------------------------------------------------------------------------------------------------ Columbia Acorn Fund Class B and C $ 0.0283 None None $ 22.90 ------------------------------------------------------------------------------------------------------ Columbia Acorn International Class A None None $ 0.1546 $ 23.32 ------------------------------------------------------------------------------------------------------ Columbia Acorn International Class B None None $ 0.0399 $ 22.96 ------------------------------------------------------------------------------------------------------ Columbia Acorn International Class C None None $ 0.0399 $ 22.97 ------------------------------------------------------------------------------------------------------ Columbia Acorn International Select Class A None None $ 0.0278 $ 15.09 ------------------------------------------------------------------------------------------------------ Columbia Thermostat Fund Class A $ 0.0028 $ 0.0145 None $ 12.43 ------------------------------------------------------------------------------------------------------ Columbia Thermostat Fund Class B and Class C $ 0.0028 $ 0.0145 None $ 12.41 ------------------------------------------------------------------------------------------------------
>NET ASSET VALUE PER SHARE as of 6/30/04
COLUMBIA COLUMBIA ACORN COLUMBIA COLUMBIA ACORN COLUMBIA INTERNATIONAL COLUMBIA THERMOSTAT ACORN FUND INTERNATIONAL ACORN USA SELECT ACORN SELECT FUND ------------------------------------------------------------------------------------------------------------------- Class A $ 24.11 $ 24.20 $ 22.74 $ 15.50 $ 19.30 $ 12.61 ------------------------------------------------------------------------------------------------------------------- Class B $ 23.54 $ 23.81 $ 22.23 $ 15.12 $ 18.84 $ 12.58 ------------------------------------------------------------------------------------------------------------------- Class C $ 23.54 $ 23.82 $ 22.25 $ 15.15 $ 18.84 $ 12.58 -------------------------------------------------------------------------------------------------------------------
2 >SHARE CLASS PERFORMANCE Average Annual Total Returns through 6/30/04
CLASS A CLASS B CLASS C WITHOUT WITH WITHOUT WITH WITHOUT WITH SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE SALES CHARGE ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (10/16/2000) ---------------------------------------------------------------------------------------------------------------------------- 3 months* 1.51% -4.33% 1.29% -3.71% 1.33% 0.33% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 8.73% 2.48% 8.36% 3.36% 8.36% 7.36% ---------------------------------------------------------------------------------------------------------------------------- 1 year 35.21% 27.43% 34.27% 29.27% 34.27% 33.27% ---------------------------------------------------------------------------------------------------------------------------- 3 years 9.63% 7.49% 8.90% 8.05% 8.90% 8.90% ---------------------------------------------------------------------------------------------------------------------------- Life of fund 12.31% 10.53% 11.59% 10.99% 11.59% 11.59% ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (10/16/2000) ---------------------------------------------------------------------------------------------------------------------------- 3 months* 1.63% -4.21% 1.41% -3.59% 1.45% 0.45% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 8.51% 2.27% 8.07% 3.07% 8.17% 7.17% ---------------------------------------------------------------------------------------------------------------------------- 1 year 40.65% 32.56% 39.73% 34.73% 39.79% 38.79% ---------------------------------------------------------------------------------------------------------------------------- 3 years 6.76% 4.67% 6.03% 5.13% 6.06% 6.06% ---------------------------------------------------------------------------------------------------------------------------- Life of fund -0.17% -1.75% -0.82% -1.51% -0.81% -0.81% ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (10/16/2000) ---------------------------------------------------------------------------------------------------------------------------- 3 months* 4.55% -1.46% 4.32% -0.68% 4.36% 3.36% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 9.64% 3.34% 9.18% 4.18% 9.28% 8.28% ---------------------------------------------------------------------------------------------------------------------------- 1 year 34.00% 26.30% 33.03% 28.03% 33.15% 32.15% ---------------------------------------------------------------------------------------------------------------------------- 3 years 7.01% 4.92% 6.30% 5.41% 6.31% 6.31% ---------------------------------------------------------------------------------------------------------------------------- Life of fund 14.61% 12.79% 13.87% 13.30% 13.90% 13.90% ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (10/16/2000) ---------------------------------------------------------------------------------------------------------------------------- 3 months* 0.57% -5.21% 0.40% -4.60% 0.40% -0.60% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 7.46% 1.28% 7.08% 2.08% 7.14% 6.14% ---------------------------------------------------------------------------------------------------------------------------- 1 year 38.03% 30.09% 36.96% 31.96% 36.98% 35.98% ---------------------------------------------------------------------------------------------------------------------------- 3 years 4.65% 2.60% 3.93% 2.99% 3.97% 3.97% ---------------------------------------------------------------------------------------------------------------------------- Life of fund -3.31% -4.84% -4.00% -4.78% -3.95% -3.95% ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (10/16/2000) ---------------------------------------------------------------------------------------------------------------------------- 3 months* 1.79% -4.06% 1.62% -3.38% 1.62% 0.62% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 7.16% 1.00% 6.80% 1.80% 6.80% 5.80% ---------------------------------------------------------------------------------------------------------------------------- 1 year 19.81% 12.93% 19.03% 14.03% 19.03% 18.03% ---------------------------------------------------------------------------------------------------------------------------- 3 years 9.98% 7.83% 9.26% 8.41% 9.28% 9.28% ---------------------------------------------------------------------------------------------------------------------------- Life of fund 10.80% 9.05% 10.09% 9.46% 10.09% 10.09% ---------------------------------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (3/3/2003) ---------------------------------------------------------------------------------------------------------------------------- 3 months* -0.18% -5.92% -0.49% -5.46% -0.41% -1.41% ---------------------------------------------------------------------------------------------------------------------------- Year to date* 2.66% -3.24% 2.25% -2.75% 2.25% 1.25% ---------------------------------------------------------------------------------------------------------------------------- 1 year 12.58% 6.11% 11.77% 6.77% 11.77% 10.77% ---------------------------------------------------------------------------------------------------------------------------- Life of fund 19.18% 14.01% 18.30% 15.46% 18.30% 18.30% ----------------------------------------------------------------------------------------------------------------------------
*Not annualized. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. THE "WITH SALES CHARGE" RETURNS INCLUDE THE MAXIMUM 5.75% SALES CHARGE FOR CLASS A SHARES, THE APPROPRIATE CLASS B CONTINGENT DEFERRED SALES CHARGE FOR THE HOLDING PERIOD AFTER PURCHASE AS FOL- LOWS: THROUGH FIRST YEAR--5%, SECOND YEAR--4%, THIRD YEAR--3%, FOURTH YEAR--3%, FIFTH YEAR--2%, SIXTH YEAR--1%, THEREAFTER--0%; AND THE CLASS C CONTINGENT DEFERRED SALES CHARGE OF 1% FOR THE FIRST YEAR ONLY. PERFORMANCE OF THE DIFFERENT SHARE CLASSES WILL VARY BASED ON DIFFERENCES IN SALES CHARGES AND FEES ASSOCIATED WITH EACH CLASS. Performance results reflect any voluntary waivers or reimbursements of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimburse- ment arrangements, performance results would have been lower. 3 COLUMBIA ACORN FAMILY OF FUNDS >FUND PERFORMANCE VS. BENCHMARKS Class A Shares, without sales charge, Average Annual Total Returns through 6/30/04
2ND* YEAR TO* 1 3 LIFE QUARTER DATE YEAR YEARS OF FUND --------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (10/16/2000) 1.51% 8.73% 35.21% 9.63% 12.31% --------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -3.37% --------------------------------------------------------------------------------------- Russell 2500 0.34% 6.24% 32.21% 7.40% 7.97% --------------------------------------------------------------------------------------- Russell 2000 0.47% 6.76% 33.37% 6.24% 7.19% --------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 1.56% 7.76% 32.80% 7.22% 8.27% --------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 1.05% 5.51% 26.28% 4.34% 3.19% --------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (10/16/2000) 1.63% 8.51% 40.65% 6.76% -0.17% --------------------------------------------------------------------------------------- Citigroup EMI Global ex-US -0.24% 9.52% 44.13% 13.29% 8.18% --------------------------------------------------------------------------------------- MSCI EAFE 0.22% 4.56% 32.37% 3.87% -0.91% --------------------------------------------------------------------------------------- Lipper Int'l Small- Cap Funds Index 1.27% 11.16% 45.62% 12.44% 6.38% --------------------------------------------------------------------------------------- COLUMBIA ACORN USA (10/16/2000) 4.55% 9.64% 34.00% 7.01% 14.61% --------------------------------------------------------------------------------------- Russell 2000 0.47% 6.76% 33.37% 6.24% 7.19% --------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 1.56% 7.76% 32.80% 7.22% 8.27% --------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -3.37% --------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (10/16/2000) 0.57% 7.46% 38.03% 4.65% -3.31% --------------------------------------------------------------------------------------- Citigroup World ex-US Cap Range $2-10B -1.23% 7.29% 42.32% 10.36% 6.71% --------------------------------------------------------------------------------------- MSCI EAFE 0.22% 4.56% 32.37% 3.87% -0.91% --------------------------------------------------------------------------------------- Lipper International Funds Index -1.08% 3.86% 29.36% 3.93% -0.27% --------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (10/16/2000) 1.79% 7.16% 19.81% 9.98% 10.80% --------------------------------------------------------------------------------------- S&P MidCap 400 0.97% 6.08% 27.98% 6.58% 6.50% --------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 1.32% 5.28% 23.14% -2.76% -9.45% --------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -3.37% --------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (3/3/2003) -0.18% 2.66% 12.58% -- 19.18% --------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -- 27.84% --------------------------------------------------------------------------------------- Lehman U.S Credit Intermediate Bond Index -2.82% -0.08% 0.44% -- 3.50% --------------------------------------------------------------------------------------- Lehman U.S. Govt. Intermediate Bond Index -2.30% -0.15% -0.48% -- 0.91% --------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index -0.11% 2.25% 14.64% -- 21.23% ---------------------------------------------------------------------------------------
*Not annualized. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies, formed by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable capital of developed and emerging countries, selected by index sponsor, outside the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely recognized international benchmark that comprises 20 major markets in proportion to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE $2-$10B is a subset of the Broad Market Index, representing a mid-cap developed market index excluding the U.S. LIPPER INDEXES include the largest funds tracked by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S. small-cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX, 10 largest non-U.S. funds investing in small-cap companies, including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small-cap core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30 largest mutual funds within the Flexible Portfolio fund classification, as defined by Lipper. LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. All indexes are unmanaged and returns include reinvested distributions. A more complete description of each index is included in the Fund's statement of additional information. It is not possible to invest directly in an index. 4 >Squirrel Chatter: WHY THE HECK SHOULD WE OWN SMALL-CAP STOCKS? [Photo of Ralph Wanger] I often get asked the question, "Why own small caps rather than the great American blue chip companies?" My answer is that many of the so-called blue chip companies remind me of the Rolling Stones: Once great but 30 years past their prime. The rapid change and growth of the past 30 years created today's corporate behemoths. But that was then. The world has moved on and the environment is different. This creates a big problem for old giants as the market embraces new companies that are able to adapt to the world as it is now. The cycle of creation, growth, maturity and decline can be seen in all companies. One of the most successful companies for generations was Eastman Kodak. Today people are switching from film cameras to digital cameras so Kodak's expertise in making film is fast becoming obsolete. The company is trying desperately to figure out how to survive in today's world but it is likely to be a considerably smaller and less profitable company in the years to come. In the computer industry, IBM was once considered so dominant that the government brought an antitrust action against the company to keep it from completely dominating the world. Well, IBM does not dominate the world, but the antitrust settlement was not the reason for it. IBM had a lock on the mainframe computer market but PC networks rendered IBM's position irrelevant. IBM is still a big company but it is no longer dominant in the computer industry. We also see a great deal of American manufacturing moving overseas, especially to China. An example is Levi's, a famous brand that was synonymous with blue jeans. Today Levi's no longer manufactures, distributes or designs blue jeans anywhere. Levi's owns the brand and collects royalties but the rest of the business has been turned over to a Hong Kong company named Li & Fung. Li & Fung outsources the entire production process for Levi's jeans. This is not the first time foreign markets have encroached upon U.S. manufacturing. Twenty years ago we were worried about Japan. In area after area, Japanese companies were knocking off U.S. companies. Ford and General Motors were suddenly marginalized when Toyota came on the scene. General Motors has gone from the most powerful company in the United States to what we consider an unhealthy company with low profits and a poor balance sheet. Today, the Internet has created new businesses like Ebay, Expedia, and Amazon and put enormous pressure on old-line companies. Voice over Internet protocol is likely to do the same thing to the telephone industry that digital cameras did to Kodak. Free phone calls via the Internet is not the pricing model that big phone companies have in mind. The music industry has been severely hurt by file sharing online just as the post office and FedEx are losing market share to email. There is a great deal of innovation required to keep a business sound in today's technology-driven world. One business crushed by the Internet was Encyclopedia Britannica. Believe it or not, there was a time when research was conducted using books. Now, we Google. Few of us have a set of Encyclopedia Britannica at home today. Thirty years ago, we would have. Tornadoes blow away houses everyday that would have been safe if they only had three hundred pounds of encyclopedias ballasting the living room like we used to. Big companies not only have to manage technological change, but they have to do it in a world of union contracts that have seriously complicated their ability to change with the times. They must also continually adapt to political and regulatory changes. Sarbanes-Oxley requirements, for example, have increased accounting costs for companies. We think one of the next big battles already underway is with large pharmaceutical companies. It's fairly well known that you can buy prescription drugs cheaper in Canada than you can in the United States. Foreign countries have discovered that they can "free ride" on American-company drug prices because they don't have to pay for research and development (R&D). Some people are working to figure out how to increase the amount of drugs imported from Canada but it makes no sense to make a product in Indianapolis, ship it to Toronto, and then ship it back to Indianapolis. Government regulation may soon require that U.S. pharmaceutical companies price drugs sold in the U.S. market the same as those sent to foreign markets. Perhaps, if drug-company R&D is 5 retained, a subsidy will be issued by the government to cover that cost. If this happens, major drug companies will find their profits severely reduced. The drug industry, which was the center of institutional portfolios for the last 50 years because of steady, stable growth, may be less attractive over the next couple of decades. This sort of shift has happened before. Forty years ago electric utilities served as the stable growth base for institutional portfolios. I can remember having arguments with Duff and Phelps analysts about whether Commonwealth Edison would have a six-percent growth rate or a six-and-a-half-percent growth rate in the future. The distinction seemed to be makeable, reasonable and important. Today, electric utilities don't have long-term growth rates. They are highly cyclical businesses with profits that can be variable from one year to the next and are now considered anything but the base of a stable growth portfolio. While our funds don't own big pharmaceutical companies or big electric utilities, we think there will always be small companies that find ways to make money and grow as the old favorites peak and start to mature and decline. What kinds of things do the Columbia Acorn Funds look for in small-cap investing? We've found opportunities in the financial area. We believe regional banks and savings and loans have the potential to grow and prosper. Sometimes this occurs because they are in areas where giant banks haven't shown up yet. Here in Chicago, a few very large banks headquartered elsewhere dominate the city's banking industry. Still, some people prefer to bank at smaller local banks where they are treated more as a customer than an account number. Some of the smaller banks we own in our funds are Glacier Bancorp in Montana, Republic in Michigan, and Peoples Bank Bridgeport in Connecticut. These companies will often prosper on their own. If they are taken over by one of the big banks, the funds would make a profit that way. Specialty retail is also an interesting area for the small-cap investor. Retail is dominated by large shopping malls. If someone can formulate a new retail idea and prove it out with a half-dozen stores, it doesn't take very long to increase from five stores to 500 because malls always look for new hot concepts. Some of the companies we own that have done well are Christopher & Banks, Chico's FAS, Hot Topic, Cheesecake Factory and AFC Enterprises. An investor may want to look for companies that have very strong brands such as Procter & Gamble and Gillette. Don't make the mistake of thinking smaller companies lack recognizable brands. One of Columbia Acorn Fund's most successful stocks has been Harley-Davidson, the only brand that we can think of that people tattoo on their bodies. Coach, a top brand in leather goods, is another small-cap stock owned in the funds. We also own Scotts in lawn care; International Speedway in NASCAR racing; Carnival in cruise lines and Weight Watchers in weight watching. What we look for in all of these companies is what we call a "reason to own." We need to find a factor that we believe will give a company a reason to prosper over a long period of time. Our favorite theme under "reason to own" is Downstream from Technology. Making microchips is a very important business but when you get into the manufacturing of high-tech devices, it is notoriously competitive with very short product life cycles, a high degree of price competition and the profitability of these companies is often very short lived. It is hard to prosper in a business when you must cut prices 30% every year. We think it is better to own companies that are customers of these electronic companies. Getty Images is downstream from technology and one of our favorite stocks. The company sells photography over the Internet. They have 2.6 million photos that you can search for by subject and download at a moderate price. If you want to do an ad with a photo of a retired couple walking on the beach, buying one of Getty's pictures can save you the money and time required to create the same shot. Other downstream stocks that have done well for our funds include Zebra Technologies, a manufacturer of bar code printers, and International Game Technology (IGT). IGT has taken a low-priced, microprocessor and used it to create an electronic slot machine, capitalizing on the American people's willingness to spend about $30 an hour to play a fairly dull video game. This willingness also has created the modern gaming industry, which has spread into most states across the country. 6 1-800-922-6769 Not all technology is electronic. Nektar Therapeutics uses biotech and technology to generate inhaleable insulin to treat diabetes, one of the most serious health problems facing Americans. We believe anyone who can change insulin therapy from injections to some less objectionable form is likely to have a good business. Small growth companies may succeed because they grow in the niche areas between the giants. Of course, not all small companies work but when they do, there is potential for significant gains. Columbia Acorn Fund profits on stocks such as IGT and Harley-Davidson have been on the order of 100:1. A good idea, a hard-working entrepreneur, and long-term equity owners should continue to partner together to build winning companies in the future. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. ________________________________________________________________________________ THIS ESSAY WAS TAKEN FROM A SPEECH GIVEN BY RALPH WANGER AT THE THINKEQUITY CONFERENCE HELD IN CHICAGO ON JUNE 22, 2004. AS OF JUNE 30, 2004, FUND POSITIONS IN THE COMPANIES MENTIONED WERE: LI & FUNG: COLUMBIA ACORN FUND, 0.1%; COLUMBIA ACORN INTERNATIONAL SELECT FUND, 1.6%. GLACIER BANCORP: COLUMBIA ACORN FUND, 0.5%. REPUBLIC: COLUMBIA ACORN FUND, 0.2%. PEOPLES BANK BRIDGEPORT: COLUMBIA ACORN FUND, 0.8%. CHRISTOPHER & BANKS: COLUMBIA ACORN FUND, 0.5%; COLUMBIA ACORN USA, 0.8%. CHICO'S FAS: COLUMBIA ACORN FUND, 0.9%. HOT TOPIC: COLUMBIA ACORN FUND, 0.2%. CHEESECAKE FACTORY: COLUMBIA ACORN FUND, 0.1%. AFC ENTERPRISES: COLUMBIA ACORN FUND, 0.3%. HARLEY-DAVIDSON: COLUMBIA ACORN FUND, 0.9%; COLUMBIA ACORN SELECT, 6.3%. COACH: COLUMBIA ACORN FUND, 1.0%; COLUMBIA ACORN USA, 0.4%; COLUMBIA ACORN SELECT, 2.9%. SCOTTS COMPANY: COLUMBIA ACORN FUND, 0.5%; COLUMBIA ACORN USA, 1.4%. INTERNATIONAL SPEEDWAY MOTORS: COLUMBIA ACORN FUND, 0.3%; COLUMBIA ACORN USA, 0.6%; COLUMBIA ACORN SELECT, 2.3%. CARNIVAL: COLUMBIA ACORN FUND, 0.2%. WEIGHT WATCHERS: COLUMBIA ACORN FUND, 0.2%; COLUMBIA ACORN USA, 0.3%; COLUMBIA ACORN SELECT, 2.9%. GETTY IMAGES: COLUMBIA ACORN FUND, 0.6%; COLUMBIA ACORN USA, 0.8%. ZEBRA TECHNOLOGIES: COLUMBIA ACORN FUND, 0.3%; COLUMBIA ACORN USA, 1.9%. INTERNATIONAL GAME TECHNOLOGY: COLUMBIA ACORN FUND, 2.1%. NEKTAR THERAPEUTICS: COLUMBIA ACORN FUND, 0.2%; COLUMBIA ACORN USA, 0.9%. COMPANIES THAT WERE MENTIONED BUT NOT LISTED ABOVE WERE NOT HELD BY ANY OF THE COLUMBIA ACORN FUNDS AS OF JUNE 30, 2004. THE COMPANIES NAMED ARE FOR ILLUSTRATION PURPOSES ONLY AND ARE NOT INTENDED TO BE A RECOMMENDATION TO BUY OR SELL ANY STOCK. 7 Columbia Acorn Fund >In a Nutshell [Photo of Charles P. McQuaid] [Photo of Robert A. Mohn] Columbia Acorn Fund rose 1.51% (Class A shares, without sales charge) in the second quarter, somewhat more than its smaller cap benchmarks and in line with the large-cap S&P 500. In the first half of 2004, Columbia Acorn grew 8.73%, beating all of its benchmarks (see Page 4 for performance data). Performance for both periods was helped by our investments in energy. We also profited from good stock picking. On the advice of our energy analyst, Jason Selch, we had built energy to about 9% of the Fund--nearly twice the energy weighting of the Russell 2500 Index. Energy prices remained high, and both our large weighting and fine stock selection paid off. Quicksilver hit pay dirt, and was Columbia Acorn's largest percentage winner in both periods, rising about 73% in the quarter and doubling in the half. XTO Energy was the Fund's largest dollar winner year-to-date, gaining over $200 million for shareholders while rising 32%. Other energy successes included Western Gas and Ultra Petroleum, each up more than 24% in the quarter and 35% in the half. Other excellent stock picks included Rogers, a provider of electronic components, up on fine earnings. Retailer Urban Outfitters also jumped, as amazing sales increases drove earnings. Cell phone service provider Western Wireless benefited from growth overseas. Each of these stocks jumped at least 24% in the quarter and 57% in the half. Gaming stocks were volatile. International Game Technology was Columbia Acorn's largest dollar winner in the first quarter but its largest dollar loser in the second, despite making its growth targets. For the half, it rose 9%. We trimmed the stock due to valuation concerns, locking in fantastic gains. Alliance Gaming gained 30% in the first quarter, but dropped 47% in the second quarter on lower earnings expectations. Technology was tough year-to-date, as gains in hardware stocks were more than offset by drops in the Fund's software and service companies. After a 49% gain in the first quarter, Skillsoft Publishing retreated 41% on an order shortfall. Columbia Acorn's foreign stocks rose over 2% in the quarter and 10% in the half. Gambro, a leading worldwide dialysis provider, and Rhoen-Klinikum, a leading private hospital company in Germany, each rose more than 25% in the quarter. United Kingdom-based Tullow Oil gained 49% in the half. We've built the Fund's foreign stock position to 15% of assets, and plan to stay near this level since we believe foreign stocks appear attractive. Most of the Fund's companies are reporting what we consider good business conditions and excellent earnings gains. Macro economic concerns recently have kept a lid on stock prices. We hope that earnings gains will rule in the future. /s/ Charles P. McQuaid /s/ Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER DEMOGRAPHY IS DESTINY -------------------------------------------------------------------------------- The baby boomer population continues to provide investment opportunities. Baby boomers are aging worldwide and many are becoming obese. Age plus obesity has caused an epidemic of diabetes. This disease often causes kidney failure. Gambro, headquartered in Sweden, operates dialysis centers and sells renal products in many parts of the world. Columbia Wanger Asset Management analyst Stephen Kusmierczak concluded that Gambro was improving its cost structure and enhancing its sales mix. He saw through goodwill amortization charges and valued the stock based on free cash flow. When Stephen's research indicated that the market expectations concerning Medicare dialysis reimbursement may be unduly pessimistic, we added to Columbia Acorn Fund's position. Good research paid off as Gambro's stock rose 30% in the second quarter. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: QUICKSILVER, 0.3%; XTO ENERGY, 1.8%; WESTERN GAS, 0.7%; ULTRA PETROLEUM, 0.7%; ROGERS, 0.3%; URBAN OUTFITTERS, 0.4%; WESTERN WIRELESS, 0.7%; INTERNATIONAL GAME TECHNOLOGY, 2.1%; ALLIANCE GAMING, 0.4%; SKILLSOFT PUBLISHING, 0.6%; RHOEN-KLINIKUM, 0.2%; TULLOW OIL, 0.3%; GAMBRO, 0.2%. 8 1-800-922-6769 Columbia Acorn Fund TICKER SYMBOL: LACAX >At a Glance TOTAL NET ASSETS: $12,289.6 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE DATE* 1 YEAR 3 YEARS OF FUND ----- ------ ------- ------- Returns before NAV 8.73% 35.21% 9.63% 12.31% taxes POP 2.48 27.43 7.49 10.53 ------------------------------------------------------------------------- Returns after taxes NAV 8.72 35.16 9.59 11.48 on distributions POP 2.46 27.39 7.45 9.72 ------------------------------------------------------------------------- Returns after taxes NAV 5.70 22.94 8.28 10.28 on distributions and POP 1.64 17.88 6.42 8.72 sale of fund shares ------------------------------------------------------------------------- S&P 500 (pretax) 3.44 19.11 -0.69 -3.37 ------------------------------------------------------------------------- Russell 2500 (pretax) 6.24 32.21 7.40 7.97 ------------------------------------------------------------------------- Russell 2000 (pretax) 6.76 33.37 6.24 7.19 Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer 21.8% Goods/Services Industrial 13.5% Goods/Services Finance 12.3% Other* 6.7% Health Care 9.1% Energy/Minerals 9.1% Real Estate 2.6% Information 24.9% Software/Services 11.6% Computer Related Hardware 8.0% Media 2.1% Telecommunications 3.2% *Other includes cash and other assets less liabilities of 5.7%. Foreign equities within the portfolio were 15.0% diversified by country as follows: 9.0% Europe; 1.7% Asia without Japan; 2.0% Canada; 1.3% Japan; 0.5% Australia/New Zealand; 0.5% Latin America. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND >October 16, 2000 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The Russell 2500 is the smallest 2,500 U.S. companies taken from a group of the largest 3000 companies. The index is unmanaged and returns for the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $15,388 $15,026 $15,026 ------------------------------------------------ WITH SALES CHARGE $14,503 $14,726 $15,026 COLUMBIA COLUMBIA ACORN FUND - A ACORN FUND - A AT NAV WITH SALES CHARGE RUSSELL 2500 --------------- ----------------- ------------ 10/16/00 10000.00 9425.00 10000.00 10/31/00 10274.00 9683.25 10431.90 9733.59 9173.91 9513.81 12/31/00 10739.10 10121.60 10333.20 10932.40 10303.80 10672.80 10651.40 10039.00 9985.52 3/31/01 10164.60 9580.17 9437.70 11058.10 10422.30 10271.20 11527.00 10864.20 10580.10 6/30/01 11678.00 11006.50 10730.30 11449.10 10790.80 10346.60 10992.30 10360.20 10007.60 9/30/01 9495.12 8949.15 8712.50 9901.52 9332.18 9162.99 10656.00 10043.30 9904.06 12/31/01 11335.90 10684.00 10459.30 11221.40 10576.10 10329.40 11074.40 10437.60 10148.60 3/31/02 11882.80 11199.50 10850.20 11850.70 11169.30 10822.60 11488.10 10827.50 10505.40 6/30/02 10902.20 10275.30 9913.40 9602.65 9050.50 8730.34 9679.47 9122.90 8756.74 9/30/02 9099.67 8576.44 8062.97 9481.86 8936.65 8325.77 10093.40 9513.07 9005.47 12/31/02 9768.43 9206.75 8598.02 9533.01 8984.86 8369.56 9380.48 8841.10 8168.45 3/31/03 9494.92 8948.97 8246.32 10316.20 9723.05 8981.24 11042.50 10407.50 9864.53 6/30/03 11380.40 10726.00 10053.00 11908.50 11223.70 10593.40 12526.50 11806.20 11083.60 9/30/03 12379.90 11668.10 10932.80 13386.40 12616.70 11796.60 13820.10 13025.50 12240.70 12/31/03 14151.80 13338.10 12510.90 14661.30 13818.30 12967.40 14941.30 14082.20 13167.90 3/31/04 15158.00 14286.40 13247.00 14609.30 13769.20 12610.70 14870.80 14015.70 12868.10 6/30/04 15388.00 14503.20 13291.50 COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. International Game Technology 2.1% SLOT MACHINES & Progressive Jackpots 2. XTO Energy 1.8% NATURAL GAS PRODUCER 3. Expeditors International of Washington 1.1% INTERNATIONAL FREIGHT FORWARDER 4. Coach 1.0% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 5. AmeriCredit 0.9% AUTO LENDING 6. Chico's FAS 0.9% WOMEN'S SPECIALTY RETAILER 7. Harley-Davidson 0.9% MOTORCYCLES & RELATED MERCHANDISE 8. Peoples Bank Bridgeport 0.8% CONNECTICUT SAVINGS & Loan 9. TCF Financial 0.8% GREAT LAKES BANK 10. Novell 0.8% DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 9 COLUMBIA ACORN INTERNATIONAL >In a Nutshell [Photo of P. Zachary Egan] [Photo of Louis J. Mendes III] Columbia Acorn International finished the quarter up 1.63% (Class A shares, without sales charge), exceeding the Citigroup EMI Global ex-US benchmark decline of 0.24%. By posting a positive result in a flat market, the Fund gained back much of the ground lost relative to its benchmark in the first quarter. It is now up 8.51% year-to-date, trailing the benchmark return of 9.52%. The Fund also led the larger cap MSCI EAFE Index by 1.41% in the quarter and 3.95% year-to-date. Stock selection, as opposed to country or sector weightings, was the primary driver of performance in the second quarter. Winners included Kappa Create, a sushi restaurant chain in Japan, which was up 20% in the second quarter, after rising 31% in the first quarter. Geberit, a Swiss manufacturer of bathroom plumbing systems, was up 23% in the quarter and up 37% for the first half of the year. Energy prices remain high, which boosted profitability for many energy exploration and production companies. A holding in the United Kingdom, Tullow Oil, was up 23% in the quarter and nearly 49% for the six months. Rhoen-Klinikum, a private hospital operator in Germany and the Fund's second largest holding, also had a strong second quarter, rising 26%. The Fund's biggest loser in the second quarter was ASE Test, a semiconductor packaging and test services company, which was down 33% in the quarter and 51% in the year-to-date period on concerns that excess capacity in the semiconductor industry will weigh on profitability. Sales data for June, however, show an 88% increase over numbers reported this time last year. While the stock continues to exhibit volatility, we feel the fundamental investment case remains intact. Another laggard was Jardine Lloyd Thompson Group, an insurance broker in the United Kingdom, which was down over 20% for both the quarter and the first half. Wah Lee Industrial, a Taiwanese distributor of chemicals, materials and equipment, was down 15% for the quarter and 19% for the first half. We continued to increase the Fund's exposure to Japan in the quarter, largely in businesses geared to the domestic economy, such as consumer goods and services, and financials. We also built small positions in countries where the Fund had little or no exposure in recent years. In South Africa, the Fund now holds family clothing chain Edgars Consolidated Stores. In Brazil, Columbia Acorn International participated in the initial public offering of Natura Cosmeticos, a direct retailer of high-end skin care products. These investments reflect the Fund's continuous efforts to locate value wherever it may be. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER PROFITS IN THE WIND -------------------------------------------------------------------------------- Gamesa manufactures and services wind-driven turbines and develops and operates so-called "windfarms" for electric generation. Columbia Acorn International built a position in the company two and a half years ago when we believed there was considerable opportunity for the company to strengthen its balance sheet by selling some of its Spanish windfarms. We felt that freeing up cash through these asset sales would also allow the company to pursue higher return projects outside of Spain. This strategy was so successful that management was looking to return cash to shareholders within nine months of the Fund's initial investment, and the share price has almost tripled over the holding period. While originally an attempt to strengthen the financial position of the company, selling windfarms is now viewed by management as a sustainable, high-return business opportunity in itself. While some investors are skeptical about this strategic direction, we believe that Gamesa, as a leading equipment supplier with an intimate understanding of the planning and permit process, is indeed well-positioned to benefit as a windfarm developer. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: KAPPA CREATE, 0.8%; GEBERIT, 1.0%; TULLOW OIL, 1.2%; RHOEN-KLINIKUM, 1.9%; ASE TEST, 0.5%; JARDINE LLOYD THOMPSON GROUP, 0.7%; WAH LEE INDUSTRIAL, 0.4%; EDGARS CONSOLIDATED STORES, 0.3%; NATURA COSMETICOS, 0.5%; GAMESA, 0.7%. 10 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL >At a Glance TICKER SYMBOL: LAIAX TOTAL NET ASSETS: $1,728.2 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE DATE* 1 YEAR 3 YEARS OF FUND ----- ------ ------- ------- Returns before NAV 8.51% 40.65% 6.76% -0.17% taxes POP 2.27 32.56 4.67 -1.75 -------------------------------------------------------------------------------- Returns after taxes NAV 8.26 40.55 6.69 -1.00 on distributions POP 2.03 32.47 4.60 -2.57 -------------------------------------------------------------------------------- Returns after taxes NAV 5.53 26.63 5.77 -0.36 on distributions and POP 1.47 21.36 3.97 -1.69 sale of fund shares -------------------------------------------------------------------------------- Citigroup EMI Global 9.52 44.13 13.29 8.18 ex-US (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after- tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer 24.8% Goods/Services Finance 12.1% Other* 5.1% Information Technology 10.6% Health Care 8.5% Energy/Minerals 8.1% Transportation 3.0% Industrial 27.8% Goods/Services *Other includes cash and other assets less liabilities of 3.2%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL >October 16, 2000 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The Citigroup EMI Global ex-US is Citigroup's index of the bottom 20% of institutionally investable capital of developed and emerging countries, as selected by Citigroup, excluding the U.S. The index is unmanaged and returns for both the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $9,938 $9,698 $9,702 ------------------------------------------------ WITH SALES CHARGE $9,366 $9,449 $9,702 COLUMBIA ACORN COLUMBIA ACORN INTERNATIONAL - A INTERNATIONAL - A CITIGROUP EMI AT NAV WITH SALES CHARGE GLOBAL EX-US ---------------- ----------------- ------------ 10/16/00 10000.00 9425.00 10000.00 10/31/00 10153.00 9569.20 10000.00 9322.48 8786.44 9559.32 12/31/00 9513.60 8966.56 9932.93 9940.76 9369.16 10117.90 9222.04 8691.77 9724.76 3/31/01 8332.11 7853.02 8971.57 8651.23 8153.79 9558.77 8591.54 8097.53 9539.59 6/30/01 8167.12 7697.51 9215.96 7837.98 7387.30 8945.71 7675.74 7234.38 8921.10 9/30/01 6626.46 6245.44 7759.62 6939.23 6540.23 8074.91 7325.75 6904.52 8406.88 12/31/01 7459.81 7030.87 8476.11 7277.04 6858.61 8322.64 7252.30 6835.29 8461.93 3/31/02 7626.52 7187.99 9013.27 7874.38 7421.60 9200.94 7838.16 7387.47 9495.38 6/30/02 7516.79 7084.58 9125.04 6720.01 6333.61 8345.16 6610.48 6230.38 8295.11 9/30/02 6016.86 5670.89 7529.41 6045.14 5697.54 7699.57 6228.30 5870.18 7987.33 12/31/02 6232.66 5874.29 7892.24 6078.09 5728.60 7759.62 5911.55 5571.64 7621.16 3/31/03 5822.29 5487.51 7546.93 6350.95 5985.77 8258.41 6871.73 6476.61 8962.39 6/30/03 7066.20 6659.90 9296.87 7217.42 6802.42 9628.00 7535.71 7102.40 10088.40 9/30/03 7821.31 7371.58 10549.70 8417.29 7933.30 11317.00 8642.04 8145.12 11523.10 12/31/03 9160.56 8633.83 12234.60 9429.88 8887.66 12674.10 9780.67 9218.28 13111.20 3/31/04 9780.67 9218.28 13432.30 9564.52 9014.56 12981.10 9593.21 9041.60 12982.80 6/30/04 9937.81 9366.38 13389.00 COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 2.1% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Rhoen-Klinikum (Germany) 1.9% HOSPITAL MANAGEMENT 3. Neopost (France) 1.5% POSTAGE METERS 4. Exel (United Kingdom) 1.4% GLOBAL LOGISTICS & FREIGHT FORWARDING 5. Kerry Group (Ireland) 1.3% FOOD INGREDIENTS 6. Grafton Group (Ireland) 1.3% BUILDERS, WHOLESALERS & DIY Retailing 7. Talisman Energy (Canada) 1.3% OIL & GAS PRODUCER 8. Tullow Oil (United Kingdom) 1.2% OIL & GAS PRODUCER 9. Venture (Singapore) 1.2% ELECTRONIC CONTRACT MANUFACTURER 10. Daito Trust Construction 1.1% (JAPAN) APARTMENT BUILDER The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 11 COLUMBIA ACORN USA >In a Nutshell [Photo of Robert A. Mohn] Columbia Acorn USA strongly outperformed in the second quarter, up 4.55% (Class A shares, without sales charge) vs. a 0.47% gain for the Russell 2000. The Fund was also ahead year-to-date as of June 30, 2004, up 9.64% for the six months vs. a 6.76% gain for the Russell 2000. Good calls in the energy and telecom sectors contributed to the Fund's outperformance. Our energy analyst, Jason Selch, believed energy stock prices were lagging behind increases in oil prices. We added to the Fund's energy weighting at the beginning of the year and it paid off as the sector rallied in the first half of 2004. Quicksilver, a company that does coal seam gas drilling in the Midwest, was up more than 107% for the six months and 73% in the quarter. Western Gas, another coal seam gas producer, was up 38% year-to-date and up 28% for the quarter. We believe the Fund's outperformance in telecom was a testament to Columbia Wanger's niche stock-picking talent. While the telecom component of the Russell 2000 was the worst performing sector in the index (down 2% for the quarter), our telecom portion in Columbia Acorn USA was up 17%. We mentioned the growth of Western Wireless and Crown Castle International in our first quarter report. Both stocks showed continued strength in the second quarter. Western Wireless was up 24% in the quarter and had a six-month gain of over 57%. Crown Castle was up 17% for the quarter and 34% year-to-date. Regional phone company Commonwealth Telephone was another telecom winner. The stock was up 9% for the quarter and 19% year-to-date. Health care hurt performance. PPO network First Health was down 29% for the second quarter and off 20% year-to-date. Competitor pricing pressure dampened first quarter revenues. The company continued to generate a lot of cash--cash they have been using to buy back stock. We believe they are doing the right things in a tough environment. Par Pharmaceuticals, a generic drug manufacturer recently added to the Fund, missed its first quarter earnings and suffered from investor fears that the generics industry is becoming too competitive. We bought the stock because we like the way the company is run and expect recent R&D investments to begin paying off in 2005. Another new addition, Atherogenics, is developing a promising product to treat cardiovascular disease but investors fear unknowns that could come out in data to be released in the third quarter. We are willing to accept the risk if the payoff is high enough. In this case, we believe it could be. We have been tweaking our stock emphasis to try and capture market opportunities. In the financial sector, for example, we have shifted into banks that we believe may benefit if short rates rise. We're also trying to focus more on commercial banks over retail banks. In the health care sector, we believe there are opportunities in select companies that have not participated in the recent bull market. Short-term problems are making the outlook for these companies somewhat unclear but the fog could be masking sunny days ahead. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER ESCO'S TRIPLE PLAY -------------------------------------------------------------------------------- Esco Technologies manufactures filtration, communications and radio frequency shielding/testing equipment. Filtration is an attractive "razor blade" industry. Filters ("blades") generate higher profits than the original equipment ("razors") and generally have to be replaced on a regular basis, providing a predictable revenue stream. The communications segment's largest and highest growth product is its two-way automatic communications system. This system enables utilities to remotely read meters by transmitting data over existing electrical power lines and also allows for electrical grid load monitoring and control. The radio frequency shielding segment of Esco's business makes products that measure or contain electromagnetic emissions. This segment serves the health care, electronics and transportation industries and has a leading share of the market. For the first half of 2004, Esco's stock was up 22%. We like the company's long-term prospects given its future growth potential, strong cash flow, solid balance sheet and reasonable valuation. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: QUICKSILVER, 2.7%; WESTERN GAS, 1.2%; WESTERN WIRELESS, 3.5%; CROWN CASTLE INTERNATIONAL, 1.9%; COMMONWEALTH TELEPHONE, 1.9%; FIRST HEALTH, 1.5%; PAR PHARMACEUTICALS, 0.9%; ATHEROGENICS, 0.6%; ESCO TECHNOLOGIES, 2.0%. 12 1-800-922-6769 COLUMBIA ACORN USA >At a Glance TICKER SYMBOL: LAUAX TOTAL NET ASSETS: $767.9 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE OF DATE* 1 YEAR 3 YEARS FUND ----- ------ ------- ---- Returns before NAV 9.64% 34.00% 7.01% 14.61% taxes POP 3.34 26.30 4.92 12.79 -------------------------------------------------------------------------- Returns after taxes NAV 9.64 34.00 6.94 14.55 on distributions POP 3.34 26.30 4.85 12.73 -------------------------------------------------------------------------- Returns after taxes NAV 6.27 22.10 5.99 12.70 on distributions and POP 2.17 17.09 4.18 11.09 sale of fund shares -------------------------------------------------------------------------- Russell 2000 (pretax) 6.76 33.37 6.24 7.19 Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 Consumer 15.4% Goods/Services Health Care 15.1% Other* 8.8% Energy/Minerals 10.3% Finance 9.8% Industrial 6.7% Goods/Services Information 33.9% Software/Services 14.8% Telecommunications 9.1% Computer Related Hardware 6.7% Media 3.3% *Other includes cash and other assets less liabilities of 8.0%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA >October 16, 2000 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The Russell 2000 is a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $16,589 $16,198 $16,213 ------------------------------------------------ WITH SALES CHARGE $15,635 $15,898 $16,213 COLUMBIA ACORN COLUMBIA ACORN USA - A WITH USA - A AT NAV SALES CHARGE RUSSELL 2000 -------------- ------------ ------------ 10/16/00 10000.00 9425.00 10000.00 10/31/00 10412.00 9813.31 10363.90 9804.98 9241.19 9300.03 12/31/00 10759.00 10140.40 10098.70 11439.00 10781.20 10624.50 11402.40 10746.70 9927.40 3/31/01 11134.40 10494.20 9441.79 12479.50 11761.90 10180.40 13173.30 12415.80 10430.60 6/30/01 13534.30 12756.00 10790.80 13671.00 12884.90 10206.70 13288.20 12524.10 9877.05 9/30/01 11365.40 10711.90 8547.48 11393.80 10738.60 9047.68 12059.20 11365.80 9748.12 12/31/01 12764.60 12030.70 10349.80 12910.20 12167.80 10242.20 12464.80 11748.00 9961.45 3/31/02 13521.80 12744.30 10762.10 13719.20 12930.30 10860.20 12938.60 12194.60 10378.20 6/30/02 12158.40 11459.30 9863.22 10495.10 9891.64 8373.58 10334.50 9740.29 8352.25 9/30/02 9561.51 9011.72 7752.44 10013.80 9437.97 8001.00 10882.00 10256.20 8715.04 12/31/02 10342.20 9747.54 8229.80 10181.90 9596.45 8002.02 10036.30 9459.22 7760.24 3/31/03 10058.40 9480.03 7860.16 11043.10 10408.10 8605.44 12188.30 11487.50 9528.92 6/30/03 12378.40 11666.60 9701.36 12955.20 12210.30 10308.40 13662.60 12877.00 10781.00 9/30/03 13341.50 12574.40 10582.00 14705.00 13859.50 11470.60 15018.20 14154.70 11877.70 12/31/03 15127.90 14258.00 12118.70 15908.50 14993.80 12645.20 15981.70 15062.70 12758.50 3/31/04 15865.00 14952.80 12877.50 15471.50 14581.90 12220.90 16076.50 15152.10 12415.40 6/30/04 16588.60 15634.80 12938.30 COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Western Wireless 3.5% RURAL CELLULAR PHONE SERVICES 2. AmeriCredit 2.8% AUTO LENDING 3. Quicksilver 2.7% NATURAL GAS & COAL SEAM GAS PRODUCER 4. Edwards Lifesciences 2.6% HEART VALVES 5. ITT Educational Services 2.0% TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 6. Esco Technologies 2.0% FILTRATION & TEST EQUIPMENT 7. Commonwealth Telephone 1.9% RURAL PHONE FRANCHISES & CLEC 8. Crown Castle International 1.9% COMMUNICATION TOWERS IN USA & UK 9. Zebra Technologies 1.9% BAR CODE PRINTERS 10. HCC Insurance Holdings 1.9% AVIATION INSURANCE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 13 COLUMBIA ACORN INTERNATIONAL SELECT >In a Nutshell [Photo of Todd M. Narter] [Photo of Christopher J. Olson] Columbia Acorn International Select rose 0.57% (Class A shares, without sales charge) in the second quarter. By comparison, the Citigroup World ex-US Cap Range $2-10B Index was down 1.23%. In the first half of the year, the Fund was up 7.46%, outperforming the Citigroup World ex-US Cap Range $2-10B Index return of 7.29%. Big dollar winners for the quarter included Neopost, a French company that makes postage meters. The company was up 10% for the quarter and 18% for the half on solid results and continued growth. Talisman Energy, a Canadian oil and gas producer, was up 11% in the quarter and 15% for the six months due to higher oil prices and subsequent improvements in margins and profitability. Japan's Hoya, a maker of eyeglass lenses and opto-electrical components, finished the quarter up 8% and up 16% for the half. Jardine Lloyd Thompson Group in the United Kingdom was the Fund's biggest dollar loser this quarter. The company is an insurance broker offering marine, aviation, property and casualty insurance. Shares dropped 20% in the quarter due to the weaker dollar and the softer market for reinsurance this year. For the six months, shares are down over 20%. Despite the recent weakness in the stock price, management has continued to deliver good growth. With more than a 5% dividend yield, attractive valuation and strong management, we feel that the recent weakness may be overdone. Other laggards to performance included Venture, an electronic manufacturing services provider in Singapore, down 7% for the quarter and 9% for the six months. Sinotrans, a Chinese logistics provider, was down 12% in the quarter and 24% for the half year. USS Co., a Japanese used car auctioneer, was down 9% for the quarter but shares were up 7% for the six months. We sold the Fund's positions in both Sinotrans and USS Co. during the quarter. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER A BRAND YOU'VE NEVER -------------------------------------------------------------------------------- HEARD OF Funai Electric is a top-notch Japanese consumer electronics company and most people do not know that it owns such recognizable brands as Sylvania, Emerson and Symphonic. Funai Electric is a low-cost producer and has risen near the top in all of its major product lines. Globally it is the fourth largest maker of DVD players, second largest maker of VCR machines and the third largest maker of TV sets. Funai Electric has the best operating margins of any consumer electronics company in Japan but trades at a discount to its closest peers since its name is not well known. We believe the market is bound to take notice and we are hopeful that share price increases will follow. For the six months, the shares were up 8%. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: NEOPOST, 3.3%; TALISMAN ENERGY, 2.5%; HOYA, 2.9%; JARDINE LLOYD THOMPSON GROUP, 1.7%; VENTURE, 2.0%; SINOTRANS, 0.0%; USS CO., 0.0%; FUNAI ELECTRIC, 3.3%. 14 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL SELECT TICKER SYMBOL: LAFAX >At a Glance TOTAL NET ASSETS: $44.7 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE OF DATE* 1 YEAR 3 YEARS FUND ----- ------ ------- ------- Returns before NAV 7.46% 38.03% 4.65% -3.31% taxes POP 1.28 30.09 2.60 -4.84 ----------------------------------------------------------------------------- Returns after taxes NAV 7.39 38.12 4.67 -3.33 on distributions POP 1.22 30.18 2.62 -4.86 ----------------------------------------------------------------------------- Returns after taxes NAV 4.85 24.89 4.01 -2.79 on distributions and POP 0.83 19.72 2.25 -4.06 sale of fund shares ----------------------------------------------------------------------------- Citigroup World 7.29 42.32 10.36 6.71 ex-US Cap Range $2-10B (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer 24.0% Goods/Services Finance 16.6% Other* 4.8% Information Technology 10.3% Energy/Minerals 9.2% Health Care 7.6% Industrial 27.5% Goods/Services *Other includes cash and other assets less liabilities of 3.2%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT >October 16, 2000 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Citigroup World ex-US Cap Range $2-$10B is a subset of Citigroup's Broad Market Index, representing a mid-cap developed market index excluding the U.S. The index is unmanaged and returns for the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $8,824 $8,592 $8,610 ------------------------------------------------ WITH SALES CHARGE $8,317 $8,336 $8,610 COLUMBIA ACORN COLUMBIA ACORN INTERNATIONAL INTERNATIONAL CITIGROUP WORLD SELECT - A AT SELECT - A WITH EX-US CAP NAV SALES CHARGE RANGE $2-$10B ------------- ------------ ------------- 10/16/00 10000.00 9425.00 10000.00 10/31/00 10344.00 9749.22 10000.00 9023.07 8504.24 9702.13 12/31/00 9683.56 9126.76 10175.70 9994.40 9419.72 10125.20 8848.04 8339.28 9757.43 3/31/01 7662.41 7221.82 8996.21 8063.15 7599.52 9660.39 8040.57 7578.24 9577.79 6/30/01 7699.65 7256.92 9328.63 7296.19 6876.66 9094.53 7142.97 6732.25 9012.07 9/30/01 5937.95 5596.52 7965.33 6313.23 5950.22 8285.25 6659.83 6276.89 8581.37 12/31/01 6858.96 6464.57 8599.89 6506.41 6132.29 8345.99 6427.03 6057.47 8473.08 3/31/02 6654.54 6271.91 8957.79 6858.84 6464.46 9121.86 6926.74 6528.45 9411.67 6/30/02 6710.63 6324.77 9084.98 5989.23 5644.85 8271.31 6097.04 5746.46 8251.71 9/30/02 5653.79 5328.69 7513.39 5642.48 5318.04 7647.55 5779.03 5446.73 8036.96 12/31/02 5818.90 5484.31 7810.46 5534.94 5216.68 7614.45 5301.92 4997.06 7472.01 3/31/03 5347.51 5040.03 7344.39 5847.51 5511.28 7993.41 6353.32 5988.00 8566.64 6/30/03 6393.34 6025.73 8811.00 6495.64 6122.14 9164.69 6774.30 6384.78 9693.06 9/30/03 7024.27 6620.37 10092.50 7546.88 7112.93 10871.80 7706.12 7263.01 10963.20 12/31/03 8211.64 7739.47 11688.00 8359.45 7878.78 11933.70 8717.23 8215.99 12220.80 3/31/04 8773.89 8269.39 12696.00 8592.27 8098.22 12263.90 8598.29 8103.89 12229.90 6/30/04 8824.37 8316.97 12727.00 COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 5.7% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Exel (United Kingdom) 4.2% GLOBAL LOGISTICS & FREIGHT FORWARDING 3. BG Group (United Kingdom) 3.7% OIL & GAS PRODUCER 4. Neopost (France) 3.3% POSTAGE METERS 5. Funai Electric (Japan) 3.3% CONSUMER ELECTRONICS 6. Daito Trust Construction (Japan) 3.3% APARTMENT BUILDER 7. Den Norske Bank (Norway) 3.2% LARGEST NORWEGIAN BANK 8. Komercni Banka (Czech Republic) 3.0% LEADING CZECH UNIVERSAL BANK 9. Sugi Pharmacy (Japan) 3.0% DRUGSTORES 10. Hoya (Japan) 2.9% OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 15 COLUMBIA ACORN SELECT >In a Nutshell [Photo of Ben Andrews] Columbia Acorn Select increased 1.79% (Class A shares, without sales charge) for the quarter, outperforming the S&P MidCap 400's 0.97% gain and the S&P 500's 1.72% return. Year-to-date through June 30, 2004, Columbia Acorn Select is up 7.16% vs. a 6.08% gain for the S&P MidCap 400 and a 3.44% gain for the S&P 500. The quarter's winners included Expeditors International, Safeway and ITT Educational Services, all up between 22% and 25%. Each of these companies reported strong first quarter results and we are bullish on future outlooks. Year-to-date through June 30, the Fund's performance drivers were Harley-Davidson, ITT Educational Services, and Abercrombie and Fitch, which were each up between 31% to 60% and added a combined $35 million profit to the Fund's portfolio. The biggest loser during the quarter and the six months was First Health. Weak demand for the company's managed-care programs, coupled with enhanced nationwide PPO offerings by many of its competitors, sent the stock down 20% in the first half of the year. We believe that First Health's network and new program offerings have a competitive advantage and should help the company gain share in the corporate market. We added two new names to the Fund's portfolio during the quarter: Skillsoft Publishing, an Internet-delivered software training company, and Tellabs, a manufacturer of telecom hardware. During the last three years of dismal telecom capital spending, Tellabs made inroads into new markets, such as data switching and fiber to residential users, while preserving its dominant market share in digital transport. We believe that cable and telephone companies worldwide will push to offer value-added services to their customers and Tellabs will be a beneficiary. As your new portfolio manager (as of March 11, 2004), I would like to assure you that my sole focus is to continue to deliver competitive performance. I am backed by the same analyst team, following the same investment process, to pursue the same investment objective, as the previous manager. This investment process has existed within Columbia Acorn's family for more than three decades and I intend to honor the process. /s/ Ben Andrews Ben Andrews LEAD PORTFOLIO MANAGER FRESHENING THE BUSINESS -------------------------------------------------------------------------------- Once a darling of Wall Street, grocery retailer Safeway has fallen from grace. The culprits: botched acquisitions, elevated labor and health care costs and increased competition. These factors have reduced the company's stock price by 65% from its early 2001 peak, but there just might be light at the end of the tunnel. Management has begun to clean up the company's acquisitions. Two-tier wage contracts in many of its markets and workers compensation reforms in California will improve labor expenses over time. Marketing programs touting the stores' freshness and quality are starting to improve store sales. In time, we believe these results should improve sales and margins, which could lead to an increase in Safeway's stock price. COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: EXPEDITORS INTERNATIONAL, 3.1%; SAFEWAY, 3.8%; HARLEY-DAVIDSON, 6.3%; ITT EDUCATIONAL SERVICES, 4.8%; ABERCROMBIE AND FITCH, 3.4%; FIRST HEALTH, 4.3%; SKILLSOFT PUBLISHING, 1.6%; TELLABS, 3.0%. 16 1-800-922-6769 COLUMBIA ACORN SELECT >At a Glance TICKER SYMBOL: LTFAX TOTAL NET ASSETS: $989.0 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE OF DATE* 1 YEAR 3 YEARS FUND ----- ------ ------- ------- Returns before NAV 7.16% 19.81% 9.98% 10.80% taxes POP 1.00 12.93 7.83 9.05 ----------------------------------------------------------------------------- Returns after taxes NAV 7.16 19.69 9.93 10.68 on distributions POP 1.00 12.81 7.78 8.93 ----------------------------------------------------------------------------- Returns after taxes NAV 4.66 12.95 8.58 9.31 on distributions and POP 0.65 8.47 6.71 7.77 sale of fund shares ----------------------------------------------------------------------------- S&P MidCap 6.08 27.98 6.58 6.50 400 (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION > as a % of net assets, as of June 30, 2004 Consumer 32.8% Goods/Services Finance 13.5% Health Care 7.1% Industrial Goods/Services 3.1% Other* 9.5% Information 34.0% *Cash and other assets less liabilities. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT >October 16, 2000 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P MidCap 400 is a broad, market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. The index is unmanaged and returns for the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $14,636 $14,289 $14,289 ------------------------------------------------ WITH SALES CHARGE $13,794 $13,989 $14,289 COLUMBIA ACORN COLUMBIA ACORN SELECT - A AT SELECT - A WITH S&P NAV SALES CHARGE MIDCAP 400 -------------- --------------- ---------- 10/16/00 10000.00 9425.00 10000.00 10/31/00 10958.00 10327.90 10000.00 11/30/00 9893.98 9325.07 9245.17 12/31/00 10632.10 10020.70 9952.44 10940.40 10311.30 10174.10 10300.40 9708.11 9593.48 3/31/01 9893.52 9324.64 8880.22 10608.80 9998.81 9859.85 11188.10 10544.80 10089.50 6/30/01 11000.10 10367.60 10048.70 10894.50 10268.10 9899.05 10382.50 9785.47 9575.28 9/30/01 9742.90 9182.69 8384.23 9946.53 9374.60 8755.11 10978.00 10346.80 9406.40 12/31/01 11445.60 10787.50 9892.33 11219.00 10573.90 9840.95 10977.80 10346.60 9853.06 3/31/02 11355.50 10702.50 10557.40 10736.60 10119.20 10508.00 11038.30 10403.60 10330.80 6/30/02 10849.50 10225.70 9574.68 10162.80 9578.39 8647.22 10404.60 9806.35 8690.72 9/30/02 9921.85 9351.34 7990.55 10465.60 9863.79 8336.79 10985.70 10354.00 8819.12 12/31/02 10510.00 9905.69 8456.70 10464.80 9863.10 8209.56 10479.50 9876.91 8014.06 3/31/03 10691.20 10076.40 8081.61 11302.70 10652.80 8668.36 11906.30 11221.60 9386.74 6/30/03 12215.80 11513.40 9506.39 12797.30 12061.50 9843.70 13325.80 12559.60 10290.20 9/30/03 13031.30 12282.00 10132.70 13507.00 12730.30 10898.80 13401.60 12631.00 11278.50 12/31/03 13658.90 12873.50 11468.90 14030.50 13223.70 11717.40 14386.80 13559.60 11998.80 3/31/04 14379.60 13552.80 12049.70 13955.40 13153.00 11654.20 14182.90 13367.40 11896.00 6/30/04 14635.50 13794.00 12632.00 COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Harley-Davidson 6.3% MOTORCYCLES & RELATED MERCHANDISE 2. TCF Financial 5.8% GREAT LAKES BANK 3. McAfee 5.0% SECURITY SOFTWARE & SERVICES 4. ITT Educational Services 4.8% TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 5. First Health 4.3% PPO NETWORK 6. PeopleSoft 4.0% HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 7. Safeway 3.8% RETAIL FOOD & DRUG STORES 8. Interpublic Group 3.8% ADVERTISING 9. Synopsys 3.7% SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 10. Tektronix 3.4% ANALYTICAL INSTRUMENTS The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 17 COLUMBIA THERMOSTAT FUND >In a Nutshell [Photo of Ralph Wanger] [Photo of Charles P. McQuaid] Columbia Thermostat Fund was down 0.18% (Class A shares, without sales charge) for the quarter but ended the six months up 2.66%. These returns were in line with the Lipper Flexible Portfolio Funds Index. As expected, Fund performance was in between the S&P 500 and the Lehman Brothers U.S. Credit Intermediate Bond Index (see Page 4 for index results). The first six months of 2004 favored our small-, mid- and value-stock funds in the portfolio. Columbia Mid Cap Value Fund, Columbia Acorn Fund, and Columbia Acorn Select were each up over 7.40% for the six-month period. Overall, Thermostat's equity portfolio had a 4.61% return year-to-date and the fixed income piece was up 0.17%. During the second quarter, the equity portion of the portfolio had a 1.37% gain vs. a 2.27% drop on the income side. As noted in the table below, the Fund hit three reallocation triggers during the second quarter. We increased bond exposure in the portfolio in April and June and increased stock fund exposure in May. Assets in Columbia Thermostat Fund were just over $183 million at the end of the period. We believe this is a good result for a fund that is less than two years old. We are pleased with the steady inflows of money and appreciate your investment. We will continue to strive to keep Fund results at an even temperature despite ongoing market volatility. /s/ Ralph Wanger /s/ Charles P. McQuaid Ralph Wanger Charles P. McQuaid CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND Equities 2ND SIX-MONTH WEIGHTING QUARTER RETURNS TO FUND IN FUND RETURNS 6/30/04 ---------------------------------------------------- Columbia 20% 1.65% 8.99% Acorn Fund ---------------------------------------------------- Columbia 15% 1.93% 7.42% Acorn Select --------------------------------------------------- Columbia Growth 25% 1.01% -2.17% Stock Fund ---------------------------------------------------- Columbia Growth 25% 0.42% 4.26% & Income Fund ---------------------------------------------------- Columbia Mid Cap 15% 2.64% 7.86% Value Fund ---------------------------------------------------- WEIGHTED AVERAGE 100% 1.37%* 4.61%* ---------------------------------------------------- *WEIGHTED AVERAGE RETURN OF EQUITY FUNDS IN THE PORTFOLIO. Fixed Income 2ND SIX-MONTH WEIGHTING QUARTER RETURNS TO FUND IN FUND RETURNS 6/30/04 ---------------------------------------------------- Columbia Federal 30% -2.37% 0.11% Securities Fund ---------------------------------------------------- Columbia Intermediate 50% -2.35% 0.14% Bond Fund ---------------------------------------------------- Columbia High 20% -1.91% 0.32% Yield Fund ---------------------------------------------------- WEIGHTED AVERAGE 100% -2.27%* 0.17%* ---------------------------------------------------- *WEIGHTED AVERAGE RETURN FOR INCOME FUNDS IN THE PORTFOLIO. COLUMBIA THERMOSTAT FUND REBALANCING IN THE QUARTER ---------------------------------------------------- APRIL 22, 2004: 50% stock, 50% fixed income MAY 21, 2004: 55% stock, 45% fixed income JUNE 23, 2004: 50% stock, 50% fixed income THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL- AND MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN. 18 1-800-922-6769 COLUMBIA THERMOSTAT FUND >At a Glance TICKER SYMBOL: CTFAX TOTAL NET ASSETS: $183.4 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) >through June 30, 2004 YEAR TO LIFE OF DATE* 1 YEAR FUND ------- ------ ------- Returns before taxes NAV 2.66% 12.58% 19.18% POP -3.24 6.11 14.01 ---------------------------------------------------------------------------- Returns after taxes NAV 2.62 12.20 18.86 on distributions POP -3.28 5.75 13.70 ---------------------------------------------------------------------------- Returns after taxes NAV 1.74 8.23 16.21 on distributions and POP -2.10 4.02 11.78 sale of fund shares ---------------------------------------------------------------------------- S&P 500 (pretax) 3.44 19.11 27.84 ---------------------------------------------------------------------------- Lehman U.S. Credit Intermediate Bond -0.08 0.44 3.50 Index (pretax) ---------------------------------------------------------------------------- Lehman U.S. Govt. Intermediate Bond -0.15 -0.48 0.91 Index (pretax) ---------------------------------------------------------------------------- Lipper Flexible Portfolio 2.25 14.64 21.23 Funds Index (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Class A shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. PUBLIC OFFERING PRICE (POP) RETURNS INCLUDE THE MAXIMUM SALES CHARGE OF 5.75% FOR CLASS A SHARES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). *Year to date data not annualized. PORTFOLIO WEIGHTINGS >as a % of assets in each investment category, as of June 30, 2004 [PIE CHART] STOCK MUTUAL FUND Columbia Acorn Fund 20% Columbia Acorn Select 15% Columbia Growth Stock Fund 25% Columbia Growth & Income Fund 25% Columbia Mid Cap Value Fund 15% [PIE CHART] BOND MUTUAL FUNDS Columbia Federal Securities Fund 30% Columbia Intermediate Bond Fund 50% Columbia High Yield Fund 20% THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND >March 3, 2003 through June 30, 2004 Illustration is based on a hypothetical $10,000 investment from inception in Class A shares of the Fund, which includes the 5.75% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The Lehman U.S. Govt. Intermediate Bond Index is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The Lehman U.S. Credit Intermediate Bond Index is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. The indexes are unmanaged and returns for the indexes and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. [MOUNTAIN CHART] WITHOUT CLASS A CLASS B CLASS C SALES CHARGE $12,638 $12,514 $12,514 ------------------------------------------------ WITH SALES CHARGE $11,911 $12,114 $12,514
COLUMBIA THERMOSTAT LEHMAN U.S. CREDIT LEHMAN U.S. COLUMBIA THERMOSTAT FUND - A INTERMEDIATE BOND GOVT. INTERMEDIATE FUND - A AT NAV WITH SALES CHARGE S&P 500 INDEX BOND INDEX --------------- ----------------- --------- ------------------ ------------------ 3/3/03 10000.00 9425.00 10000.00 10000.00 10000.00 3/31/03 10089.00 9508.88 10097.10 10020.70 10002.10 10603.50 9993.84 10928.80 10158.30 10030.20 11078.60 10441.60 11504.60 10417.70 10187.70 6/30/03 11224.80 10579.40 11651.40 10423.30 10171.00 11284.30 10635.50 11856.80 10103.60 9923.81 11512.20 10850.30 12088.00 10134.20 9941.68 9/30/03 11482.30 10822.10 11959.70 10436.00 10157.20 11868.10 11185.70 12636.20 10343.10 10057.60 12007.00 11316.60 12747.40 10374.30 10058.50 12/31/03 12308.40 11600.60 13416.00 10477.20 10136.90 12478.20 11760.70 13662.20 10561.60 10191.90 12618.00 11892.40 13852.10 10678.60 10289.00 3/31/04 12658.30 11930.50 13643.10 10773.10 10360.60 12397.60 11684.70 13428.90 10498.20 10129.00 12437.20 11722.10 13613.20 10431.60 10096.60 6/30/04 12637.90 11911.20 13877.90 10469.20 10121.90
COLUMBIA THERMOSTAT FUND ASSET ALLOCATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Stock Mutual Funds 49.7% Bond Mutual Funds 49.8% Cash and Other Assets Less Liabilities 0.5% 19 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION American Tower 1,500,000 1,750,000 ASE Test (Taiwan) 780,000 1,380,000 Autobytel 0 500,000 Bearing Point 3,100,000 3,350,000 Ceridian 0 1,000,000 Concurrent Computer 2,325,000 4,656,000 Crown Castle International 3,500,000 4,000,000 E.Piphany 5,700,000 6,700,000 Entravision Communications 301,000 1,000,000 Fair Isaac 0 530,000 Gestevis Telecino 0 75,000 Igate Capital 4,550,000 4,656,000 Insight Communications 1,700,000 2,700,000 Integrated Circuit Systems 1,195,000 1,315,000 Jabil Circuit 1,420,000 1,500,000 Liberty Media International 0 131,000 Novell 11,000,000 11,500,000 Pegasus Systems 1,125,000 1,250,000 Plexus 1,300,000 1,600,000 Radiant Systems 1,500,000 1,575,000 Semtech 800,000 850,000 SES Global (Luxembourg) 1,337,000 2,537,000 Shuffle Master 827,000 940,000 Tellabs 5,700,000 8,700,000 ValueClick 1,954,000 2,000,000 Venture (Singapore) 2,710,000 3,150,000 Western Wireless 2,800,000 3,000,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Alliance Gaming 2,010,000 2,750,000 Ann Taylor 795,000 863,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Brookstone 130,500 600,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Callaway Golf 0 500,000 Carter's 53,000 369,000 Columbia Sportswear 200,000 400,000 Global Bio-Chem Technology Group (China) 14,730,000 30,000,000 Global Bio-Chem Technology Group (Warrants) (China) 0 1,841,250 HNI 0 1,600,000 Masonite International (Canada) 440,000 550,000 Natura Cosmeticos (Brazil) 0 500,000 NBTY 0 850,000 Orbitz 0 750,000 Otsuke Kagu (Japan) 0 210,000 Pacific Brands (Australia) 0 5,000,000 Rank Group (United Kingdom) 0 230,700 RC2 425,000 545,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES (CONTINUED) Sports Authority 0 773,000 Wacoal (Japan) 0 1,100,000 West Marine 0 823,000 Williams-Sonoma 607,000 1,400,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industrie (Netherlands) 720,000 737,560 Aviall 300,000 600,000 Dominion Homes 0 290,000 Exel (United Kingdom) 1,800,000 2,600,000 Genlyte Group 0 300,000 Jaako Poyry (Finland) 0 185,000 Sika (Switzerland) 0 25,000 Tenaris (Argentina) 605,000 750,000 United Services Group (Netherlands) 420,000 640,000 Vallourec (France) 66,000 95,000 Watts Water Technologies 543,000 554,000 Wienerberger (Austria) 700,000 787,500 ---------------------------------------------------------------------------- FINANCE Bank of the Ozarks 0 231,000 BOK Financial 1,524,000 1,638,000 CityBank Lynnwood 267,000 360,000 Credito Emiliano (Italy) 0 210,000 Cullen Frost Bankers 108,000 370,000 First Mutual Bancshares 76,000 125,000 Glacier Bancorp 1,917,500 2,187,000 (INCLUDES THE EFFECT OF A 5 FOR 4 STOCK SPLIT) Great Southern Bancorp 348,000 455,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Imperial Thrift & Loan 0 74,000 Jardine Lloyd Thompson (United Kingdom) 1,000,000 1,992,000 Komercni Banka (Czech Republic) 0 145,000 Northgate (United Kingdom) 0 784,000 Stewart Information Services 0 245,000 Texas Regional Bancshares 1,015,000 1,300,000 West Coast Bancorp 1,045,000 1,320,000 20 1-800-922-6769 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS (CONTINUED) ---------------------------------------------------------------------------- HEALTH CARE Accredo Health 0 450,000 Atherogenics 389,000 789,000 Bioveris 1,000,000 1,150,000 DOV Pharmaceuticals 0 1,165,000 Hogy Medical (Japan) 0 190,000 La Jolla Pharmaceutical 0 3,500,000 Lexicon Genetics 0 1,876,000 Ligand Pharmaceuticals 0 1,250,000 Myriad Genetics 160,000 460,000 Neurocrine Biosciences 0 360,000 NPS Pharmaceuticals 426,000 776,000 OPG Groep (Netherlands) 420,000 510,000 Par Pharmaceuticals 0 775,000 Pozen 0 1,709,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Chicago Bridge & Iron 428,000 700,000 Clayton Williams Energy 0 400,000 Clayton Williams Energy -- 40,000 Esprit Exploration (Canada) 0 3,458,200 FMC Technologies 1,900,000 2,300,000 Fugro (Netherlands) 250,000 333,000 Gamesa (Spain) 570,000 1,470,000 McMoRan Exploration 875,000 915,000 Nexen (Canada) 800,000 925,000 Noranda (Canada) 500,000 700,000 Range Resources 0 916,000 Tullow Oil (United Kingdom) 10,000,000 15,400,000 Western Gas 2,600,000 2,800,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) ---------------------------------------------------------------------------- OTHER INDUSTRIES Diamondrock Hospitality 0 1,000,000 Highland Hospitality 440,000 1,240,000 Northeast Utilities 1,350,000 1,650,000 Sponda (Finland) 875,000 1,352,600 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- INFORMATION Agilysys 1,410,000 710,000 Alliance Atlantis Communication (Canada) 750,000 500,000 American Management Systems 58,000 0 Aspect Communications 3,959,000 3,550,000 Avid Technology 1,800,000 1,600,000 Ciber 3,319,000 3,100,000 COMARCO 533,000 300,000 Commonwealth Telephone 900,000 800,000 Dionex 836,000 536,000 DoubleClick 2,000,000 1,400,000 Euronet Worldwide 406,000 286,000 Euronext (France) 725,000 0 Global Payments 1,487,000 1,457,000 Hit Entertainment (United Kingdom) 2,750,000 0 International Game Technology 8,768,000 6,700,000 Kronos 1,900,000 1,625,000 Neopost (France) 431,900 371,900 Perot Systems 900,000 205,000 RH Donnelley 150,000 119,000 RSA Security 2,500,000 2,200,000 Salem Communications 850,000 770,000 Skillsoft Publishing 9,800,000 9,500,000 Tech Data 780,000 680,000 TVB (Hong Kong) 3,300,000 224,700 Varian 668,000 428,000 Witness Systems 1,660,000 1,500,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Borders Group 1,400,000 1,300,000 Furniture Brands International 510,000 0 Helen of Troy 2,200,000 1,381,000 Hon Industries 1,455,000 0 Jones Apparel 418,000 0 SCP Pool 1,511,000 1,326,000 Shimano (Japan) 800,000 644,100 USS (Japan) 260,000 135,000 Whole Foods Market 500,000 350,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Expeditors International of Washington 2,900,000 2,750,000 G&K Services 725,000 550,000 Hub Group 759,000 549,000 Insituform Technologies 500,000 0 Labor Ready 1,900,000 1,800,000 Munters (Sweden) 590,000 0 Northwest Pipe Company 120,000 0 21 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED), CONTINUED NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES (CONTINUED) ---------------------------------------------------------------------------- FINANCE Harleysville Group 200,000 0 Irish Life & Permanent (Ireland) 1,000,000 959,400 Republic 1,798,000 1,698,000 ---------------------------------------------------------------------------- HEALTH CARE Aclara Biosciences 1,982,000 0 Applera Celera Genomics 900,000 0 Enzon 1,665,000 0 Gene Logic 210,000 0 Guilford Pharmaceuticals 316,000 0 Incyte Genomics 320,000 0 Kinetic Concepts 276,000 0 Nektar Therapeutics 2,055,000 1,055,000 Novoste 1,273,000 0 Patheon (Canada) 422,000 0 Pharmacyclics 528,000 0 ---------------------------------------------------------------------------- ENERGY/MINERALS Aquila 1,270,000 0 Evergreen Resources 1,460,000 0 Quicksilver 600,000 465,000 Westport Resources 517,000 0 XTO Energy 7,875,000 7,275,000 ---------------------------------------------------------------------------- OTHER INDUSTRIES Airports of Thailand (Thailand) 1,250,600 0 Chelsea Properties Group 400,000 0 Federal Realty Investment Trust 690,000 575,000 General Growth Properties 1,845,000 1,320,000 LNR Property 80,000 0 Macerich Company 800,000 635,000 Mills 725,000 620,000 Red Electrica (Spain) 899,800 799,800 The Rouse Company 1,160,000 825,000 Security Capital European Realty (Luxembourg) 299,275 194,827 Unisource Energy 800,000 0 22 1-800-922-6769 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- SECURITIES: 94.3% ---------------------------------------------------------------------------- INFORMATION: 24.9% SOFTWARE/SERVICES >BUSINESS SOFTWARE: 5.6% 11,500,000 Novell (b) $ 96,485 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 1,600,000 Avid Technology (b)(c) 87,312 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 1,625,000 Kronos (b)(c) 66,950 LABOR MANAGEMENT SOLUTIONS 3,450,000 PeopleSoft (b) 63,825 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 3,550,000 Aspect Communications (b) 50,410 CALL CENTER SOFTWARE 950,000 Micros Systems (b)(c) 45,571 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 1,875,000 McAfee (b) 33,994 SECURITY SOFTWARE & SERVICES 6,700,000 E.Piphany (b)(c) 32,361 CRM SOFTWARE 2,200,000 JDA Software Group (b)(c) 28,974 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 2,035,000 MRO Software (b)(c) 27,696 ENTERPRISE MAINTENANCE SOFTWARE 1,521,000 Sybase (b) 27,378 DATABASE SOFTWARE 6,000,000 Actuate (b)(c) 23,700 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 2,200,000 MAPICS (b)(c) 23,232 MID MARKET ERP SOFTWARE 3,000,000 Lawson Software (b) 21,240 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 1,500,000 Witness Systems (b)(c) 18,225 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 5,600,000 Indus International (b)(c) 11,760 ENTERPRISE ASSET MANAGEMENT SOFTWARE 500,000 SPSS (b) 8,985 STATISTICAL/BUSINESS ANALYSIS SOFTWARE 1,575,000 Radiant Systems (b)(c) 7,387 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 750,000 Netegrity (b) 6,345 ENTERPRISE SECURITY SOFTWARE 3,300,000 BSQUARE (b)(c) 3,300 SOFTWARE TO HELP DESIGN MOBILE DEVICES 1,250,000 ClickSoftware Technologies (b) 2,875 SERVICE CHAIN OPTIMIZATION SOFTWARE 70,000 Group 1 Software (b) 1,606 ADDRESS VERIFICATION SOFTWARE ---------------------------------------------------------------------------- 689,611 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.7% 1,200,000 Getty Images (b) 72,000 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,336,000 Navigant Consulting (b) 28,644 CONSULTING FIRM NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 2,685,000 InfoUSA (b)(c) $ 27,226 BUSINESS DATA FOR SALES LEADS 1,000,000 Ceridian (b) 22,500 HR SERVICES & PAYMENT PROCESSING 530,000 Fair Isaac 17,691 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 600,000 Information Holdings (b) 16,422 PATENT & OTHER BUSINESS INFORMATION 950,000 Administaff (b) 15,770 PROFESSIONAL EMPLOYER ORGANIZATION 119,000 RH Donnelley (b) 5,205 YELLOW PAGES PUBLISHER 1,700,000 PRIMEDIA (b) 4,726 SPECIALTY MAGAZINES & OTHER PUBLICATIONS ---------------------------------------------------------------------------- 210,184 >INTERNET: 1.3% 9,500,000 Skillsoft Publishing (b)(c) 72,200 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,200,000 RSA Security (b) 45,034 ENTERPRISE SECURITY SOFTWARE 2,000,000 ValueClick (b) 23,960 INTERNET ADVERTISING 1,400,000 DoubleClick (b) 10,878 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 500,000 Autobytel (b) 4,540 AUTO WEBSITES FOR SALES LEADS & ADVERTISING 1,879,808 Vital Stream, Cl. C (b)(c) 1,410 STREAMING SERVICES FOR THE INTERNET 250,000 NeoPlanet, Series A (d) 51 53,376 NeoPlanet, Series B (d) 18 WEB BROWSER ---------------------------------------------------------------------------- 158,091 >TRANSACTION PROCESSORS: 1.0% 1,457,000 Global Payments 65,594 CREDIT CARD PROCESSOR 1,250,000 Pegasus Systems (b)(c) 16,413 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 600,000 Cubic 12,558 REVENUE COLLECTION & DEFENSE SYSTEMS 5,000,000 Hong Kong Exchanges & Clearing (Hong Kong) 10,308 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 175,000 Deutsche Boerse (Germany) 8,910 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 286,000 Euronet Worldwide (b) 6,615 ATM PROCESSOR ---------------------------------------------------------------------------- 120,398 >COMPUTER SERVICES: 0.9% 3,350,000 Bearing Point (b) 29,714 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 4,600,000 AnswerThink Consulting (b)(c) 26,358 IT INTEGRATOR FOR FORTUNE 2000 3,100,000 Ciber (b)(c) 25,482 SOFTWARE SERVICES & STAFFING 4,656,000 Igate Capital (b)(c) 18,531 TECHNOLOGY STAFFING SERVICES 23 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >COMPUTER SERVICES--CONTINUED 2,300,000 Analysts International (b)(c) $ 7,084 TECHNOLOGY STAFFING SERVICES 1,025,000 New Horizons Worldwide (b)(c) 6,150 COMPUTER TRAINING SERVICES 205,000 Perot Systems (b) 2,720 BUSINESS CONSULTING & TECHNOLOGY STRATEGY ---------------------------------------------------------------------------- 116,039 >ELECTRONICS DISTRIBUTION: 0.6% 1,695,000 Avnet (b) 38,476 ELECTRONIC COMPONENTS DISTRIBUTION 680,000 Tech Data (b) 26,608 I/T DISTRIBUTOR 710,000 Agilysys 9,791 I/T DISTRIBUTOR ---------------------------------------------------------------------------- 74,875 >CONSUMER SOFTWARE: 0.5% 1,400,000 THQ (b) 32,060 ENTERTAINMENT SOFTWARE 1,125,000 Activision (b) 17,887 ENTERTAINMENT SOFTWARE 2,000,000 Pinnacle Systems (b) 14,300 VIDEO EDITING SOFTWARE & HARDWARE ---------------------------------------------------------------------------- 64,247 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.5% 494,000 Zebra Technologies (b) 42,978 BAR CODE PRINTERS 2,500,000 Seachange International (b)(c) 42,200 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 1,060,000 Avocent (b) 38,944 COMPUTER CONTROL SWITCHES 445,000 Rogers (b) 31,106 PCB LAMINATES & HIGH PERFORMANCE FOAMS 1,525,000 Unova (b) 30,881 BARCODE & WIRELESS LAN SYSTEMS 371,900 Neopost (France) 22,008 POSTAGE METERS 625,000 Excel Technologies (b)(c) 20,781 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 2,900,000 3Com (b) 18,125 NETWORKING EQUIPMENT 1,575,000 Cable Design Technologies (b)(c) 16,695 NETWORKING & SPECIALTY CABLES 535,000 II VI (b) 16,403 LASER COMPONENTS 1,350,000 CTS 16,281 ELECTRONIC COMPONENTS, SENSORS & EMS 4,656,000 Concurrent Computer (b)(c) 9,219 VIDEO ON DEMAND SYSTEMS & SERVICES 230,000 Applied Films (b) 6,675 THIN-FILM GLASS COATING EQUIPMENT 351,000 Phoenixtec Power (Taiwan) 346 UNINTERRUPTIBLE POWER SUPPLIES ---------------------------------------------------------------------------- 312,642 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >GAMING EQUIPMENT: 2.4% 6,700,000 International Game Technology $ 258,620 SLOT MACHINES & PROGRESSIVE JACKPOTS 940,000 Shuffle Master (b) 34,131 CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES ---------------------------------------------------------------------------- 292,751 >INSTRUMENTATION: 1.2% 810,000 Mettler Toledo (b) 39,803 LABORATORY EQUIPMENT 1,350,000 Trimble Navigation (b) 37,517 GPS-BASED INSTRUMENTS 536,000 Dionex (b) 29,571 ION & LIQUID CHROMATOGRAPHY 2,300,000 Spectris (United Kingdom) 20,859 ELECTRONIC INSTRUMENTATION & CONTROLS 428,000 Varian (b) 18,040 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- 145,790 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.1% 1,315,000 Integrated Circuit Systems (b) 35,715 SILICON TIMING DEVICES 685,000 Littelfuse (b) 29,051 LITTLE FUSES 850,000 Semtech (b) 20,009 ANALOG SEMICONDUCTORS 1,380,000 Ase Test (Taiwan) (b) 10,171 SEMICONDUCTOR PACKAGING & TEST SERVICES 1,250,000 IXYS (b) 9,850 POWER SEMICONDUCTORS 565,000 Supertex (b) 9,232 MIXED-SIGNAL SEMICONDUCTORS 664,000 Asyst Technologies (b) 6,866 SEMICONDUCTOR FAB AUTOMATION EQUIPMENT 361,000 Actel (b) 6,678 FIELD PROGRAMMABLE GATE ARRAYS 604,000 Pericom Semiconductor (b) 6,469 SEMICONDUCTORS - INTERFACE INTEGRATED CIRCUITS ---------------------------------------------------------------------------- 134,041 >CONTRACT MANUFACTURING: 0.8% 1,500,000 Jabil Circuit (b) 37,770 ELECTRONIC MANUFACTURING SERVICES 3,150,000 Venture (Singapore) 33,115 ELECTRONIC CONTRACT MANUFACTURER 1,600,000 Plexus (b) 21,600 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- 92,485 TELECOMMUNICATIONS >MOBILE COMMUNICATIONS: 1.7% 3,000,000 Western Wireless (b) 86,730 RURAL CELLULAR PHONE SERVICES 4,000,000 Crown Castle International (b) 59,000 COMMUNICATION TOWERS IN USA & UK 520,000 Telephone & Data Systems 37,024 CELLULAR & TELEPHONE SERVICES 1,750,000 American Tower (b) 26,600 COMMUNICATION TOWERS IN USA & MEXICO 24 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >MOBILE COMMUNICATIONS--CONTINUED 300,000 COMARCO (b) $ 2,115 WIRELESS NETWORK TESTING ---------------------------------------------------------------------------- 211,469 >TELECOMMUNICATION EQUIPMENT: 1.2% 8,700,000 Tellabs (b) 76,038 TELECOMMUNICATIONS & CABLE EQUIPMENT 830,000 Plantronics (b) 34,943 COMMUNICATION HEADSETS 1,600,000 Andrew (b) 32,016 WIRELESS INFRASTRUCTURE EQUIPMENT 1,200,000 Symmetricom (b) 10,680 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- 153,677 >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3% 800,000 Commonwealth Telephone (b) 35,816 RURAL PHONE FRANCHISES & CLEC ---------------------------------------------------------------------------- MEDIA >TELEVISION PROGRAMMING/CATV: 1.0% 2,700,000 Insight Communications (b)(c) 25,002 CATV FRANCHISES IN MIDWEST 2,605,000 Liberty Media (b) 23,419 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 1,150,000 Corus Entertainment (Canada) 22,297 TELEVISION PROGRAMMING & RADIO STATIONS 2,500,000 Mediacom Communications (b) 19,550 CABLE TELEVISION FRANCHISES 2,379,000 United Global Com (b) 17,272 VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA 500,000 Alliance Atlantis Communication (Canada) (b) 9,317 CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION 131,000 Liberty Media International (b) 4,860 CATV HOLDING COMPANY ---------------------------------------------------------------------------- 121,717 >RADIO BROADCASTING: 0.6% 770,000 Salem Communications (b) 20,890 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 1,200,000 Cumulus Media, Cl. A (b) 20,172 RADIO STATIONS IN SMALL CITIES 992,000 Saga Communications (b)(c) 18,104 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,200,000 Spanish Broadcasting (b) 11,172 SPANISH LANGUAGE RADIO STATIONS ---------------------------------------------------------------------------- 70,338 >TV/SATELLITE BROADCASTING: 0.5% 2,537,000 SES Global (Luxembourg) 21,447 SATELLITE BROADCASTING SERVICES 1,400,000 Gray Television 19,446 MID MARKET AFFILIATED TV STATIONS 1,000,000 Entravision Communications (b) 7,680 SPANISH LANGUAGE TV, RADIO & OUTDOOR 270,000 Metropole TV (France) 7,633 TELEVISION BROADCASTER 200,000 Young Broadcasting (b) 2,630 TELEVISION STATIONS NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- 75,000 Gestevis Telecino (Spain) (b) $ 1,119 SPAIN'S SECOND LARGEST BROADCASTER 224,700 TVB (Hong Kong) 970 TELEVISION PROGRAMMING & BROADCASTING ---------------------------------------------------------------------------- 60,925 ----------- INFORMATION: TOTAL 3,065,096 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 21.8% SERVICES >RETAIL: 6.6% 2,495,000 Chico's FAS (b) 112,674 WOMEN'S SPECIALTY RETAILER 1,600,000 Michaels Stores 88,000 CRAFT & HOBBY SPECIALTY RETAILER 3,743,000 Christopher & Banks (c) 66,288 WOMEN'S APPAREL RETAILER 2,265,000 Aeropostale (b) 60,951 MALL BASED TEEN RETAILER 788,000 Urban Outfitters (b) 47,997 ECLECTIC HOME & APPAREL RETAILER 1,400,000 Williams Sonoma (b) 46,144 HOME GOODS & FURNISHING RETAILER 5,100,000 Winn Dixie Stores 36,720 SUPERMARKETS IN THE SOUTHEAST US 895,000 Abercrombie & Fitch 34,681 TEEN APPAREL RETAILER 350,000 Whole Foods Market 33,408 NATURAL FOOD SUPERMARKETS 1,015,000 Petco Animal Supplies (b) 32,693 PET SUPPLIES & SERVICES 1,300,000 Borders Group 30,472 BOOKSTORES 1,072,000 Zale (b) 29,223 SPECIALTY RETAILER OF JEWELRY 1,370,000 Hot Topic (b) 28,071 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 773,000 Sports Authority (b) 27,751 SPORTING GOODS STORES 863,000 Ann Taylor (b) 25,010 WOMEN'S APPAREL RETAILER 823,000 West Marine (b) 22,098 LARGEST RETAILER OF BOATING SUPPLIES 700,000 Genesco (b) 16,541 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 200,000 Fast Retailing (Japan) 16,251 APPAREL RETAILER 1,700,000 Burberry Group (United Kingdom) 12,630 APPAREL RETAILER 600,000 Brookstone (b) 12,030 SPECIALTY CONSUMER PRODUCT RETAILER 2,250,000 Esprit Holdings (Hong Kong) (b) 10,117 GLOBAL APPAREL BRAND MANAGER 210,000 Otsuke Kagu (Japan) 6,556 FURNITURE RETAILER 950,000 Gaiam (b)(c) 6,441 HEALTHY LIVING CATALOG & E-COMMERCE $ 6,000 Gadzooks 5% Convertible 10/07/08 (b)(d) 2,941 TEEN APPAREL RETAILER ---------------------------------------------------------------------------- 805,688 25 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONSUMER SERVICES: 1.6% 2,250,000 ITT Educational Services (b) $ 85,545 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 775,000 Weight Watchers (b) 30,334 WEIGHT LOSS PROGRAMS 1,290,000 Coinstar (b)(c) 28,341 OWNER/OPERATOR OF COIN COUNTING MACHINES 900,000 Central Parking 16,821 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 1,750,000 Princeton Review (b)(c) 13,248 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 11,750 NATIONAL CHAIN OF FITNESS CENTERS 135,000 USS (Japan) 11,615 USED CAR AUCTIONEER ---------------------------------------------------------------------------- 197,654 >ENTERTAINMENT/LEISURE PRODUCTS: 1.5% 805,000 International Speedway Motors 39,155 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,250,000 Leapfrog Enterprises (b) 24,862 EDUCATIONAL TOYS 2,765,000 Six Flags (b) 20,074 WORLDWIDE THEME PARK OPERATOR 545,000 RC2 (b) 19,348 COLLECTIBLES & TOYS 1,276,000 Action Performance (c) 19,229 MOTORSPORT COLLECTIBLES & MERCHANDISING 370,000 Amer Group (Finland) 19,281 BRANDED SPORTING GOODS 363,000 Speedway Motorsports 12,139 MOTORSPORT RACETRACK OWNER & OPERATOR 1,750,000 Magna Entertainment, Cl. A (Canada) (b) 10,325 OWNER/OPERATOR THOROUGHBRED RACETRACKS 500,000 Natura Cosmetics (Brazil) (b) 8,042 DIRECT SALES OF HIGH-END COSMETICS 500,000 Callaway Golf 5,670 PREMIUM GOLF CLUBS & BALLS 345,000 Intralot (Greece) 5,485 LOTTERY & GAMING SYSTEMS & SERVICES ---------------------------------------------------------------------------- 183,610 >CASINOS: 1.4% 2,750,000 Alliance Gaming (b)(c) 47,190 DIVERSIFIED GAMING COMPANY 890,000 Station Casinos 43,076 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 32,900 REGIONAL RIVERBOAT CASINOS 1,925,000 Pinnacle Entertainment (b)(c) 24,274 REGIONAL RIVERBOAT CASINOS 5,000,000 Sky City Entertainment (New Zealand) 15,143 CASINO/ENTERTAINMENT COMPLEX 805,000 Monarch Casino & Resort (b)(c) 11,350 CASINO/HOTEL IN RENO 226,000 Lakes Entertainment (b) 2,619 GAMING ENTREPRENEUR 230,700 Rank Group (United Kingdom) 1,257 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 177,809 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TRAVEL: 1.0% 2,314,500 Intrawest (Canada) $ 36,921 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 28,392 OWNER/FRANCHISER OF MID-PRICED HOTELS 1,115,000 Vail Resorts (b) 21,363 OWNER/OPERATOR OF SKI RESORTS 959,000 Navigant International (b)(c) 17,061 CORPORATE TRAVEL AGENCY 750,000 Orbitz (b)(c) 16,215 ONLINE TRAVEL DISTRIBUTION 720,000 Jurys Doyle Hotel (Ireland) 9,123 HOTEL GROUP ---------------------------------------------------------------------------- 129,075 >RESTAURANTS: 0.8% 2,000,000 AFC Enterprises (b)(c) 43,000 POPEYES, CHURCHES FRIED CHICKEN 1,447,000 Autogrill (Italy) (b) 20,534 TOLLWAY RESTAURANTS 155,000 Kappa Create (Japan) 10,742 155,000 Kappa Create New Shares (Japan) 10,398 SUSHI CHAIN RESTAURANT OPERATOR 243,000 Cheesecake Factory (b) 9,669 CASUAL DINING RESTAURANTS ---------------------------------------------------------------------------- 94,343 >CRUISE LINES: 0.1% 400,000 Carnival 18,800 LARGEST CRUISE LINE ---------------------------------------------------------------------------- GOODS >APPAREL: 2.0% 2,840,000 Coach (b) 128,340 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 564,000 Oxford Industries 24,568 BRANDED & PRIVATE LABEL APPAREL 400,000 Columbia Sportswear (b) 21,848 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES 3,000,000 Billabong International (Australia) 17,219 SURFWEAR APPAREL MANUFACTURER 828,000 Steven Madden (b)(c) 16,535 WHOLESALER/RETAILER OF FASHION FOOTWEAR 1,100,000 Wacoal (Japan) 11,695 WOMEN'S SPECIALTY APPAREL 369,000 Carter's (b) 10,742 CHILDREN'S BRANDED APPAREL 5,000,000 Pacific Brands (Australia) (b) 9,274 DOMINANT AUSTRALIAN APPAREL BRAND MANAGER ---------------------------------------------------------------------------- 240,221 >FURNITURE/TEXTILES: 1.9% 1,600,000 HNI 67,728 OFFICE FURNITURE & FIREPLACES 1,900,000 Herman Miller 54,986 OFFICE FURNITURE 740,000 Mohawk Industries (b) 54,264 CARPET & FLOORING 422,000 American Woodmark (c) 25,257 KITCHEN CABINETS 1,700,000 Nobia (Sweden) 20,023 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 26 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FURNITURE/TEXTILES--CONTINUED 550,000 Masonite International (Canada) (b) $ 14,186 DOOR MANUFACTURER ---------------------------------------------------------------------------- 236,444 >LEISURE VEHICLES: 1.5% 1,745,000 Harley-Davidson 108,085 MOTORCYCLES & RELATED MERCHANDISE 1,495,000 Monaco Coach (c) 42,114 RECREATIONAL VEHICLES 550,000 Polaris Industries 26,400 MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS 2,850,000 Ducati Motor (Italy) (b) 3,995 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- 180,594 >DURABLE GOODS: 1.3% 1,326,000 SCP Pool 59,670 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 605,000 Hunter Douglas (Netherlands) 29,455 WINDOW SHADES & VENETIAN BLINDS 465,000 Hyundai Mobis (South Korea) 20,716 AUTO PARTS 10,000,000 Techtronic Industries (Hong Kong) 15,978 POWER TOOLS 105,000 Funai Electric (Japan) 15,852 CONSUMER ELECTRONICS 644,100 Shimano (Japan) 15,326 BICYCLE COMPONENTS & FISHING TACKLE ---------------------------------------------------------------------------- 156,997 >NONDURABLES: 1.1% 895,000 Scotts Company (b) 57,173 CONSUMER LAWN & GARDEN PRODUCTS 1,381,000 Helen of Troy (b) 50,917 HAIRDRYERS & CURLING IRONS 255,000 Uni-Charm (Japan) 12,704 INFANT HYGIENE & FEMININE CARE PRODUCTS 601,000 First Years (c) 11,179 INFANT & TODDLER PRODUCTS ---------------------------------------------------------------------------- 131,973 >FOOD & BEVERAGES: 1.0% 1,600,000 Kerry (Ireland) 33,894 FOOD INGREDIENTS 850,000 NBTY (b) 24,981 VITAMINS & SUPPLEMENTS 30,000,000 Global Bio-Chem Technology Group (China) 21,789 1,841,250 Global Bio-Chem Technology Group Warrants (China) (b) 120 CHINESE REFINER OF CORN-BASED COMMODITIES 4,000,000 Lion Nathan (Australia) 18,845 BEER BREWER/DISTRIBUTOR 725,000 Orkla (Norway) 18,132 DIVERSIFIED CONSUMER GOODS 180,000 Davide Campari (Italy) 8,885 SPIRITS & WINE ---------------------------------------------------------------------------- 126,646 ----------- CONSUMER GOODS/SERVICES: TOTAL 2,679,854 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 13.5% >LOGISTICS: 2.4% 2,750,000 Expeditors International of Washington $ 135,877 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 47,421 INTERNATIONAL FREIGHT FORWARDER 1,000,000 Forward Air (b) 37,400 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 2,600,000 Exel (United Kingdom) 36,255 GLOBAL LOGISTICS & FREIGHT FORWARDING 549,000 Hub Group (b)(c) 18,721 TRUCK & RAIL FREIGHT FORWARDER 40,000,000 Sinotrans (China) 14,405 INTEGRATED LOGISTICS IN CHINA 11,000,000 Sembcorp Logistics (Singapore) 11,778 LOGISTIC SERVICES FOR MARINE TRANSPORT ---------------------------------------------------------------------------- 301,857 >MACHINERY: 1.6% 2,250,000 Ametek 69,525 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,050,000 Esco Technologies (b)(c) 56,028 FILTRATION & TEST EQUIPMENT 840,000 Pentair 28,258 PUMPS, WATER TREATMENT & TOOLS 785,000 Gardner Denver (b) 21,901 AIR COMPRESSORS, BLOWERS & PUMPS 500,000 Cobham (United Kingdom) 12,683 AEROSPACE 150,000 Tennant 6,218 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT ---------------------------------------------------------------------------- 194,613 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.6% 2,550,000 Spartech (c) 66,147 PLASTICS DISTRIBUTION & COMPOUNDING 47,000 Geberit International (Switzerland) 31,331 PLUMBING SUPPLIES 1,000,000 Schulman 21,490 PLASTICS DISTRIBUTION & COMPOUNDING 37,000 Givaudan (Switzerland) 21,451 INDUSTRIAL FRAGRANCES & FLAVORS 450,000 Novozymes (Denmark) 20,305 INDUSTRIAL ENZYMES 25,000 Sika (Switzerland) (b) 13,763 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 200,000 Imerys (France) 11,660 INDUSTRIAL MINERALS PRODUCER 347,000 SYMYX (b) 8,370 MATERIALS & CHEMICALS ---------------------------------------------------------------------------- 194,517 >INDUSTRIAL GOODS: 1.5% 1,400,000 Clarcor (c) 64,120 MOBILE & INDUSTRIAL FILTERS 1,500,000 Donaldson 43,950 INDUSTRIAL AIR FILTRATION 27 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >INDUSTRIAL GOODS--CONTINUED 804,000 Mine Safety Appliances $ 27,095 SAFETY EQUIPMENT 300,000 Genlyte Group (b) 18,864 COMMERCIAL LIGHTING FIXTURES 500,000 Intermagnetics General (b) 17,015 SUPERCONDUCTING WIRE 100,000 Bacou Dalloz (France) 7,424 SAFETY EQUIPMENT 309,000 Electric City (b) 584 ELECTRICITY CONSERVATION DEVICES ---------------------------------------------------------------------------- 179,052 >INDUSTRIAL DISTRIBUTION: 1.4% 1,525,000 Watsco (c) 42,807 HVAC DISTRIBUTION 600,000 Hughes Supply 35,358 INDUSTRIAL DISTRIBUTION 1,375,000 Airgas 32,876 INDUSTRIAL GAS DISTRIBUTOR 3,800,000 Grafton Group (Ireland) (b) 30,321 BUILDERS, WHOLESALERS & DIY RETAILING 900,000 Nuco2 (b)(c) 17,730 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS 600,000 Aviall (b) 11,406 AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR ---------------------------------------------------------------------------- 170,498 >WATER: 1.0% 856,000 Cuno (b)(c) 45,668 FILTRATION & FLUIDS CLARIFICATION 2,600,000 Tetra Tech (b) 42,432 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 900,000 Pall 23,571 FILTRATION & FLUIDS CLARIFICATION 554,000 Watts Water Technologies 14,930 WATER, VALVES, REGULATORS & FILTRATION ---------------------------------------------------------------------------- 126,601 >CONSTRUCTION: 1.0% 787,500 Wienerberger (Austria) 27,473 BRICKS & CLAY ROOFING TILES 488,000 Simpson 27,387 WALL JOINT MAKER 638,000 Florida Rock Industries 26,904 CONCRETE & AGGREGATES 380,000 Daito Trust Construction (Japan) 14,612 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) (b) 8,634 LOW/MEDIUM INCOME HOME BUILDER 750,000 McCarthy & Stone (United Kingdom) 7,925 BUILDER OF RETIREMENT APARTMENTS 290,000 Dominion Homes (b) 6,699 OHIO/KENTUCKY HOME BUILDER ---------------------------------------------------------------------------- 119,634 >STEEL: 1.0% 1,900,000 Gibraltar Steel (c) 62,358 STEEL PROCESSING 750,000 Tenaris (Argentina) 24,563 STEEL PIPE FOR OIL WELLS & PIPELINES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 1,050,000 Worthington Industries $ 21,557 STEEL PROCESSING 95,000 Vallourec (France) 9,339 SEAMLESS TUBES ---------------------------------------------------------------------------- 117,817 >OTHER INDUSTRIAL SERVICES: 0.9% 1,500,000 Clark/Bardes Consulting (b)(c) 27,825 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 825,000 Mobile Mini (b)(c) 23,438 LEASES PORTABLE STORAGE UNITS 550,000 G&K Services 22,104 UNIFORM RENTAL 1,125,000 Ushio (Japan) 20,353 INDUSTRIAL LIGHT SOURCES 60,000 Schindler (Switzerland) 17,238 ELEVATOR MANUFACTURER & SERVICE PROVIDER 185,000 Jaakko Poyry (Finland) 4,673 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY ---------------------------------------------------------------------------- 115,631 >OUTSOURCING SERVICES & TRAINING: 0.6% 1,800,000 Labor Ready (b) 27,900 TEMPORARY MANUAL LABOR 525,000 Bilfinger Berger (Germany) 18,167 CONSTRUCTION & RELATED SERVICES 9,500,000 Li & Fung (Hong Kong) 13,928 SOURCING OF CONSUMER GOODS 640,000 United Services Group (Netherlands) 10,443 TEMPORARY STAFFING SERVICES 600,000 GP Strategies (b) 3,954 TRAINING PROGRAMS ---------------------------------------------------------------------------- 74,392 >CONGLOMERATES: 0.3% 737,560 Aalberts Industrie (Netherlands) 22,086 FLOW CONTROL & HEAT TREATMENT 5,550 Pargesa (Switzerland) 14,945 INDUSTRIAL & MEDIA HOLDINGS ---------------------------------------------------------------------------- 37,031 >INDUSTRIAL SUPPLIERS: 0.2% 1,800,000 Xstrata (United Kingdom) 24,118 DIVERSIFIED MINING HOLDING COMPANY ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 1,655,761 ---------------------------------------------------------------------------- FINANCE: 12.3% >BANKS: 5.1% 1,751,000 TCF Financial 101,646 GREAT LAKES BANK 2,412,000 Associated Banc-Corp 71,468 MIDWEST BANK 1,638,000 BOK Financial (b) 64,324 OKLAHOMA BANK 2,187,000 Glacier Bancorp (c) 61,608 MOUNTAIN STATES BANK 1,300,000 Texas Regional Bancshares 59,683 SOUTH TEXAS BANK 28 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BANKS--CONTINUED 3,300,000 Anglo Irish Bank (Ireland) $ 51,693 SMALL BUSINESS & MIDDLE MARKET BANKING 1,320,000 West Coast Bancorp (c) 28,301 PORTLAND SMALL BUSINESS LENDER 1,850,000 Depfa Bank (Ireland) 27,005 INTERNATIONAL PUBLIC SECTOR FINANCE 1,698,000 Republic 23,602 MICHIGAN BANK 605,000 Chittenden 21,266 VERMONT & WESTERN MASSACHUSETTS BANK 2,800,000 Den Norske Bank (Norway) 19,099 LARGEST NORWEGIAN BANK 370,000 Cullen Frost Bankers 16,557 TOP SAN ANTONIO BANK 145,000 Komercni Banka (Czech Republic) 16,266 LEADING CZECH UNIVERSAL BANK 455,000 Great Southern Bancorp 13,309 MISSOURI REAL ESTATE LENDER 360,000 CityBank Lynnwood 11,527 SEATTLE REAL ESTATE LENDER 400,000 CorpBanca (Chile) (b)(d) 9,560 CHILE'S 3RD LARGEST LOCAL BANK 231,000 Bank of the Ozarks 5,382 ARKANSAS BANK 82,000 BankFirst 4,899 OKLAHOMA COMMUNITY BANK 170,000 Midwest Bank 3,791 CHICAGO BANK 82,000 First Financial BankShares 3,438 WEST TEXAS COMMUNITY BANK 188,000 Cascade Financial 3,290 SEATTLE COMMUNITY BANK 125,000 First Mutual Bancshares 3,156 SEATTLE COMMUNITY BANK 210,000 Credito Emiliano (Italy) 1,727 ITALIAN REGIONAL BANK 47,000 West Bancorporation 822 DES MOINES SMALL BUSINESS BANK ---------------------------------------------------------------------------- 623,419 >INSURANCE: 2.6% 1,320,000 HCC Insurance Holdings 44,101 AVIATION INSURANCE 720,000 Philadelphia Consolidated Holding (b) 43,250 SPECIALTY INSURANCE 826,000 Leucadia National 41,052 INSURANCE HOLDING COMPANY 995,000 Protective Life 38,477 LIFE INSURANCE 138,000 Markel (b) 38,295 SPECIALTY INSURANCE 1,000,000 RLI 36,500 SPECIALTY INSURANCE 400,000 Selective Insurance Group 15,952 COMMERCIAL & PERSONAL LINES INSURANCE 650,000 Scottish Re Group 15,113 LIFE REINSURER 1,992,000 Jardine Lloyd Thompson (United Kingdom) 14,851 BUSINESS INSURANCE BROKER NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 210,000 StanCorp Financial $ 14,070 GROUP LIFE, DISABILITY & 401K 700,000 United National Group (b) 10,577 SPECIALTY INSURANCE 245,000 Stewart Information Services 8,274 TITLE COMPANY ---------------------------------------------------------------------------- 320,512 >SAVINGS & LOANS: 2.3% 3,276,000 Peoples Bank Bridgeport 102,047 CONNECTICUT SAVINGS & LOAN 1,227,000 Downey Financial 65,338 CALIFORNIA HOME LENDER 1,178,000 Anchor Bancorp Wisconsin (c) 31,146 WISCONSIN THRIFT 700,000 First Federal Capital 19,481 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 19,131 PREMIER MORTGAGE LENDER IN INDIA 709,000 Washington Federal 17,016 OLD FASHIONED MORTGAGE LENDER 959,400 Irish Life & Permanent (Ireland) 14,787 SAVINGS PRODUCTS 200,000 Bankinter (Spain) 7,621 MORTGAGE LENDER 74,000 Imperial Thrift & Loan (b) 3,002 SAN DIEGO SPECIALTY LENDER ---------------------------------------------------------------------------- 279,569 >FINANCE COMPANIES: 1.4% 5,831,000 AmeriCredit (b) 113,879 AUTO LENDING 1,820,000 World Acceptance (b)(c) 33,361 PERSONAL LOANS 784,000 Northgate (United Kingdom) 9,878 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 500,000 Intermediate Capital (United Kingdom) 9,815 EUROPEAN PROVIDER OF MEZZANINE CAPITAL ---------------------------------------------------------------------------- 166,933 >MONEY MANAGEMENT: 0.8% 2,390,000 SEI Investments 69,406 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT 855,000 Eaton Vance 32,670 SPECIALTY MUTUAL FUNDS 200,000 The Investment Company of China (China) (d) 90 CLOSED-END FUND ---------------------------------------------------------------------------- 102,166 >BROKERAGE: 0.1% 1,215,000 Investment Technology Group (b) 15,540 ELECTRONIC TRADING ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 1,508,139 ---------------------------------------------------------------------------- HEALTH CARE: 9.1% >SERVICES: 3.2% 5,586,000 First Health (b)(c) 87,197 PPO NETWORK 2,491,000 Lincare Holdings (b) 81,854 HOME HEALTH CARE SERVICES 29 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SERVICES--CONTINUED 2,592,000 NDCHealth Group (c) $ 60,134 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 640,000 Charles River Laboratories (b) 31,277 PHARMACEUTICAL RESEARCH 3,070,000 Gambro (Sweden) 29,798 PRODUCTS/SERVICES FOR RENAL CARE 510,000 OPG Groep (Netherlands) 27,296 PHARMACEUTICAL WHOLESALER & RETAILER 1,333,000 Dendrite International (b) 24,767 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 450,000 Accredo Health (b) 17,527 SPECIALTY PHARMACY 296,000 Omega Pharma (Belgium) 15,019 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 550,000 Serologicals (b) 10,995 BLOOD COLLECTION & ANTIBODY PRODUCTION 440,000 Medquist (b) 5,038 MEDICAL TRANSCRIPTION SERVICES ---------------------------------------------------------------------------- 390,902 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.8% 1,629,000 Edwards Lifesciences (b) 56,771 HEART VALVES 1,239,000 Diagnostic Products 54,442 IMMUNODIAGNOSTIC KITS 2,910,000 Smith & Nephew (United Kingdom) 31,402 MEDICAL EQUIPMENT & SUPPLIES 1,900,000 CTI Molecular Imaging (b) 26,942 MEDICAL DIAGNOSTIC DEVICES 1,000,000 VISX (b) 26,720 LASER EYE SURGERY EQUIPMENT 583,000 Orthofix International (b) 24,912 BONE FIXATION & STIMULATION DEVICES 365,000 Essilor International (France) 23,845 EYEGLASS LENSES 200,000 Synthes-Stratec (Switzerland) 22,820 PRODUCTS FOR ORTHOPEDIC SURGERY 670,000 ICU Medical (b) 22,465 INTRAVENOUS THERAPY PRODUCTS 875,000 Viasys Healthcare (b) 18,296 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 1,000,000 Sola International (b) 17,230 SPECIALTY EYEGLASS LENSES 350,000 Haemonetics (b) 10,377 BLOOD & PLASMA COLLECTION EQUIPMENT 190,000 Hogy Medical (Japan) 9,549 DISPOSABLE SURGICAL PRODUCTS ---------------------------------------------------------------------------- 345,771 >BIOTECHNOLOGY/DRUG DELIVERY: 2.4% 519,000 Martek Biosciences (b) 29,152 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 775,000 Par Pharmaceuticals (b) 27,288 GENERICS 1,250,000 Ligand Pharmaceuticals (b) 21,725 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 1,055,000 Nektar Therapeutics (b) 21,058 DRUG DELIVERY TECHNOLOGIES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 360,000 Neurocrine Biosciences (b) $ 18,666 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 776,000 NPS Pharmaceuticals (b) 16,296 SMALL MOLECULE DRUGS 1,165,000 DOV Pharmaceutical (b)(c) 16,263 DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION 789,000 Atherogenics (b) 15,015 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 1,876,000 Lexicon Genetics (b) 14,708 DRUG DISCOVERY 2,000,000 Medarex (b) 14,580 HUMANIZED ANTIBODIES 1,708,000 Ciphergen Biosystems (b)(c) 12,503 PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY 1,709,000 Pozen (b)(c) 11,690 DRUGS FOR MIGRAINES 608,000 Protein Design Labs (b) 11,631 MONOCLONAL ANTIBODIES 1,700,000 Sangamo Biosciences (b)(c) 10,234 DRUG DISCOVERY 1,150,000 Bioveris (b) 9,568 IMMUNODIAGNOSTIC TECHNOLOGY 3,500,000 La Jolla Pharmaceutical (b)(c) 8,505 LUPUS TREATMENT 460,000 Myriad Genetics (b) 6,863 GENE DISCOVERY & DIAGNOSTIC PRODUCTS 635,000 Maxygen (b) 6,712 MOLECULAR BREEDING 638,000 Diversa (b) 6,463 MOLECULAR BREEDING 304,000 Alexion Pharmaceuticals (b) 5,654 MONOCLONAL ANTIBODIES 865,000 Arena Pharmaceuticals (b) 4,723 NOVEL DRUG TARGETING TECHNOLOGY 2,800,000 Sequenom (b)(c) 4,088 HIGH SPEED DNA ANALYSIS INSTRUMENTS 1,875 Locus Discovery, Series D, Pfd. (d) 3,750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 461,000 SYRRX, Series C (d) 2,305 X-RAY CRYSTALLOGRAPHY 1,249,999 Perlegen Sciences (d) 1,950 LARGE SCALE GENE SEQUENCING 359,944 Microdose (d) 180 DRUG INHALERS ---------------------------------------------------------------------------- 301,570 >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) 29,807 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 16,835 DISTRIBUTION OF MEDICAL SUPPLIES ---------------------------------------------------------------------------- 46,642 >HOSPITAL MANAGEMENT: 0.2% 500,000 Rhoen-Klinikum (Germany) 26,875 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- 30 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >PHARMACEUTICALS: 0.1% 138,000 Yuhan (South Korea) $ 8,482 ETHICAL DRUG PRODUCER 2,000,000 United Drug (Ireland) 6,811 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER ---------------------------------------------------------------------------- 15,293 ----------- HEALTH CARE: TOTAL 1,127,053 ---------------------------------------------------------------------------- ENERGY/MINERALS: 9.1% >OIL/GAS PRODUCERS: 5.6% 7,275,000 XTO Energy 216,722 NATURAL GAS PRODUCER 2,800,000 Western Gas 90,944 OIL PRODUCER & COAL SEAM GAS PRODUCER 2,350,000 Ultra Petroleum (b) 87,726 NATURAL GAS PRODUCER 3,000,000 Talisman Energy (Canada) 65,227 OIL & GAS PRODUCER 1,300,000 Southwestern Energy (b) 37,271 NATURAL GAS PRODUCER 925,000 Nexen (Canada) 35,938 OIL & GAS PRODUCER 15,400,000 Tullow Oil (United Kingdom) 34,399 OIL & GAS PRODUCER 465,000 Quicksilver (b) 31,188 NATURAL GAS & COAL SEAM GAS PRODUCER 814,000 Denbury Resources (b) 17,053 OIL PRODUCER USING CO2 INJECTION 915,000 McMoRan Exploration (b)(c) 14,256 NATURAL GAS PRODUCERS & LNG DEVELOPER 582,000 Petrokazakhstan (Canada) (b) 15,842 OIL PRODUCER & REFINER IN KAZAKHSTAN 916,000 Range Resources 13,374 OIL & GAS PRODUCER 440,000 Clayton Williams Energy (b)(d) 9,675 40,000 Clayton Williams Energy (b) 956 OIL & GAS PRODUCER 3,458,200 Esprit Exploration (Canada) (b) 9,018 NATURAL GAS PRODUCER 2,265,000 Tipperary (b)(c) 8,086 COAL SEAM GAS PRODUCER ---------------------------------------------------------------------------- 687,675 >OIL SERVICES: 2.0% 2,300,000 FMC Technologies (b) 66,240 OIL & GAS WELL HEAD MANUFACTURER 730,000 Carbo Ceramics 49,822 NATURAL GAS WELL STIMULANTS 4,750,000 Newpark Resources (b)(c) 29,450 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 333,000 Fugro (Netherlands) 21,459 SURVEY & GPS SERVICES 700,000 Chicago Bridge & Iron 19,495 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 2,000,000 Key Energy Services (b) 18,880 OIL & GAS WELL WORKOVER SERVICES 2,000,000 Saipem (Italy) 18,226 OFFSHORE CONSTRUCTION & DRILLING 1,050,000 Enerflex Systems (Canada) 16,475 NATURAL GAS COMPRESSOR NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 800,000 Hanover Compressor (b) $ 9,520 NATURAL GAS COMPRESSOR RENTAL ---------------------------------------------------------------------------- 249,567 >DISTRIBUTION/MARKETING/REFINING: 1.2% 1,600,000 Equitable Resources 82,736 NATURAL GAS UTILITY & PRODUCER 1,900,000 Oneok 41,781 NATURAL GAS UTILITY, MARKETING & PROCESSING 761,000 Atmos Energy 19,482 NATURAL GAS UTILITY ---------------------------------------------------------------------------- 143,999 >INDEPENDENT POWER: 0.2% 1,470,000 Gamesa (Spain) 21,712 SPANISH WIND TURBINES 314,000 Millennium Cell (b) 584 FUEL CELL TECHNOLOGY ---------------------------------------------------------------------------- 22,296 >MINING: 0.1% 700,000 Noranda (Canada) 11,998 DIVERSIFIED NON-FERROUS METALS MINER ---------------------------------------------------------------------------- ----------- ENERGY/MINERALS: TOTAL 1,115,535 ---------------------------------------------------------------------------- OTHER INDUSTRIES: 3.6% >REAL ESTATE: 2.6% 825,000 The Rouse Company 39,188 REGIONAL SHOPPING MALLS 1,320,000 General Growth Properties 39,032 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 36,942 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 650,000 SL Green Realty 30,420 MANHATTAN OFFICE BUILDINGS 635,000 Macerich Company 30,397 REGIONAL SHOPPING MALLS 620,000 Mills 28,954 REGIONAL SHOPPING MALLS 575,000 Federal Realty Investment Trust 23,914 SHOPPING CENTERS 1,375,000 Crescent Real Estate Equities 22,165 CLASS A OFFICE BUILDINGS 650,000 United Dominion Realty 12,857 APARTMENTS 1,240,000 Highland Hospitality (b) 12,462 HOTEL REAL ESTATE INVESTMENT TRUST 1,352,600 Sponda (Finland) 11,490 OFFICE & WAREHOUSE PROPERTY COMPANY 1,000,000 Diamondrock Hospitality (b) 10,000 HOTEL REAL ESTATE INVESTMENT TRUST 190,000 Consolidated Tomoka 7,174 FLORIDA LAND OWNER 686,111 Am NV (Netherlands) 6,428 PROPERTY DEVELOPER 194,827 Security Capital European Realty (Luxembourg) (d) 3,112 SELF STORAGE PROPERTIES ---------------------------------------------------------------------------- 314,535 31 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >REGULATED UTILITIES: 0.4% 1,650,000 Northeast Utilities $ 32,125 REGULATED ELECTRIC UTILITY 799,800 Red Electrica (Spain) 13,618 SPANISH POWER GRID ---------------------------------------------------------------------------- 45,743 >TRANSPORTATION: 0.3% 140,000 Kobenhavns Lufthavne (Denmark) 20,416 COPENHAGEN AIRPORT AUTHORITY 620,000 Grupo Aeroportaurio Del Sureste (Mexico) 11,470 CANCUN & COZUMEL AIRPORT OPERATOR 15,000,000 Comfort Group (Singapore) 10,742 TAXI SERVICE ---------------------------------------------------------------------------- 42,628 >WASTE MANAGEMENT: 0.3% 1,275,000 Waste Connections (b) 37,817 SOLID WASTE MANAGEMENT ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES: TOTAL 440,723 TOTAL COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 94.3% 11,592,161 (COST: $7,214,239) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 5.6% Yield 1.04% - 1.30% Due 7/01/04 - 8/05/04 $ 77,000 General Electric Capital $ 76,939 76,000 Bayer 75,980 72,000 Citigroup 71,934 71,000 Bell South 70,942 70,000 Cargill 69,955 63,980 Campbell Soup 63,950 60,000 Household Finance 59,970 55,000 Coca Cola Enterprises 54,978 40,000 Virginia Electric & Power 39,993 40,000 Toyota Credit de Puerto Rico 39,951 30,000 Toyota Motors 29,978 30,000 John Hancock Finance 29,970 2,506 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation, Notes, Maturing 2/15/05, Market Value $2,560 (Repurchase proceeds: $2,506) 2,506 ---------------------------------------------------------------------------- (AMORTIZED COST: $687,046) 687,046 ----------- TOTAL INVESTMENTS (E): 99.9% 12,279,207 (COST: $7,901,285) (A) ----------- CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 10,343 ----------- TOTAL NET ASSETS: 100% $12,289,550 ============================================================================ 32 1-800-922-6769 -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $4,377,922 consisting of gross unrealized appreciation of $4,722,467 and gross unrealized depreciation of $344,545. (b) Non-income producing security. (c) An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting securities. On June 30, 2004, the Fund held five percent or more of the outstanding voting securities of the following companies: Christopher & Banks 10.26% AnswerThink Consulting 10.23% World Acceptance 9.84% Indus International 9.81% New Horizons Worldwide 9.81% Actuate 9.75% Gibraltar Steel 9.71% Analysts International 9.50% MAPICS 9.25% Seachange International 9.11% Skillsoft Publishing 9.02% Igate Capital 8.96% Glacier Bancorp 8.93% E.Piphany 8.82% West Coast Bancorp 8.79% BSQUARE 8.71% Monarch Casino & Resort 8.59% Nuco2 8.41% MRO Software 8.18% Esco Technologies 8.12% Clark/Bardes Consulting 8.06% Spartech 7.94% Cable Design Technologies 7.66% Concurrent Computer 7.58% JDA Software Group 7.57% First Years 7.20% NDCHealth Group 7.20% AFC Enterprises 7.13% Sequenom 7.06% Action Performance 6.96% Bally Total Fitness 6.90% Sangamo Biosciences 6.76% Watsco 6.66% Witness Systems 6.55% Navigant International 6.52% Gaiam 6.46% DOV Pharmaceutical 6.45% Princeton Review 6.38% Steve Madden 6.21% First Health 6.10% Coinstar 6.05% Pozen 5.93% Vital Stream, Cl. C 5.92% Hub Group 5.89% Ciphergen Biosystems 5.87% Orbitz 5.79% La Jolla Pharmaceutical 5.77% Tipperary 5.76% Mobile Mini 5.75% Radiant Systems 5.71% Newpark Resources 5.67% Clarcor 5.51% Pegasus Systems 5.44% Alliance Gaming 5.43% Pinnacle Entertainment 5.42% Saga Communications 5.38% McMoRan Exploration 5.31% Insight Communications 5.29% Kronos 5.23% Excel Technologies 5.19% Ciber 5.14% Micros Systems 5.13% American Woodmark 5.13% Anchor Bancorp Wisconsin 5.13% Monaco Coach 5.10% Avid Technology 5.06% Cuno 5.05% InfoUSA 5.03% The aggregate cost and value of these companies at June 30, 2004, was $1,459,400 and $2,055,516 respectively. Investments in affiliate companies represent 16.73% of total net assets at June 30, 2004. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2004 were as follows: Dividend Income $ 3,333 Net realized gain or loss $ 62,019 Change in unrealized gain or loss $ 4,005 Purchases $ 182,823 Proceeds from sales $ 214,679 In addition, additional purchases of existing portfolio holdings that were not considered affiliates in prior years, resulted in the Fund owning more than 5% of the outstanding shares of certain issues at June 30, 2004. Therefore, the cost and market value of the affiliate disclosure amounts include both acquisitions of new investments in affiliates during the period, as well as prior period investment holdings that became affiliates during the current period. 33 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities, except for CorpBanca, are valued in good faith by the Board of Trustees. At June 30, 2004, these securities amounted to $33,632, which represents 0.27% of total net assets. Additional information on these securities is as follows:
ACQUISITION SHARES/ SECURITY DATES PAR (000) COST (000) VALUE (000) -------- ----------- --------- --------- ---------- CorpBanca 11/19/03 400 $ 10,290 $ 9,560 Clayton Williams Energy 05/25/04 440 10,120 9,675 Gadzooks 5.00% Convertible 10/07/08 10/08/03 $ 6,000 6,000 2,941 Locus Discovery, Series D, Pfd. 09/05/01 1,875 7,500 3,750 Microdose 11/24/00 360 2,005 180 NeoPlanet, Series A 02/12/99 250 2,000 51 NeoPlanet, Series B 02/17/00 53 641 18 Perlegen Sciences 03/30/01 1,250 4,500 1,950 Security Capital European Realty 08/20/98-11/12/99 195 3,897 3,112 SYRRX, Series C, Pfd. 01/08/01 461 2,997 2,305 The Investment Company of China 10/22/92-03/15/00 200 1,690 90 ---------- ---------- $ 51,640 $ 33,632 ========== ==========
(e) On June 30, 2004, the market value of foreign securities represents 15.0% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT ------------ ----------- Canada $ 247,544 2.0% United Kingdom 216,072 1.8 Ireland 173,634 1.4 Japan 155,653 1.3 Switzerland 121,548 1.0 Netherlands 117,167 1.0 France 81,909 0.7 Singapore 55,635 0.5 Germany 53,952 0.4 Italy 53,367 0.4 Hong Kong 51,301 0.4 Sweden 49,821 0.4 Australia 45,338 0.4 Spain 44,070 0.4 Denmark 40,721 0.3 Norway 37,231 0.3 VALUE PERCENT ------------ ----------- China $ 36,404 0.3% Finland 35,444 0.3 South Korea 29,198 0.3 Austria 27,473 0.2 Argentina 24,563 0.2 Luxembourg 24,559 0.2 Mexico 20,104 0.1 India 19,131 0.1 Czech Republic 16,266 0.1 New Zealand 15,143 0.1 Belgium 15,019 0.1 Taiwan 10,517 0.1 Chile 9,560 0.1 Brazil 8,042 0.1 Greece 5,485 0.0 ------------ ----------- Total Foreign Portfolio $ 1,841,871 15.0% ============ =========== 34 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Business Post 810,000 1,050,000 Exel 1,500,000 1,750,000 Jardine Lloyd Thompson 800,000 1,593,000 Jurys Doyle Hotel (Ireland) 740,000 810,000 Northgate 0 473,000 Rank Group 0 230,800 RPS Group 5,800,000 6,158,000 Tullow Oil 8,000,000 9,200,000 >NETHERLANDS Fugro 200,000 278,800 Koninklijke Ten Cate 0 157,947 >GERMANY/AUSTRIA Wienerberger (Austria) 420,000 472,500 Wincor Nixdorf 0 66,000 >FRANCE Camaieu 35,000 54,000 Metropole TV 200,000 300,000 >SPAIN Gamesa 380,000 850,000 Gestevision Telecinco 0 132,000 Prosegur 400,000 550,000 >SWEDEN Hexagon 293,000 368,000 >ITALY Amplifon 90,000 216,000 Credit Emiliano 0 210,000 >LUXEMBOURG SES Global 1,280,000 1,880,000 >CZECH REPUBLIC Komercni Banka 0 100,000 >POLAND Central European Distribution 159,900 207,450 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- ASIA >JAPAN Ain Pharmaciez 0 155,200 Bank of Fukuoka 0 1,500,000 Bank of Yokohama 0 1,400,000 Chiyoda Integre 150,000 234,900 Daito Trust Construction 346,300 480,100 Hogy Medical 186,000 226,000 Olympus Optical 0 325,000 Otsuke Kagu 0 326,900 Sugi Pharmacy 270,000 330,000 Wacoal 0 1,500,000 >HONG KONG/CHINA Global Bio-Chem Technology Group (China) 15,842,000 23,000,000 >TAIWAN ASE Test 1,130,000 1,230,000 Bank of Kaohsiung 5,320,000 7,700,000 Phoenixtec Power 8,539,000 11,540,000 Springsoft Systems 435,000 3,200,000 ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA Pacific Brands 0 5,000,000 >SOUTH AFRICA Edgars Consolidated Stores 0 252,000 ---------------------------------------------------------------------------- LATIN AMERICA >MEXICO URBI Desarrollo 0 690,000 >ARGENTINA Tenaris 400,000 440,000 >BRAZIL Natura Cosmetics 0 517,000 35 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED), CONTINUED NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Bunzl 1,400,000 1,000,000 Depfa Bank (Ireland) 1,200,000 1,000,000 (INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT) Euro Money Institutional Investor 1,200,000 0 Grafton Group (Ireland) 2,900,000 2,750,000 Hit Entertainment 3,000,000 0 Irish Life & Permanent (Ireland) 800,000 767,600 McCarthy & Stone 450,000 0 >NETHERLANDS IM Tech 545,000 400,000 Vopak 792,000 581,886 >FRANCE Essilor International 230,000 140,000 Euronext 300,000 0 Fininfo 476,000 404,000 Groupe Bourbon 40,000 0 Neopost 549,400 429,400 >SWITZERLAND BKW Energie 15,000 0 Givaudan 25,000 15,000 Kaba Holdings 30,000 0 >SPAIN Cortefiel 800,000 0 Red Electrica 600,000 420,000 >SWEDEN Intrum Justitia 2,980,000 2,630,000 Munters 80,000 0 >NORWAY Orkla 291,000 221,000 >DENMARK Kobenhavns Lufthavne 100,000 65,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- ASIA >JAPAN ARRK 360,000 280,000 Bellsystem 24 35,000 0 Fast Retailing 263,000 220,000 Nissin Healthcare 390,000 0 Park 24 370,000 210,000 Shimano 650,000 442,500 Taisei Lamick 100,000 0 USS 190,000 0 >HONG KONG Lianhua Supermarket 5,000,000 930,000 TVB 2,000,000 108,300 >INDIA Gas Authority of India 660,000 0 >THAILAND Airports of Thailand 1,357,800 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Corus Entertainment 825,000 500,000 Nexen 400,000 0 Noranda 500,000 400,000 Patheon 1,112,000 0 Power Financial 200,000 0 Shawcor 392,000 0 36 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 96.8% ---------------------------------------------------------------------------- EUROPE: 57.0% >UNITED KINGDOM/IRELAND: 19.0% 2,350,000 Anglo Irish Bank (Ireland) $ 36,812 SMALL BUSINESS & MIDDLE MARKET BANKING 1,750,000 Exel 24,402 GLOBAL LOGISTICS & FREIGHT FORWARDING 1,100,000 Kerry (Ireland) 23,302 FOOD INGREDIENTS 2,750,000 Grafton Group (Ireland) 21,943 BUILDERS, WHOLESALERS & DIY RETAILING 9,200,000 Tullow Oil 20,550 OIL & GAS PRODUCER 1,450,000 Smith & Nephew 15,647 MEDICAL EQUIPMENT & SUPPLIES 600,000 Cobham 15,220 AEROSPACE 1,000,000 Depfa Bank (Ireland) 14,597 INTERNATIONAL PUBLIC SECTOR FINANCE 6,158,000 RPS Group 14,555 ENVIRONMENTAL CONSULTING 1,700,000 Burberry 12,630 APPAREL RETAILER 2,400,000 Expro International 11,981 OFFSHORE OIL FIELD SERVICES 1,593,000 Jardine Lloyd Thompson 11,876 BUSINESS INSURANCE BROKER 767,600 Irish Life & Permanent (Ireland) 11,831 SAVINGS PRODUCTS 1,200,000 Spectris 10,883 ELECTRONIC INSTRUMENTATION & CONTROLS 810,000 Jurys Doyle Hotel (Ireland) 10,264 HOTEL GROUP 750,000 Xstrata 10,049 DIVERSIFIED MINING HOLDING COMPANY 2,950,000 United Drug (Ireland) 10,046 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER 500,000 Intermediate Capital 9,815 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 1,050,000 Business Post 9,355 PARCEL & EXPRESS MAIL SERVICE 1,000,000 Bunzl 8,348 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 1,000,000 Kensington 7,995 NON-CONFORMING MORTGAGE COMPANY 473,000 Northgate 5,960 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 1,200,000 BBA Group 5,942 AVIATION SUPPORT SERVICES 200,000 Surfcontrol (b) 2,222 INTERNET FILTERING SOFTWARE 230,800 Rank Group 1,258 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 327,483 >NETHERLANDS: 7.4% 278,800 Fugro 17,966 SURVEY & GPS SERVICES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 327,000 OPG Groep $ 17,502 PHARMACEUTICAL WHOLESALER & RETAILER 353,000 Hunter Douglas 17,186 DECORATIVE WINDOW COVERINGS 569,390 Aalberts Industrie 17,050 FLOW CONTROL & HEAT TREATMENT 684,000 United Services Group 11,161 TEMPORARY STAFFING SERVICES 400,000 IM Tech 10,962 TECHNICAL ENGINEERING 339,928 Sligro Food Group 10,838 FOOD SERVICE & WHOLESALING 581,886 Vopak 9,594 OIL & CHEMICAL STORAGE 157,947 Koninklijke Ten Cate 8,638 ADVANCED TEXTILES & INDUSTRIAL FABRICS 686,111 Am NV 6,428 PROPERTY DEVELOPER ---------------------------------------------------------------------------- 127,325 >GERMANY/AUSTRIA: 6.9% 315,000 Rhoen-Klinikum Pfd. 17,310 300,000 Rhoen-Klinikum 16,125 HOSPITAL MANAGEMENT 472,500 Wienerberger (Austria) 16,484 BRICKS & CLAY ROOFING TILES 550,000 Hugo Boss Designs 12,467 FASHION APPAREL 300,000 Bilfinger Berger 10,381 CONSTRUCTION & RELATED SERVICES 300,000 Kali & Salz 10,179 POTASH PRODUCTS, FERTILIZERS, SALT & WASTE MANAGEMENT 250,000 GFK 8,734 MARKET RESEARCH SERVICES 1,000,000 Takkt 8,335 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 300,000 Zapf Creation 7,062 TOY MANUFACTURER 75,000 Beru 5,752 AUTO PARTS & ELECTRONICS 66,000 Wincor Nixdorf (b) 3,637 MANUFACTURES ATM MACHINES & RETAIL POS SYSTEMS 260,000 Deutsche Beteiligungs (b) 3,376 PRIVATE EQUITY INVESTMENT MANAGEMENT ---------------------------------------------------------------------------- 119,842 >FRANCE/BELGIUM: 6.3% 429,400 Neopost 25,411 POSTAGE METERS 244,000 Omega Pharma (Belgium) 12,380 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 150,000 Bacou Dalloz 11,136 SAFETY EQUIPMENT 404,000 Fininfo 11,095 DATA FEEDS FOR FRENCH BANKS & BROKERS 160,000 Imerys 9,328 INDUSTRIAL MINERALS PRODUCER 140,000 Essilor International 9,146 EYEGLASS LENSES 90,000 Vallourec 8,847 SEAMLESS TUBES 37 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FRANCE/BELGIUM--CONTINUED 90,000 Bonduelle $ 8,541 PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES 300,000 Metropole TV 8,481 TELEVISION BROADCASTER 54,000 Camaieu 4,826 WOMEN'S APPAREL RETAILER ---------------------------------------------------------------------------- 109,191 >SWITZERLAND: 4.6% 25,000 Geberit International 16,666 PLUMBING SUPPLIES 130,000 Synthes-Stratec 14,833 PRODUCTS FOR ORTHOPEDIC SURGERY 24,000 Sika 13,213 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 40,000 Schindler 11,492 ELEVATOR MANUFACTURER & SERVICE PROVIDER 15,000 Givaudan 8,696 INDUSTRIAL FRAGRANCES & FLAVORS 3,000 Pargesa 8,079 INDUSTRIAL & MEDIA CONGLOMERATE 110,000 Bachem 6,286 PEPTIDES ---------------------------------------------------------------------------- 79,265 >SPAIN: 3.0% 2,000,000 Abengoa 17,762 ENGINEERING & CONSTRUCTION 850,000 Gamesa 12,554 WIND TURBINES 550,000 Prosegur 8,467 SECURITY GUARDS 420,000 Red Electrica 7,151 SPANISH POWER GRID 120,000 Bankinter 4,573 MORTGAGE LENDER 132,000 Gestevision Telecinco (b) 1,970 SPAIN'S SECOND LARGEST BROADCASTER ---------------------------------------------------------------------------- 52,477 >SWEDEN: 2.2% 2,630,000 Intrum Justitia (b) 15,394 RECEIVABLES MANAGEMENT & DEBT COLLECTION 368,000 Hexagon 12,371 DIVERSIFIED ENGINEERING 860,000 Nobia 10,130 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION ---------------------------------------------------------------------------- 37,895 >ITALY: 2.1% 1,130,000 Autogrill (b) 16,035 RESTAURANTS & CATERING FOR TRAVELERS 212,000 Davide Campari 10,464 BEVERAGES 216,000 Amplifon 7,694 HEARING AID RETAILER 210,000 Credit Emiliano 1,727 REGIONAL BANK ---------------------------------------------------------------------------- 35,920 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FINLAND: 1.7% 438,300 Jaakko Poyry $ 11,071 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 185,000 Amer Group 9,640 BRANDED SPORTING GOODS 950,000 Sponda 8,070 OFFICE & WAREHOUSE PROPERTY COMPANY ---------------------------------------------------------------------------- 28,781 >NORWAY: 1.0% 1,210,000 Den Norske Bank 8,253 LARGEST NORWEGIAN BANK 221,000 Orkla 5,527 DIVERSIFIED CONSUMER GOODS 220,000 Ekornes 4,312 NICHE FURNITURE MANUFACTURER ---------------------------------------------------------------------------- 18,092 >LUXEMBOURG: 0.9% 1,880,000 SES Global 15,893 SATELLITE BROADCASTING SERVICES ---------------------------------------------------------------------------- >CZECH REPUBLIC: 0.7% 100,000 Komercni Banka 11,218 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- >DENMARK: 0.5% 65,000 Kobenhavns Lufthavne 9,479 COPENHAGEN AIRPORT AUTHORITY ---------------------------------------------------------------------------- >GREECE: 0.4% 465,000 Intralot 7,393 LOTTERY & GAMING SYSTEMS & SERVICES ---------------------------------------------------------------------------- >POLAND: 0.3% 207,450 Central European Distribution (b) 5,375 SPIRITS & WINE DISTRIBUTION ---------------------------------------------------------------------------- ----------- EUROPE: TOTAL 985,629 ---------------------------------------------------------------------------- ASIA: 28.9% >JAPAN: 15.6% 480,100 Daito Trust Construction 18,461 APARTMENT BUILDER 220,000 Fast Retailing 17,876 APPAREL RETAILER 1,500,000 Wacoal 15,947 WOMEN'S SPECIALTY APPAREL 800,000 Ushio 14,474 INDUSTRIAL LIGHT SOURCES 358,000 Eneserve 14,268 POWER GENERATORS 1,181,000 Toyo Technica 13,942 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 201,000 Kappa Create 13,930 201,000 Kappa Create New Shares 13,484 SUSHI CHAIN RESTAURANT OPERATOR 330,000 Sugi Pharmacy 13,506 DRUGSTORES 38 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >JAPAN--CONTINUED 5,200 Dentsu $ 13,440 ADVERTISING AGENCY 817,500 NIFCO 12,936 MOLDED PLASTIC COMPONENTS 280,000 ARRK 12,265 PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT 226,000 Hogy Medical 11,359 DISPOSABLE SURGICAL PRODUCTS 75,000 Funai Electric 11,323 CONSUMER ELECTRONICS 442,500 Shimano 10,529 BICYCLE COMPONENTS & FISHING TACKLE 326,900 Otsuke Kagu 10,206 FURNITURE RETAILER 1,500,000 Bank of Fukuoka 8,921 REGIONAL BANK 1,400,000 Bank of Yokohama 8,769 REGIONAL BANK 172,000 Uni-Charm 8,569 INFANT HYGIENE & FEMININE CARE PRODUCTS 210,000 Park 24 7,988 PARKING LOT OPERATOR 234,900 Chiyoda Integre 7,232 PLASTIC COMPONENTS FOR CONSUMER ELECTRONICS 325,000 Olympus Optical 6,158 MEDICAL EQUIPMENT & CAMERAS 155,200 Ain Pharmaciez 2,716 DISPENSING PHARMACY/DRUGSTORE OPERATOR 112,000 Hiroshima Bank 599 REGIONAL BANK ---------------------------------------------------------------------------- 268,898 >HONG KONG/CHINA: 5.1% 23,000,000 Global Bio-Chem Technology Group (China) 16,705 1,875,000 Global Bio-Chem Technology Group Warrant (China) (b) 123 CHINESE REFINER OF CORN-BASED COMMODITIES 6,000,000 Techtronic Industries 9,587 POWER TOOLS 2,000,000 Esprit Holdings 8,992 GLOBAL APPAREL BRAND MANAGER 4,000,000 Hong Kong Exchanges & Clearing 8,246 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 9,815,000 Hainan Meilan Airport (China) 7,507 CHINESE AIRPORT OPERATOR 20,000,000 Sinotrans (China) 7,203 INTEGRATED LOGISTICS IN CHINA 17,674,000 Linmark 6,531 SOURCING OF CONSUMER GOODS 12,000,000 Jiangsu Expressway (China) 5,767 TOLL ROAD BUILDER & OPERATOR 8,000,000 Zhejiang Expressway (China) 5,720 TOLL ROAD BUILDER & OPERATOR 14,500,000 Ngai Lik Industrial 5,562 CHINA BASED ELECTRONICS CONTRACT MANUFACTURER 27,969,225 Lerado Group 4,958 BABY PARAPHERNALIA NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 930,000 Lianhua Supermarket $ 941 CHINESE SUPERMARKET CHAIN 108,300 TVB 467 TELEVISION PROGRAMMING & BROADCASTING ---------------------------------------------------------------------------- 88,309 >TAIWAN: 2.5% 11,540,000 Phoenixtec Power 11,367 UNINTERRUPTIBLE POWER SUPPLIES 1,230,000 ASE Test (b) 9,065 SEMICONDUCTOR PACKAGING & TEST SERVICES 3,200,000 Springsoft Systems 7,343 ELECTRONIC DESIGN AUTOMATION SOFTWARE 5,000,000 Wah Lee Industrial 6,671 DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT 7,700,000 Bank of Kaohsiung 5,473 COMMERCIAL BANKING 3,010,000 Taiwan Fu Hsing 2,783 DOOR LOCK MANUFACTURER ---------------------------------------------------------------------------- 42,702 >SINGAPORE: 2.3% 1,920,000 Venture 20,184 ELECTRONIC CONTRACT MANUFACTURER 15,000,000 Comfort Group 10,742 TAXI SERVICE 9,000,000 Sembcorp Logistics 9,637 LOGISTIC SERVICES FOR MARINE TRANSPORT ---------------------------------------------------------------------------- 40,563 >SOUTH KOREA: 2.0% 355,000 Hyundai Mobis 15,815 AUTO PARTS 165,000 Yuhan 10,142 ETHICAL DRUG PRODUCER 100,000 Samsung Fire & Marine 6,410 NON-LIFE INSURANCE 252,100 Samyoung Heat Exchange (b) 2,253 POWER PLANT RELATED MACHINERY ---------------------------------------------------------------------------- 34,620 >INDIA: 1.0% 1,500,000 Housing Development Finance 16,880 PREMIER MORTGAGE LENDER IN INDIA ---------------------------------------------------------------------------- >INDONESIA: 0.3% 40,000,000 PT Perusahaan Gas Negara 6,185 GAS PIPELINE OPERATOR ---------------------------------------------------------------------------- >THAILAND: 0.1% 4,000,000 Thai Union Frozen Products 2,005 CANNED TUNA FISH ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 500,162 ---------------------------------------------------------------------------- OTHER COUNTRIES: 7.8% >CANADA: 3.9% 995,000 Talisman Energy 21,634 OIL & GAS PRODUCER 5,000,000 Esprit Exploration (b) 13,038 NATURAL GAS PRODUCER 39 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CANADA--CONTINUED 500,000 Corus Entertainment $ 9,694 TELEVISION PROGRAMMING & RADIO STATIONS 340,000 Masonite International (b) 8,769 DOOR MANUFACTURER 450,000 Intrawest 7,178 OWNER/OPERATOR OF SKI RESORTS 400,000 Noranda 6,856 DIVERSIFIED NON-FERROUS METALS MINER ---------------------------------------------------------------------------- 67,169 >AUSTRALIA/NEW ZEALAND: 3.6% 3,000,000 Billabong International 17,219 SURFWEAR APPAREL MANUFACTURER 4,000,000 Sky City Entertainment (New Zealand) 12,114 CASINO/ENTERTAINMENT COMPLEX 2,500,000 Lion Nathan 11,778 AUSTRALIAN BEER BREWER/DISTRIBUTOR 350,000 Perpetual Trustees 11,429 AUSTRALIAN MUTUAL FUND MANAGER 5,000,000 Pacific Brands (b) 9,274 DOMINANT AUSTRALIAN APPAREL BRAND MANAGER ---------------------------------------------------------------------------- 61,814 >SOUTH AFRICA: 0.3% 252,000 Edgars Consolidated Stores 5,986 LEADING RETAIL CONGLOMERATE ---------------------------------------------------------------------------- ----------- OTHER: TOTAL 134,969 ---------------------------------------------------------------------------- LATIN AMERICA: 3.1% >MEXICO: 1.4% 660,000 Grupo Aeroportuario 12,210 MEXICAN AIRPORT AUTHORITY 3,000,000 Consorcio (b) 8,634 LOW/MEDIUM INCOME HOUSE BUILDER 690,000 URBI Desarrollo (b) 2,228 AFFORDABLE HOUSING BUILDER ---------------------------------------------------------------------------- 23,072 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- >ARGENTINA: 0.8% 440,000 Tenaris $ 14,410 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- >BRAZIL: 0.5% 517,000 Natura Cosmetics (b) 8,315 DIRECT SALES OF HIGH-END COSMETICS ---------------------------------------------------------------------------- >CHILE: 0.4% 300,000 CorpBanca (c) 7,170 CHILE'S 3RD LARGEST LOCAL BANK ---------------------------------------------------------------------------- ----------- LATIN AMERICA: TOTAL 52,967 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 96.8% 1,673,727 (COST: $1,193,325) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.2% Yield 1.17% - 1.22% Due 7/6/04 - 7/7/04 $ 30,000 SBC International 29,995 25,000 American General Finance 24,995 ---------------------------------------------------------------------------- (AMORTIZED COST: $54,990) 54,990 ----------- TOTAL INVESTMENTS (d): 100.0% 1,728,717 (COST: $1,248,315) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (531) ----------- TOTAL NET ASSETS: 100% $ 1,728,186 ============================================================================ -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purpose cost of investments was $1,249,530 and net unrealized appreciation was $479,187 consisting of gross unrealized appreciation of $512,988 and gross unrealized depreciation of $33,801. (b) Non-income producing security. (c) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. This security amounted to $7,170, which represents 0.40% of total net assets. Additional information on this security is as follows:
ACQUISITION SECURITY DATE SHARES (000) COST (000) VALUE (000) -------- ----------- ----------- ---------- ----------- CorpBanca 11/19/03 300 $ 7,564 $ 7,170
(d) On June 30, 2004, the Fund's total investments were denominated in currencies as follows: CURRENCY VALUE % OF NET ASSETS ------------- ------------ --------------- Euro $ 625,619 36.2% Japanese Yen 268,898 15.6 British Pounds 198,688 11.5 US Dollar 103,220 5.9 Hong Kong Dollar 88,309 5.1 Other currencies less than 5% of total net assets 443,983 25.7 ------------ --------------- $ 1,728,717 100.0% ============ =============== 40 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2004, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ------------ ----------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 103,277 5.8% Industrial Materials 81,897 4.7 Outsourcing and Training Services 61,139 3.5 Conglomerates 55,262 3.2 Electrical Components 49,480 2.9 Construction 37,728 2.2 Machinery 27,664 1.6 Steel 23,257 1.3 Industrial Distribution 21,943 1.3 Specialty Chemicals 21,909 1.3 ---------------------------------------------------------------------------- 480,556 27.8 >CONSUMER GOODS/SERVICES Retail 85,373 4.9 Apparels 61,438 3.6 Food 50,213 2.9 Restaurants 43,449 2.5 Furniture and Textiles 40,397 2.3 Durables Goods 25,868 1.5 Beverage 22,242 1.3 Leisure Products 17,955 1.0 Travel 17,442 1.0 Casinos 13,372 0.8 Other Consumer Services 12,946 0.8 Consumer Electronics 11,323 0.7 Nondurables 8,569 0.5 Gaming 7,393 0.4 Other Entertainment 7,062 0.4 Consumer Goods Distribution 5,375 0.3 ---------------------------------------------------------------------------- 430,417 24.9 >FINANCE Banks 103,539 6.0 Other Finance Companies 39,164 2.3 Insurance 30,117 1.7 Savings and Loans 21,453 1.2 Money Management 14,805 0.9 ---------------------------------------------------------------------------- 209,078 12.1 VALUE (000) PERCENT ------------ ----------- >INFORMATION TECHNOLOGY Business Information and Marketing Services $ 34,384 2.0% Contract Manufacturing 25,746 1.5 Instrumentation 24,825 1.4 Satellite Broadcasting Services 15,893 0.9 Computer Hardware and Related Equipment 15,004 0.9 Advertising 13,440 0.8 Television Broadcasting 10,918 0.6 Television Programming 9,694 0.6 Business Software 9,565 0.5 Semiconductors and Related Equipment 9,065 0.5 Financial Processors 8,246 0.5 Electronics Distribution 6,671 0.4 ---------------------------------------------------------------------------- 183,451 10.6 >HEALTH CARE Medical Equipment 45,784 2.6 Hospital Management 33,435 1.9 Services 29,882 1.7 Pharmaceuticals 20,188 1.2 Hospital/ Laboratory Supplies 11,359 0.7 Biotechnology/ Drug Delivery 6,286 0.4 ---------------------------------------------------------------------------- 146,934 8.5 >ENERGY/MINERALS Oil/Gas Producers 55,222 3.2 Oil Services 29,947 1.7 Agricultural Commodities 16,828 1.0 Independent Power 14,268 0.8 Non-Ferrous Metals 10,049 0.6 Mining 6,856 0.4 Refining/Marketing/Distribution 6,185 0.4 ---------------------------------------------------------------------------- 139,355 8.1 >OTHER INDUSTRIES Transportation 51,425 3.0 Real Estate 25,360 1.4 Regulated Utilities 7,151 0.4 ---------------------------------------------------------------------------- 83,936 4.8 TOTAL COMMON STOCKS AND ------------ ----------- OTHER EQUITY-LIKE SECURITIES 1,673,727 96.8 SHORT-TERM OBLIGATIONS 54,990 3.2 ------------ ----------- TOTAL INVESTMENTS 1,728,717 100.0 CASH AND OTHER ASSETS LESS LIABILITIES (531) 0.0 ------------ ----------- NET ASSETS $ 1,728,186 100.0% ============================================================================ 41 COLUMBIA ACORN USA >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION Entravision Communications 0 510,000 Unova 180,000 260,000 ValueClick 140,000 285,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 290,500 435,750 Ann Taylor 75,000 187,500 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Brookstone 12,750 129,900 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) HNI 0 40,000 ITT Educational Services 376,000 396,000 NBTY 0 37,000 Sports Authority 0 70,000 Weight Watchers 0 60,000 ---------------------------------------------------------------------------- HEALTH CARE Atherogenics 0 260,000 Diagnostic Products 66,300 141,300 Lexicon Genetics 0 281,200 Ligand Pharmaceuticals 0 415,000 Par Pharmaceuticals 0 192,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Chicago Bridge & Iron 0 160,000 Clayton Williams Energy 0 95,000 Oneok 95,000 245,000 Range Resources 0 73,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Genlyte Group 0 17,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- INFORMATION DoubleClick 925,600 460,600 Kronos 331,650 296,650 Micros Systems 347,600 287,600 Telephone & Data Systems 40,000 10,000 Zebra Technologies 186,000 166,000 ---------------------------------------------------------------------------- HEALTH CARE Applera Celera Genomics 245,000 0 Enzon 311,500 0 Nektar Therapeutics 720,000 360,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Insurance Auto Auctions 206,900 41,900 42 1-800-922-6769 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 92.0% ---------------------------------------------------------------------------- INFORMATION: 33.9% >BUSINESS/CONSUMER SOFTWARE: 9.9% 287,600 Micros Systems (b) $ 13,796 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 974,000 JDA Software (b) 12,828 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 296,650 Kronos (b) 12,222 LABOR MANAGEMENT SOLUTIONS 1,330,000 Novell (b) 11,159 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 473,500 MRO Software (b) 6,444 ENTERPRISE MAINTENANCE SOFTWARE 304,991 PeopleSoft (b) 5,642 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 206,000 Group 1 Software (b) 4,728 ADDRESS VERIFICATION SOFTWARE 653,200 E.Piphany (b) 3,155 CRM SOFTWARE 140,000 SPSS (b) 2,516 STATISTICAL ANALYSIS SOFTWARE 64,000 THQ (b) 1,466 ENTERTAINMENT SOFTWARE 100,000 Aspect Communications (b) 1,420 CALL CENTER SOFTWARE 65,000 MAPICS (b) 686 MID MARKET ERP SOFTWARE ---------------------------------------------------------------------------- 76,062 >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT: 6.1% 166,000 Zebra Technologies (b) 14,442 BAR CODE PRINTERS 365,300 Integrated Circuit Systems (b) 9,922 SILICON TIMING DEVICES 424,100 Seachange International (b) 7,159 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 260,000 Unova (b) 5,265 BARCODE & WIRELESS LAN SYSTEMS 70,000 Littelfuse (b) 2,969 LITTLE FUSES 40,000 Rogers (b) 2,796 PCB LAMINATES & HIGH PERFORMANCE FOAMS 200,000 Cable Design Technologies (b) 2,120 NETWORKING & SPECIALTY CABLES 50,000 Avocent (b) 1,837 COMPUTER CONTROL SWITCHES ---------------------------------------------------------------------------- 46,510 >MOBILE COMMUNICATIONS: 5.5% 927,000 Western Wireless (b) 26,800 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 14,824 COMMUNICATION TOWERS IN USA & UK 10,000 Telephone & Data Systems 712 CELLULAR & TELEPHONE SERVICES ---------------------------------------------------------------------------- 42,336 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 3.2% 333,800 Commonwealth Telephone (b) $ 14,944 RURAL PHONE FRANCHISES & CLEC 480,000 Andrew (b) 9,605 WIRELESS INFRASTRUCTURE EQUIPMENT ---------------------------------------------------------------------------- 24,549 >BROADCASTING: 2.7% 315,800 Salem Communications (b) 8,568 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 695,000 Spanish Broadcasting (b) 6,470 SPANISH LANGUAGE RADIO STATIONS 510,000 Entravision Communications (b) 3,917 SPANISH LANGUAGE TV, RADIO & OUTDOOR 138,500 Gray Television 1,924 MID MARKET AFFILIATED TV STATIONS ---------------------------------------------------------------------------- 20,879 >TRANSACTION PROCESSORS: 1.7% 211,640 Global Payments 9,528 CREDIT CARD PROCESSOR 143,100 Pegasus Systems (b) 1,878 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 80,000 Euronet Worldwide (b) 1,850 ATM PROCESSOR ---------------------------------------------------------------------------- 13,256 >COMPUTER SERVICES: 1.5% 1,005,500 AnswerThink Consulting (b) 5,761 IT INTEGRATOR FOR FORTUNE 2000 786,000 RCM Technologies (b)(c) 4,990 TECHNOLOGY ENGINEERING SERVICES 200,000 Igate Capital (b) 796 TECHNOLOGY STAFFING SERVICES ---------------------------------------------------------------------------- 11,547 >INTERNET: 0.9% 460,600 DoubleClick (b) 3,579 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 285,000 ValueClick (b) 3,414 INTERNET ADVERTISING ---------------------------------------------------------------------------- 6,993 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 0.8% 102,800 Getty Images (b) 6,168 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA ---------------------------------------------------------------------------- >TELEVISION PROGRAMMING: 0.6% 600,000 Mediacom Communications (b) 4,692 CABLE TELEVISION FRANCHISES ---------------------------------------------------------------------------- >TELECOMMUNICATION EQUIPMENT: 0.4% 300,000 Symmetricom (b) 2,670 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- >INSTRUMENTATION: 0.3% 90,000 Trimble Navigation (b) 2,501 GPS-BASED INSTRUMENTS ---------------------------------------------------------------------------- 43 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONTRACT MANUFACTURING: 0.3% 140,000 Plexus (b) $ 1,890 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 260,053 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 15.4% >RETAIL: 7.0% 435,750 Aeropostale (b) 11,726 MALL BASED TEEN RETAILER 116,600 Urban Outfitters (b) 7,102 MULTI CHANNEL LIFESTYLE RETAILER 343,750 Christopher & Banks 6,088 WOMEN'S APPAREL RETAILER 187,500 Ann Taylor (b) 5,434 WOMEN'S APPAREL RETAILER 710,000 Winn Dixie Stores 5,112 SUPERMARKETS IN THE SOUTHEAST US 130,000 Abercrombie & Fitch 5,037 TEEN APPAREL RETAILER 95,000 Petco Animal Supplies (b) 3,060 PET SUPPLIES & SERVICES 50,000 Michaels Stores 2,750 CRAFT & HOBBY SPECIALTY RETAILER 129,900 Brookstone (b) 2,604 SPECIALTY CONSUMER PRODUCT RETAILER 70,000 Sports Authority (b) 2,513 SPORTING GOODS STORES 95,000 Genesco (b) 2,245 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER ---------------------------------------------------------------------------- 53,671 >CONSUMER SERVICES: 4.0% 396,000 ITT Educational Services (b) 15,056 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 9,557 OWNER/OPERATOR OF COIN COUNTING MACHINES 181,700 Central Parking 3,396 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 60,000 Weight Watchers 2,348 WEIGHT LOSS PROGRAMS ---------------------------------------------------------------------------- 30,357 >NONDURABLES: 1.4% 167,200 Scotts Company (b) 10,681 CONSUMER LAWN & GARDEN PRODUCTS ---------------------------------------------------------------------------- >APPAREL: 1.2% 197,600 Steven Madden (b) 3,946 WHOLESALER/RETAILER OF FASHION FOOTWEAR 64,000 Coach (b) 2,892 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 59,200 Oxford Industries 2,579 BRANDED & PRIVATE LABEL APPAREL ---------------------------------------------------------------------------- 9,417 >FURNITURE: 1.0% 85,000 Herman Miller 2,460 OFFICE FURNITURE NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 30,000 American Woodmark $ 1,795 KITCHEN CABINETS 40,000 HNI 1,693 OFFICE FURNITURE & FIREPLACES 20,000 Mohawk Industries (b) 1,467 CARPET & FLOORING ---------------------------------------------------------------------------- 7,415 >ENTERTAINMENT/LEISURE PRODUCTS: 0.7% 91,300 International Speedway Motors 4,441 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 50,000 Leapfrog Enterprises (b) 994 EDUCATIONAL TOYS ---------------------------------------------------------------------------- 5,435 >FOOD & BEVERAGES: 0.1% 37,000 NBTY (b) 1,087 VITAMINS & SUPPLEMENTS ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 118,063 ---------------------------------------------------------------------------- HEALTH CARE: 15.1% >MEDICAL EQUIPMENT: 6.5% 573,000 Edwards Lifesciences (b) 19,970 HEART VALVES 415,000 Ligand Pharmaceuticals (b) 7,213 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 141,300 Diagnostic Products 6,209 IMMUNODIAGNOSTIC KITS 220,000 Viasys Healthcare (b) 4,600 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 170,600 VISX (b) 4,558 LASER EYE SURGERY 111,700 ICU Medical (b) 3,745 INTRAVENOUS THERAPY PRODUCTS 245,000 CTI Molecular Imaging (b) 3,474 MEDICAL DIAGNOSTIC DEVICES ---------------------------------------------------------------------------- 49,769 >SERVICES: 4.3% 744,000 First Health (b) 11,614 PPO NETWORK 423,800 NDCHealth Group 9,832 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 246,800 Lincare Holdings (b) 8,110 HOME HEALTH CARE SERVICES 40,000 Charles River Laboratories (b) 1,955 PHARMACEUTICAL RESEARCH 100,000 Dendrite International (b) 1,858 SOFTWARE FOR PHARMACEUTICAL SALES FORCE ---------------------------------------------------------------------------- 33,369 >BIOTECHNOLOGY/DRUG DELIVERY: 3.0% 360,000 Nektar Therapeutics (b) 7,186 DRUG DELIVERY TECHNOLOGIES 192,000 Par Pharmaceuticals (b) 6,760 GENERICS 260,000 Atherogenics (b) 4,948 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 44 1-800-922-6769 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 281,200 Lexicon Genetics (b) $ 2,205 DRUG DISCOVERY 154,000 SYRRX, Series C (b)(d) 770 X-RAY CRYSTALLOGRAPHY 375,000 Locus Discovery, Series D, Pfd. (b)(d) 750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 75,000 Bioveris (b) 624 IMMUNODIAGNOSTIC TECHNOLOGY 363,636 Metabolex, Series F (b)(d) 53 DRUGS FOR DIABETES ---------------------------------------------------------------------------- 23,296 >MEDICAL SUPPLIES: 1.3% 222,800 Techne (b) 9,681 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ---------------------------------------------------------------------------- ----------- HEALTH CARE: TOTAL 116,115 ---------------------------------------------------------------------------- ENERGY/MINERALS: 10.3% >OIL & GAS PRODUCERS: 4.6% 305,000 Quicksilver (b) 20,456 NATURAL GAS & COAL SEAM GAS PRODUCER 272,000 Western Gas 8,835 OIL & COAL SEAM GAS PRODUCER 82,100 Southwestern Energy (b) 2,354 NATURAL GAS PRODUCER 95,000 Clayton Williams Energy (b) 2,270 OIL & GAS PRODUCER 73,000 Range Resources 1,066 OIL & GAS PRODUCER 43,300 McMoRan Exploration (b) 675 NATURAL GAS PRODUCERS & LNG DEVELOPER ---------------------------------------------------------------------------- 35,656 >OIL SERVICES: 3.6% 401,700 FMC Technologies (b) 11,569 OIL & GAS WELL HEAD MANUFACTURER 941,000 Newpark Resources (b) 5,834 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 160,000 Chicago Bridge & Iron 4,456 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 61,000 Carbo Ceramics 4,163 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,274 OIL & GAS WELL WORKOVER SERVICES ---------------------------------------------------------------------------- 27,296 >DISTRIBUTION/MARKETING/REFINING: 2.1% 115,600 Equitable Resources 5,978 NATURAL GAS UTILITY & PRODUCER 245,000 Oneok 5,388 NATURAL GAS UTILITY, MARKETING & PROCESSING 193,000 Atmos Energy 4,941 NATURAL GAS UTILITY ---------------------------------------------------------------------------- 16,307 ----------- ENERGY/MINERALS: TOTAL 79,259 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- FINANCE: 9.8% >FINANCE COMPANIES: 4.0% 1,091,500 AmeriCredit (b) $ 21,317 AUTO LENDING 520,200 World Acceptance (b) 9,535 PERSONAL LOANS ---------------------------------------------------------------------------- 30,852 >INSURANCE: 2.9% 430,000 HCC Insurance Holdings 14,367 AVIATION INSURANCE 16,500 Markel (b) 4,579 SPECIALTY INSURANCE 35,000 Philadelphia Consolidated Holding (b) 2,102 SPECIALTY INSURANCE 91,000 United National Group (b) 1,375 SPECIALTY INSURANCE ---------------------------------------------------------------------------- 22,423 >BANKS: 1.7% 131,500 TCF Financial 7,634 GREAT LAKES BANK 158,125 Chittenden 5,558 VERMONT & WEST MASSACHUSETTS BANK ---------------------------------------------------------------------------- 13,192 >SAVINGS & LOAN: 1.2% 110,000 Downey Financial 5,857 CALIFORNIA HOME LENDER 116,400 Anchor Bancorp Wisconsin 3,078 WISCONSIN THRIFT ---------------------------------------------------------------------------- 8,935 ----------- FINANCE: TOTAL 75,402 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 6.7% >MACHINERY: 3.3% 282,000 Esco Technologies (b) 15,047 FILTRATION & TEST EQUIPMENT 194,000 Pentair 6,526 PUMPS, WATER TREATMENT & TOOLS 110,000 Ametek 3,399 AEROSPACE/INDUSTRIAL INSTRUMENTS ---------------------------------------------------------------------------- 24,972 >LOGISTICS: 1.3% 286,000 Hub Group (b) 9,753 TRUCK & RAIL FREIGHT FORWARDER ---------------------------------------------------------------------------- >WATER: 0.9% 134,000 Cuno (b) 7,149 FILTRATION & FLUIDS CLARIFICATION ---------------------------------------------------------------------------- >INDUSTRIAL SERVICES: 0.3% 95,000 Clark/Bardes Consulting (b) 1,762 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 41,900 Insurance Auto Auctions (b) 712 AUTO SALVAGE SERVICES ---------------------------------------------------------------------------- 2,474 45 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.3% 95,000 Spartech $ 2,464 PLASTICS DISTRIBUTION & COMPOUNDING ---------------------------------------------------------------------------- >INDUSTRIAL DISTRIBUTION: 0.3% 100,000 Nuco2 (b) 1,970 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS ---------------------------------------------------------------------------- >CONSTRUCTION: 0.2% 45,000 Florida Rock Industries 1,898 CONCRETE & AGGREGATES ---------------------------------------------------------------------------- >INDUSTRIAL GOODS: 0.1% 17,000 Genlyte Group (b) 1,069 COMMERCIAL LIGHTING FIXTURES ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 51,749 ---------------------------------------------------------------------------- OTHER INDUSTRIES: 0.8% >REAL ESTATE: 0.6% 47,000 The Rouse Company 2,232 REGIONAL SHOPPING MALLS 100,000 Crescent Real Estate Equities 1,612 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality (b) 352 HOTEL REAL ESTATE INVESTMENT TRUST ---------------------------------------------------------------------------- 4,196 >REGULATED UTILITIES: 0.2% 90,000 Northeast Utilities 1,752 REGULATED ELECTRIC UTILITY ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES: TOTAL 5,948 ----------- TOTAL COMMON STOCKS: 92.0% 706,589 (COST: $486,876) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 8.0% Yield 1.12% - 1.17% Due 7/6/04 - 7/7/04 $ 20,000 SBC International $ 19,997 20,000 Prudential Funding 19,996 21,514 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $21,945 (Repurchase proceeds: $21,515) 21,514 ---------------------------------------------------------------------------- (AMORTIZED COST: $61,507) 61,507 ----------- TOTAL INVESTMENTS: 100.0% 768,096 (COST: $548,383) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (180) ----------- TOTAL NET ASSETS: 100% $ 767,916 ============================================================================ 46 1-800-922-6769 -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $219,713 consisting of gross unrealized appreciation of $242,584 and gross unrealized depreciation of $22,871. (b) Non-income producing security. (c) An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting securities. On June 30, 2004, the Fund held five percent or more of the outstanding voting securities of the following company: RCM Technologies 6.95% The aggregate cost and value of this company at June 30, 2004, was $5,636 and $4,990 respectively. Investments in affiliate companies represent 0.65% of total net assets at June 30, 2004. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2004 were as follows: Dividend Income $ -- Net realized gain or loss $ (3,800) Change in unrealized gain or loss $ (2,712) Purchases $ -- Proceeds from sales $ 562 (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At June 30, 2004, these securities amounted to $1,573, which represents 0.20% of total net assets. Additional information on these securities is as follows:
ACQUISITION SECURITY DATES SHARES (000) COST (000) VALUE (000) -------- ----------- ------------ ---------- ---------- SYRRX, Series C 01/08/01 154 $ 1,101 $ 770 Locus Discovery, Series D, Pfd. 09/05/01 375 1,500 750 Metabolex, Series F 05/11/00 364 2,000 53 ----------- ---------- $ 4,601 $ 1,573 =========== ==========
47 COLUMBIA ACORN INTERNATIONAL SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM British Sky Broadcasting 35,000 70,000 Exel 80,000 135,000 >CZECH REPUBLIC Komercni Banka 0 12,000 ---------------------------------------------------------------------------- ASIA >JAPAN Daito Trust Construction 26,100 38,000 Olympus Optical 0 23,000 Sugi Pharmacy 23,000 32,300 Uni-Charm 20,500 25,100 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Kinross Gold 0 80,000 ---------------------------------------------------------------------------- LATIN AMERICA >ARGENTINA Tenaris 19,200 39,200 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM BG Group 350,000 270,000 >FRANCE Essilor International 18,000 12,000 Neopost 33,600 25,100 >SWEDEN Gambro 58,000 0 ---------------------------------------------------------------------------- ASIA >JAPAN Fast Retailing 19,500 11,500 Nidec 12,900 0 USS 11,700 0 >HONG KONG/CHINA Esprit Holdings 200,000 0 Sinotrans (China) 2,000,000 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Power Financial 20,000 0 Talisman Energy 72,000 52,000 (INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT) 48 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 96.8% ---------------------------------------------------------------------------- EUROPE: 56.3% >UNITED KINGDOM/IRELAND: 29.7% 161,486 Anglo Irish Bank (Ireland) $ 2,530 SMALL BUSINESS & MIDDLE MARKET BANKING 135,000 Exel 1,882 GLOBAL LOGISTICS & FREIGHT FORWARDING 270,000 BG Group 1,667 OIL & GAS PRODUCER 88,000 Depfa Bank (Ireland) 1,285 INTERNATIONAL PUBLIC SECTOR FINANCE 40,000 Cobham 1,015 AEROSPACE 120,000 Grafton Group (Ireland) 957 BUILDERS, WHOLESALERS & DIY RETAILING 70,000 British Sky Broadcasting (b) 792 DIGITAL SATELLITE BROADCASTING 100,000 Jardine Lloyd Thompson 745 BUSINESS INSURANCE BROKER 120,000 Compass Group 735 INTERNATIONAL CONCESSION & CONTRACT CATERER 75,000 Burberry 557 APPAREL RETAILER 25,000 Kerry (Ireland) 530 FOOD INGREDIENTS 46,000 Smith & Nephew 496 MEDICAL EQUIPMENT & SUPPLIES 15,400 Rank Group 84 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 13,275 >SWITZERLAND: 7.2% 4,000 Schindler 1,149 ELEVATOR MANUFACTURER & SERVICE PROVIDER 7,000 Swatch Group 913 WATCH & ELECTRONICS MANUFACTURER 1,000 Givaudan 580 INDUSTRIAL FRAGRANCES & FLAVORS 5,000 Synthes-Stratec 570 PRODUCTS FOR ORTHOPEDIC SURGERY ---------------------------------------------------------------------------- 3,212 >FRANCE: 6.1% 25,100 Neopost 1,485 POSTAGE METERS 12,000 Essilor International 784 EYEGLASS LENSES 8,000 Imerys 466 INDUSTRIAL MINERALS PRODUCER ---------------------------------------------------------------------------- 2,735 >NORWAY: 3.2% 209,500 Den Norske Bank 1,429 LARGEST NORWEGIAN BANK ---------------------------------------------------------------------------- >CZECH REPUBLIC: 3.0% 12,000 Komercni Banka 1,346 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >GERMANY: 2.5% 20,000 Rhoen-Klinikum $ 1,099 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- >SPAIN: 1.8% 43,000 Red Electrica 732 SPANISH POWER GRID 6,000 Gestevis Telecino (b) 90 SPAIN'S SECOND LARGEST BROADCASTER ---------------------------------------------------------------------------- 822 >LUXEMBOURG: 1.7% 90,000 SES Global 761 SATELLITE BROADCASTING SERVICES ---------------------------------------------------------------------------- >ITALY: 1.1% 34,000 Autogrill (b) 482 RESTAURANTS & CATERING FOR TRAVELERS ---------------------------------------------------------------------------- ----------- EUROPE: TOTAL 25,161 ---------------------------------------------------------------------------- ASIA: 29.4% >JAPAN: 25.8% 9,700 Funai Electric 1,464 CONSUMER ELECTRONICS 38,000 Daito Trust Construction 1,461 APARTMENT BUILDER 32,300 Sugi Pharmacy 1,322 DRUGSTORES 12,400 Hoya 1,301 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 71,000 Ushio 1,285 INDUSTRIAL LIGHT SOURCES 25,100 Uni-Charm 1,251 INFANT HYGIENE & FEMININE CARE PRODUCTS 51,500 Shimano 1,225 BICYCLE COMPONENTS & FISHING TACKLE 11,500 Fast Retailing 934 APPAREL RETAILER 310 Dentsu 801 ADVERTISING AGENCY 23,000 Olympus Optical 436 MEDICAL EQUIPMENT & CAMERAS 11,000 Hiroshima Bank 59 REGIONAL BANK ---------------------------------------------------------------------------- 11,539 >SINGAPORE: 2.0% 83,000 Venture 873 ELECTRONIC CONTRACT MANUFACTURER ---------------------------------------------------------------------------- >HONG KONG: 1.6% 500,000 Li & Fung 733 SOURCING OF CONSUMER GOODS ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 13,145 49 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- OTHER COUNTRIES: 8.2% >CANADA: 5.5% 52,000 Talisman Energy $ 1,131 OIL & GAS PRODUCER 50,000 Noranda 857 DIVERSIFIED NON-FERROUS METALS MINER 80,000 Kinross Gold (b) 444 GOLD MINING ---------------------------------------------------------------------------- 2,432 >AUSTRALIA: 2.7% 260,000 Lion Nathan 1,225 BEER BREWER/DISTRIBUTOR ---------------------------------------------------------------------------- ----------- OTHER COUNTRIES: TOTAL 3,657 ---------------------------------------------------------------------------- LATIN AMERICA: 2.9% >ARGENTINA: 2.9% 39,200 Tenaris 1,284 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- ----------- LATIN AMERICA: TOTAL 1,284 ----------- TOTAL COMMON STOCKS: 96.8% 43,247 (COST: $32,172) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.7% $1,663 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $1,698 (Repurchase proceeds: $1,663) $ 1,663 ---------------------------------------------------------------------------- (COST: $1,663) 1,663 ----------- TOTAL INVESTMENTS (c): 100.5% 44,910 (COST: $33,835) (a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.5%) (208) ----------- TOTAL NET ASSETS: 100% $ 44,702 ============================================================================ ---------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purpose cost of investments was the same and net unrealized appreciation was $11,075 consisting of gross unrealized appreciation of $11,840 and gross unrealized depreciation of $765. (b) Non-income producing security. (c) On June 30, 2004, the Fund's total investments were denominated in currencies as follows: CURRENCY VALUE % OF NET ASSETS -------------------- ------------ --------------- Japanese Yen $ 11,539 25.8% Euro 11,201 25.1 British Pounds 7,974 17.8 Swiss Franc 3,212 7.2 US Dollar 2,946 6.6 Canadian Dollar 2,432 5.5 Other currencies less than 5% of total net assets 5,606 12.5 ------------ --------------- $ 44,910 100.5% ============ =============== 50 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL SELECT >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2004, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 3,031 6.8% Electrical Components 2,300 5.2 Machinery 1,485 3.3 Construction 1,461 3.3 Steel 1,284 2.9 Industrial Distribution 957 2.1 Outsourcing and Training Services 733 1.6 Specialty Chemicals 580 1.3 Industrial Materials 466 1.0 ---------------------------------------------------------------------------- 12,297 27.5 >CONSUMER GOODS/SERVICES Retail 2,813 6.3 Durable Goods 2,138 4.8 Consumer Electronics 1,464 3.3 Nondurables 1,251 2.8 Beverage 1,225 2.7 Restaurants 1,217 2.7 Food 530 1.2 Casinos 84 0.2 ---------------------------------------------------------------------------- 10,722 24.0 >FINANCE Banks 6,649 14.9 Insurance 745 1.7 ---------------------------------------------------------------------------- 7,394 16.6 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Semiconductors and Related Equipment $ 1,301 2.9% Television Broadcasting 882 2.0 Contract Manufacturing 873 1.9 Advertising 801 1.8 Satellite Broadcasting Services 761 1.7 ---------------------------------------------------------------------------- 4,618 10.3 >ENERGY/MINERALS Oil/Gas Producers 2,798 6.3 Mining 857 1.9 Non-Ferrous Metals 444 1.0 ---------------------------------------------------------------------------- 4,099 9.2 >HEALTH CARE Medical Equipment 2,286 5.1 Hospital Management 1,099 2.5 ---------------------------------------------------------------------------- 3,385 7.6 >OTHER INDUSTRIES Regulated Utilities 732 1.6 ---------------------------------------------------------------------------- 732 1.6 ------------ ----------- TOTAL COMMON STOCKS 43,247 96.8 SHORT-TERM OBLIGATIONS 1,663 3.7 ------------ ----------- TOTAL INVESTMENTS 44,910 100.5 CASH AND OTHER ASSETS LESS LIABILITIES (208) (0.5) ------------ ----------- NET ASSETS $ 44,702 100.0% ============================================================================ 51 COLUMBIA ACORN SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION McAfee 2,200,000 2,750,000 PeopleSoft 1,800,000 2,135,000 Skillsoft Publishing 0 2,063,700 Tellabs 0 3,400,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 660,000 855,000 Safeway 1,050,000 1,500,000 ---------------------------------------------------------------------------- FINANCE SEI Investments 600,000 729,500 ---------------------------------------------------------------------------- HEALTH CARE Lincare Holdings 660,000 835,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Weight Watchers 1,040,000 728,000 ---------------------------------------------------------------------------- FINANCE TCF Financial 1,160,000 985,000 ---------------------------------------------------------------------------- HEALTH CARE Guidant 355,000 0 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES EXPEDITORS INTERNATIONAL OF WASHINGTON 720,000 620,000 52 1-800-922-6769 COLUMBIA ACORN SELECT >STATEMENT OF INEVESTMENTS (UNAUDITED) JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 90.5% ---------------------------------------------------------------------------- INFORMATION: 34.0% >BUSINESS SOFTWARE: 12.8% 2,750,000 McAfee (b) $ 49,858 SECURITY SOFTWARE & SERVICES 2,135,000 PeopleSoft (b) 39,498 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 1,300,000 Synopsys (b) 36,959 SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS ---------------------------------------------------------------------------- 126,315 >BUSINESS INFORMATION: 6.1% 470,000 Moody's 30,390 CREDIT RATING SERVICE 900,000 Fair Isaac 30,042 CREDIT SCORING & DECISION ANALYTIC SOFTWARE ---------------------------------------------------------------------------- 60,432 >ADVERTISING: 3.8% 2,700,000 Interpublic Group (b) 37,071 ADVERTISING ---------------------------------------------------------------------------- >INSTRUMENTATION: 3.4% 1,000,000 Tektronix 34,020 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- >CONSUMER SOFTWARE: 3.3% 600,000 Electronic Arts (b) 32,730 ENTERTAINMENT SOFTWARE ---------------------------------------------------------------------------- >TELECOMMUNICATION EQUIPMENT: 3.0% 3,400,000 Tellabs (b) 29,716 TELECOMMUNICATIONS & CABLE EQUIPMENT ---------------------------------------------------------------------------- >INTERNET: 1.6% 2,063,700 Skillsoft Publishing (b) 15,684 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 335,968 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 32.8% >RETAIL: 10.3% 1,500,000 Safeway (b) 38,010 RETAIL FOOD & DRUG STORES 855,000 Abercrombie & Fitch 33,131 TEEN APPAREL RETAILER 750,000 Costco 30,802 WAREHOUSE SUPERSTORES ---------------------------------------------------------------------------- 101,943 >CONSUMER SERVICES: 7.7% 1,250,000 ITT Educational Services (b) 47,525 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 728,000 Weight Watchers (b) 28,494 WEIGHT LOSS PROGRAMS ---------------------------------------------------------------------------- 76,019 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FURNITURE & MANUFACTURERS: 6.3% 1,160,000 Herman Miller $ 33,570 OFFICE FURNITURE 630,000 Coach (b) 28,470 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES ---------------------------------------------------------------------------- 62,040 >LEISURE VEHICLES: 6.3% 1,000,000 Harley-Davidson 61,940 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- >ENTERTAINMENT: 2.2% 460,000 International Speedway Motors 22,374 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 324,316 ---------------------------------------------------------------------------- FINANCE: 13.5% >BANKS: 8.0% 985,000 TCF Financial 57,179 GREAT LAKES BANK 750,000 Associated Banc-Corp 22,223 MIDWEST BANK ---------------------------------------------------------------------------- 79,402 >INSURANCE: 3.4% 120,000 Markel (b) 33,300 SPECIALTY INSURANCE ---------------------------------------------------------------------------- >MONEY MANAGEMENT: 2.1% 729,500 SEI Investments 21,185 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 133,887 ---------------------------------------------------------------------------- HEALTH CARE: 7.1% >SERVICES: 7.1% 2,750,000 First Health (b) 42,928 PPO NETWORK 835,000 Lincare Holdings (b) 27,438 HOME HEALTH CARE SERVICES ---------------------------------------------------------------------------- 70,366 ----------- HEALTH CARE: TOTAL 70,366 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 3.1% >LOGISTICS: 3.1% 620,000 Expeditors International of Washington 30,634 INTERNATIONAL FREIGHT FORWARDER ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 30,634 ----------- TOTAL COMMON STOCKS: 90.5% 895,171 (COST: $768,527) 53 COLUMBIA ACORN SELECT >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 9.6% Yield 1.00% - 1.30% Due 7/1/04 - 7/8/04 $ 35,000 Virginia Electric $ 34,991 30,000 Prudential Funding 29,999 25,000 Coca Cola Enterprises 25,000 4,668 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $4,765 (Repurchase proceeds: $4,668) 4,668 ---------------------------------------------------------------------------- (AMORTIZED COST: $94,658) 94,658 ----------- TOTAL INVESTMENTS: 100.1% 989,829 (COST: $863,185) (a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.1%) (848) ----------- TOTAL NET ASSETS: 100% $ 988,981 ============================================================================ >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $126,644, consisting of gross unrealized appreciation of $158,975 and gross unrealized depreciation of $32,331. (b) Non-income producing security. 54 1-800-922-6769 COLUMBIA ACORN FAMILY OF FUNDS > STATEMENTS OF ASSETS AND LIABILITIES > STATEMENTS OF OPERATIONS > STATEMENTS OF CHANGES IN NET ASSETS > FINANCIAL HIGHLIGHTS > NOTES TO FINANCIAL STATEMENTS 55 Columbia Acorn Family of Funds >Statements of Assets and Liabilities (Unaudited)
COLUMBIA COLUMBIA ACORN ACORN JUNE 30, 2004 FUND INTERNATIONAL -------------------- ------------------- (IN THOUSANDS) ASSETS Unaffiliated investments, at Cost $ 6,441,885 $ 1,248,315 Affiliated investments, at Cost (See Note 4) 1,459,400 -- -------------------- ------------------- Unaffiliated investments, at Value $ 10,223,691 $ 1,728,717 Affiliated investments, at Value (See Note 4) 2,055,516 -- Cash -- -- Foreign currency (cost: Columbia Acorn Fund $12,413; Columbia Acorn International $3,802; Columbia Acorn International Select $94) 12,404 3,794 Receivable for: Investments sold 11,447 21,118 Fund shares sold 25,309 928 Dividends and interest 6,289 3,910 Expense reimbursement due from Advisor -- -- Deferred Trustees' Compensation Investments 1,155 440 Other assets 691 612 -------------------- ------------------- Total Assets 12,336,502 1,759,519 LIABILITIES Payable to custodian bank -- 18,587 Payable for: Investments purchased 30,626 6,414 Fund shares redeemed 11,305 5,528 Custodian -- -- Management fee -- 3 12b-1 Service & Distribution fees 2,661 71 Legal & audit fees 37 -- Reports to shareholders -- -- Deferred Trustees' fees 1,155 440 Transfer agent fees 441 99 Trustees' fees -- -- Registration & blue sky fees 60 16 Foreign capital gains tax 667 175 -------------------- ------------------- Total Liabilities 46,952 31,333 -------------------- ------------------- NET ASSETS $ 12,289,550 $ 1,728,186 ==================== =================== COMPOSITION OF NET ASSETS Paid in capital $ 7,481,497 $ 1,386,259 Undistributed net investment income (Accumulated net investment loss) 9,339 13,761 Accumulated net realized gain (loss) 421,428 (150,889) Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 4,377,922 479,187 Foreign currency transactions 31 43 Foreign capital gains tax (667) (175) -------------------- ------------------- NET ASSETS $ 12,289,550 $ 1,728,186 ==================== =================== Net asset value per share -- Class A (a) $ 24.11 $ 24.20 (Net assets/shares) ($2,317,581/96,128) ($55,692/2,302) Maximum offering price per share -- Class A (b) $ 25.58 $ 25.68 (Net asset value per share/ front-end sales charge) ($24.11/0.9425) ($24.20/0.9425) Net asset value and offering price per share -- Class B (a) $ 23.54 $ 23.81 (Net assets/shares) ($1,302,614/55,347) ($45,081/1,894) Net asset value and offering price per share -- Class C (a) $ 23.54 $ 23.82 (Net assets/shares) ($981,925/41,721) ($25,023/1,051) Net asset value, offering and redemption price per share -- Class Z $ 24.56 $ 24.39 (Net assets/shares) ($7,687,430/313,049) ($1,602,390/65,709) COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN JUNE 30, 2004 USA INTERNATIONAL SELECT SELECT ----------------- -------------------- ----------------- (IN THOUSANDS) ASSETS Unaffiliated investments, at Cost $ 542,747 $ 33,835 $ 863,185 Affiliated investments, at Cost (See Note 4) 5,636 -- -- ----------------- -------------------- ----------------- Unaffiliated investments, at Value $ 763,106 $ 44,910 $ 989,829 Affiliated investments, at Value (See Note 4) 4,990 -- -- Cash 1 -- 1 Foreign currency (cost: Columbia Acorn Fund $12,413; Columbia Acorn International $3,802; Columbia Acorn International Select $94) -- 93 -- Receivable for: Investments sold -- 29 -- Fund shares sold 1,378 83 4,435 Dividends and interest 92 46 84 Expense reimbursement due from Advisor -- 8 -- Deferred Trustees' Compensation Investments 79 -- -- Other assets 89 1 72 ----------------- -------------------- ----------------- Total Assets 769,735 45,170 994,421 LIABILITIES Payable to custodian bank -- -- -- Payable for: Investments purchased 17 392 3,225 Fund shares redeemed 1,562 28 1,791 Custodian 2 -- 2 Management fee -- -- -- 12b-1 Service & Distribution fees 118 5 326 Legal & audit fees -- 8 11 Reports to shareholders -- 11 -- Deferred Trustees' fees 79 -- -- Transfer agent fees 41 9 79 Trustees' fees -- 1 -- Registration & blue sky fees -- 14 6 Foreign capital gains tax -- -- -- ----------------- -------------------- ----------------- Total Liabilities 1,819 468 5,440 ----------------- -------------------- ----------------- NET ASSETS $ 767,916 $ 44,702 $ 988,981 ================= ==================== ================= COMPOSITION OF NET ASSETS Paid in capital $ 555,632 $ 67,136 $ 819,743 Undistributed net investment income (Accumulated net investment loss) (3,256) 41 (4,253) Accumulated net realized gain (loss) (4,173) (33,551) 46,847 Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 219,713 11,075 126,644 Foreign currency transactions -- 1 -- Foreign capital gains tax -- -- -- ----------------- -------------------- ----------------- NET ASSETS $ 767,916 $ 44,702 $ 988,981 ================= ==================== ================= Net asset value per share -- Class A (a) $ 22.74 $ 15.50 $ 19.30 (Net assets/shares) ($103,174/4,538) ($3,194/206) ($384,079/19,897) Maximum offering price per share -- Class A (b) $ 24.13 $ 16.45 $ 20.48 (Net asset value per share/ front-end sales charge) ($22.74/0.9425) ($15.50/0.9425) ($19.30/0.9425) Net asset value and offering price per share -- Class B (a) $ 22.23 $ 15.12 $ 18.84 (Net assets/shares) ($70,114/3,153) ($3,928/260) ($156,718/8,320) Net asset value and offering price per share -- Class C (a) $ 22.25 $ 15.15 $ 18.84 (Net assets/shares) ($38,992/1,753) ($2,094/138) ($89,703/4,762) Net asset value, offering and redemption price per share -- Class Z $ 23.08 $ 15.63 $ 19.55 (Net assets/shares) ($555,636/24,074) ($35,486/2,271) ($358,481/18,336)
(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. 56 1-800-922-6769 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 COLUMBIA COLUMBIA ACORN ACORN (IN THOUSANDS) FUND INTERNATIONAL --------- ------------- INVESTMENT INCOME: Dividend income $ 62,690 $ 26,029 Dividend income from affiliates (See Note 4) 3,333 -- Interest income 3,970 231 --------- ------------- 69,993 26,260 Foreign taxes withheld (3,122) (2,608) --------- ------------- Total Investment Income 66,871 23,652 EXPENSES: Management fee 38,885 7,073 Administration fee 2,939 430 12b-1 Service and Distribution fees: Class A 3,815 98 Class B 6,333 214 Class C 4,738 124 Transfer agent fees: Class A 1,663 53 Class B 1,571 76 Class C 1,019 30 Class Z 1,421 591 Custody fees 634 520 Trustees' fees 209 34 Registration & blue sky fees 302 49 Reports to shareholders 834 148 Legal & audit fees 669 75 Non-recurring costs (See Note 7) 135 20 Other expenses 118 21 --------- ------------- Total expenses 65,285 9,556 Less custody fees paid indirectly (16) --* Less reimbursement of expenses by Advisor (647) (93) Non-recurring costs reimbursed (See Note 7) (135) (20) --------- ------------- Net Expenses 64,487 9,443 --------- ------------- Net Investment Income (Loss) 2,384 14,209 NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 362,021 87,220 Affiliated investments (See Note 4) 62,019 -- Foreign currency transactions (41) 416 --------- ------------- Net realized gain 423,999 87,636 ========= ============= Net change in net unrealized appreciation/ depreciation on: Unaffiliated investments 553,555 40,841 Affiliated investments (See Note 4) 4,005 -- Foreign currency transactions 1,560 518 Foreign capital gains tax (667) (175) --------- ------------- Net change in unrealized appreciation/ depreciation 558,453 41,184 ========= ============= Net realized and unrealized gain 982,452 128,820 --------- ------------- Net Increase in Net Assets resulting from Operations $ 984,836 $ 143,029 ========= =============
COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN (IN THOUSANDS) USA INTERNATIONAL SELECT SELECT -------- -------------------- -------- INVESTMENT INCOME: Dividend income $ 1,080 $ 458 $ 2,238 Dividend income from affiliates (See Note 4) -- -- -- Interest income 255 7 427 -------- -------------------- -------- 1,335 465 2,665 Foreign taxes withheld (1) (48) -- -------- -------------------- -------- Total Investment Income 1,334 417 2,665 EXPENSES: Management fee 3,299 210 4,008 Administration fee 181 11 223 12b-1 Service and Distribution fees: Class A 171 5 583 Class B 343 17 700 Class C 189 17 397 Transfer agent fees: Class A 83 4 283 Class B 88 9 214 Class C 39 4 101 Class Z 119 33 162 Custody fees 16 22 13 Trustees' fees 13 3 8 Registration & blue sky fees 55 38 113 Reports to shareholders 87 31 113 Legal & audit fees 29 12 34 Non-recurring costs (See Note 7) 8 1 10 Other expenses 7 3 9 -------- -------------------- -------- Total expenses 4,727 420 6,971 Less custody fees paid indirectly (1) --* --* Less reimbursement of expenses by Advisor (36) (58) (64) Non-recurring costs reimbursed (See Note 7) (8) (1) (10) -------- -------------------- -------- Net Expenses 4,682 361 6,897 -------- -------------------- -------- Net Investment Income (Loss) (3,348) 56 (4,232) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 12,979 4,798 47,083 Affiliated investments (See Note 4) (3,800) -- -- Foreign currency transactions -- (3) -- -------- -------------------- -------- Net realized gain 9,179 4,795 47,083 ======== ==================== ======== Net change in net unrealized appreciation/ depreciation on: Unaffiliated investments 64,025 (1,679) 16,432 Affiliated investments (See Note 4) (2,712) -- -- Foreign currency transactions -- (13) -- Foreign capital gains tax -- -- -- -------- -------------------- -------- Net change in unrealized appreciation/ depreciation 61,313 (1,692) 16,432 ======== ==================== ======== Net realized and unrealized gain 70,492 3,103 63,515 -------- -------------------- -------- Net Increase in Net Assets resulting from Operations $ 67,144 $ 3,159 $ 59,283 ======== ==================== ========
* Rounds to less than $500. See accompanying notes to financial statements. 57 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, -------------- ------------ -------------- ------------ (IN THOUSANDS) 2004 2003 2004 2003 OPERATIONS: Net investment income (loss) $ 2,384 $ (9,911) $ 14,209 $ 15,934 Net realized gain (loss) on investments and foreign currency transactions 423,999 90,682 87,636 (7,144) Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 558,453 2,974,675 41,184 561,990 -------------- ------------ -------------- ------------ Net Increase from Operations 984,836 3,055,446 143,029 570,780 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (356) (106) Net realized gain -- Class A (2,709) (1,752) -- -- Net investment income -- Class B -- -- (75) -- Net realized gain -- Class B (1,570) (1,116) -- -- Net investment income -- Class C -- -- (42) -- Net realized gain -- Class C (1,182) (813) -- -- Net investment income -- Class Z -- -- (16,468) (5,829) Net realized gain -- Class Z (8,844) (6,236) -- -- -------------- ------------ -------------- ------------ Total Distribution to Shareholders (14,305) (9,917) (16,941) (5,935) SHARE TRANSACTIONS: Subscriptions -- Class A 394,994 1,041,782 9,334 45,279 Distributions reinvested -- Class A 2,456 1,584 288 80 Redemptions -- Class A (237,930) (259,438) (10,981) (42,948) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class A 159,520 783,928 (1,359) 2,411 Subscriptions -- Class B 55,758 364,144 5,820 11,463 Distributions reinvested -- Class B 1,433 1,018 66 -- Redemptions -- Class B (75,752) (88,744) (3,800) (5,639) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class B (18,561) 276,418 2,086 5,824 Subscriptions -- Class C 77,410 375,513 4,006 14,870 Distributions reinvested -- Class C 972 673 35 -- Redemptions -- Class C (70,493) (73,548) (3,818) (13,396) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class C 7,889 302,638 223 1,474 Subscriptions -- Class Z 873,722 1,682,204 95,148 220,802 Distributions reinvested -- Class Z 7,792 5,443 14,698 5,336 Redemptions -- Class Z (880,158) (667,986) (187,093) (434,204) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class Z 1,356 1,019,661 (77,247) (208,066) -------------- ------------ -------------- ------------ Net Increase (Decrease) from Share Transactions 150,204 2,382,645 (76,297) (198,357) -------------- ------------ -------------- ------------ Redemption Fees -- -- 63 400 -------------- ------------ -------------- ------------ Total Increase in Net Assets 1,120,735 5,428,174 49,854 366,888 NET ASSETS: Beginning of period 11,168,815 5,740,641 1,678,332 1,311,444 -------------- ------------ -------------- ------------ End of period $ 12,289,550 $ 11,168,815 $ 1,728,186 $ 1,678,332 ============== ============ ============== ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ 9,339 $ 6,955 $ 13,761 $ 16,493 ============== ============ ============== ============ COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, -------------- ------------ -------------- ------------ (IN THOUSANDS) 2004 2003 2004 2003 OPERATIONS: Net investment income (loss) $ (3,348) $ (4,408) $ 56 $ 136 Net realized gain (loss) on investments and foreign currency transactions 9,179 7,301 4,795 (425) Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 61,313 172,313 (1,692) 12,936 -------------- ------------ -------------- ------------ Net Increase from Operations 67,144 175,206 3,159 12,647 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (6) -- Net realized gain -- Class A -- -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B -- -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C -- -- -- -- Net investment income -- Class Z -- -- (151) (19) Net realized gain -- Class Z -- -- -- -- -------------- ------------ -------------- ------------ Total Distribution to Shareholders -- -- (157) (19) SHARE TRANSACTIONS: Subscriptions -- Class A 17,327 60,457 821 2,350 Distributions reinvested -- Class A -- -- 5 -- Redemptions -- Class A (12,605) (23,188) (380) (3,212) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class A 4,722 37,269 446 (862) Subscriptions -- Class B 3,084 19,327 762 1,577 Distributions reinvested -- Class B -- -- -- -- Redemptions -- Class B (5,153) (8,053) (239) (989) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class B (2,069) 11,274 523 588 Subscriptions -- Class C 3,376 13,056 445 3,211 Distributions reinvested -- Class C -- -- -- -- Redemptions -- Class C (3,355) (4,575) (2,222) (3,564) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class C 21 8,481 (1,777) (353) Subscriptions -- Class Z 116,241 221,496 2,488 23,389 Distributions reinvested -- Class Z -- -- 146 18 Redemptions -- Class Z (111,417) (83,975) (3,534) (25,393) -------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class Z 4,824 137,521 (900) (1,986) -------------- ------------ -------------- ------------ Net Increase (Decrease) from Share Transactions 7,498 194,545 (1,708) (2,613) -------------- ------------ -------------- ------------ Redemption Fees -- -- 2 39 -------------- ------------ -------------- ------------ Total Increase in Net Assets 74,642 369,751 1,296 10,054 NET ASSETS: Beginning of period 693,274 323,523 43,406 33,352 -------------- ------------ -------------- ------------ End of period $ 767,916 $ 693,274 $ 44,702 $ 43,406 ============== ============ ============== ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ (3,256) $ 92 $ 41 $ 142 ============== ============ ============== ============ COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, -------------- ------------ (IN THOUSANDS) 2004 2003 OPERATIONS: Net investment income (loss) $ (4,232) $ (4,419) Net realized gain (loss) on investments and foreign currency transactions 47,083 8,643 Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 16,432 95,023 -------------- ------------ Net Increase from Operations 59,283 99,247 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- Net realized gain -- Class A -- (1,172) Net investment income -- Class B -- -- Net realized gain -- Class B -- (563) Net investment income -- Class C -- -- Net realized gain -- Class C -- (301) Net investment income -- Class Z -- -- Net realized gain -- Class Z -- (2,145) -------------- ------------ Total Distribution to Shareholders -- (4,181) SHARE TRANSACTIONS: Subscriptions -- Class A 147,794 237,520 Distributions reinvested -- Class A -- 1,096 Redemptions -- Class A (50,572) (30,378) -------------- ------------ Net Increase (Decrease) -- Class A 97,222 208,238 Subscriptions -- Class B 39,146 78,641 Distributions reinvested -- Class B -- 507 Redemptions -- Class B (9,370) (9,321) -------------- ------------ Net Increase (Decrease) -- Class B 29,776 69,827 Subscriptions -- Class C 28,340 50,838 Distributions reinvested -- Class C -- 257 Redemptions -- Class C (7,816) (4,391) -------------- ------------ Net Increase (Decrease) -- Class C 20,524 46,704 Subscriptions -- Class Z 110,515 301,467 Distributions reinvested -- Class Z -- 1,920 Redemptions -- Class Z (68,958) (150,913) -------------- ------------ Net Increase (Decrease) -- Class Z 41,557 152,474 -------------- ------------ Net Increase (Decrease) from Share Transactions 189,079 477,243 -------------- ------------ Redemption Fees -- -- -------------- ------------ Total Increase in Net Assets 248,362 572,309 NET ASSETS: Beginning of period 740,619 168,310 -------------- ------------ End of period $ 988,981 $ 740,619 ============== ============ UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ (4,253) $ (21) ============== ============
See accompanying notes to financial statements. 58-59 Spread 1-800-922-6769 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, --------------- ------------- -------------- ------------ (IN THOUSANDS) 2004 2003 2004 2003 Subscriptions -- Class A 16,980 56,202 396 2,734 Shares issued in reinvestment and capital gains -- Class A 105 73 13 5 Less shares redeemed -- Class A (10,239) (14,204) (462) (2,590) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class A 6,846 42,071 (53) 149 Subscriptions -- Class B 2,448 20,371 252 653 Shares issued in reinvestment and capital gains -- Class B 63 48 3 -- Less shares redeemed -- Class B (3,332) (5,154) (164) (343) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class B (821) 15,265 91 310 Subscriptions -- Class C 3,397 20,690 173 911 Shares issued in reinvestment and capital gains -- Class C 43 32 2 -- Less shares redeemed -- Class C (3,096) (4,207) (166) (833) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class C 344 16,515 9 78 Subscriptions -- Class Z 36,993 89,984 4,001 13,104 Shares issued in reinvestment and capital gains -- Class Z 327 249 625 313 Less shares redeemed -- Class Z (37,398) (36,502) (7,872) (25,027) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class Z (78) 53,731 (3,246) (11,610) --------------- ------------ -------------- ------------ Net Increase (Decrease) in Shares of Beneficial Interest 6,291 127,582 (3,199) (11,073) --------------- ------------ -------------- ------------ COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, --------------- ------------ -------------- ------------ (IN THOUSANDS) 2004 2003 2004 2003 Subscriptions -- Class A 795 3,345 54 216 Shares issued in reinvestment and capital gains -- Class A -- -- -- -- Less shares redeemed -- Class A (579) (1,309) (25) (294) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class A 216 2,036 29 (78) Subscriptions -- Class B 144 1,087 52 137 Shares issued in reinvestment and capital gains -- Class B -- -- -- -- Less shares redeemed -- Class B (241) (512) (16) (95) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class B (97) 575 36 42 Subscriptions -- Class C 158 724 30 311 Shares issued in reinvestment and capital gains -- Class C -- -- -- -- Less shares redeemed -- Class C (157) (279) (153) (339) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class C 1 445 (123) (28) Subscriptions -- Class Z 5,262 12,184 163 2,239 Shares issued in reinvestment and capital gains -- Class Z -- -- 10 2 Less shares redeemed -- Class Z (5,074) (4,772) (233) (2,435) --------------- ------------ -------------- ------------ Net Increase (Decrease) -- Class Z 188 7,412 (60) (194) --------------- ------------ -------------- ------------ Net Increase (Decrease) in Shares of Beneficial Interest 308 10,468 (118) (258) --------------- ------------ -------------- ------------ COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, --------------- ------------ (IN THOUSANDS) 2004 2003 Subscriptions -- Class A 7,899 14,227 Shares issued in reinvestment and capital gains -- Class A -- 63 Less shares redeemed -- Class A (2,702) (1,869) --------------- ------------ Net Increase (Decrease) -- Class A 5,197 12,421 Subscriptions -- Class B 2,138 4,854 Shares issued in reinvestment and capital gains -- Class B -- 30 Less shares redeemed -- Class B (512) (601) --------------- ------------ Net Increase (Decrease) -- Class B 1,626 4,283 Subscriptions -- Class C 1,549 3,102 Shares issued in reinvestment and capital gains -- Class C -- 15 Less shares redeemed -- Class C (428) (271) --------------- ------------ Net Increase (Decrease) -- Class C 1,121 2,846 Subscriptions -- Class Z 5,839 18,117 Shares issued in reinvestment and capital gains -- Class Z -- 108 Less shares redeemed -- Class Z (3,641) (8,676) --------------- ------------ Net Increase (Decrease) -- Class Z 2,198 9,549 --------------- ------------ Net Increase (Decrease) in Shares of Beneficial Interest 10,142 29,099 --------------- ------------
See accompanying notes to financial statements. 60 - 61 Spread 1-800-922-6769 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS COLUMBIA ACORN FUND
(UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.20 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.01) Net realized and unrealized gain (loss) 1.95 -------------- Total from Investment Operations 1.94 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.03) -------------- Total Distributions Declared to Shareholders (0.03) -------------- NET ASSET VALUE, END OF PERIOD $ 24.11 ============== Total Return (c) 8.73%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.25%(g) Net investment income (loss) (f) (0.11)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 2,317,581 CLASS A SHARES YEAR ENDED DECEMBER 31, ------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.34 $ 17.80 $ 17.19 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.07) (0.07) (0.05) 0.01 Net realized and unrealized gain (loss) 6.95 (2.39) 1.01 1.22 -------------- ----------- ----------- ---------- Total from Investment Operations 6.88 (2.46) 0.96 1.23 -------------- ----------- ----------- ---------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) -------------- ----------- ----------- ---------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) -------------- ----------- ----------- ---------- NET ASSET VALUE, END OF PERIOD $ 22.20 $ 15.34 $ 17.80 $ 17.19 ============== =========== =========== ========== Total Return (c) 44.85% (13.82)% 5.56% 7.40%(d) -------------- ----------- ----------- ---------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.33% 1.42% 1.42% 1.25%(g)(h) Net investment income (loss) (f) (0.36)% (0.45)% (0.33)% 0.17%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 1,982,260 $ 724,121 $ 306,405 $ 18,252
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.03% and 0.39% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS B SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.10) Net realized and unrealized gain (loss) 1.92 -------------- Total from Investment Operations 1.82 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.03) -------------- Total Distributions Declared to Shareholders (0.03) -------------- NET ASSET VALUE, END OF PERIOD $ 23.54 ============== Total Return (c) 8.36%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.99%(g) Net investment loss (f) (0.85)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 1,302,614 CLASS B SHARES YEAR ENDED DECEMBER 31, ------------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.13 $ 17.67 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.18) (0.17) (0.16) (0.01) Net realized and unrealized gain (loss) 6.82 (2.37) 1.01 1.22 ------------- ----------- ----------- ---------- Total from Investment Operations 6.64 (2.54) 0.85 1.21 ------------- ----------- ----------- ---------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) ------------- ----------- ----------- ---------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) ------------- ----------- ----------- ---------- NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.13 $ 17.67 $ 17.17 ============= =========== =========== ========== Total Return (c) 43.89% (14.37)% 4.92% 7.27%(d) ------------- ----------- ----------- ---------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.98% 2.07% 2.07% 1.90%(g)(h) Net investment loss (f) (1.01)% (1.10)% (0.98)% (0.48)%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 1,221,931 $ 618,727 $ 286,422 $ 15,951
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.68% and (0.26)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS C SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 21.75 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.09) Net realized and unrealized gain (loss) 1.91 -------------- Total from Investment Operations 1.82 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.03) -------------- Total Distributions Declared to Shareholders (0.03) -------------- NET ASSET VALUE, END OF PERIOD $ 23.54 ============== Total Return (c) 8.36%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.96%(g) Net investment loss (f) (0.82)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 981,925 CLASS C SHARES YEAR ENDED DECEMBER 31, --------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.12 $ 17.66 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.18) (0.17) (0.17) (0.01) Net realized and unrealized gain (loss) 6.83 (2.37) 1.01 1.22 ----------- ----------- ----------- --------- Total from Investment Operations 6.65 (2.54) 0.84 1.21 ----------- ----------- ----------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- (0.06) From net realized gains (0.02) -- (0.35) (1.86) ----------- ----------- ----------- --------- Total Distributions Declared to Shareholders (0.02) -- (0.35) (1.92) ----------- ----------- ----------- --------- NET ASSET VALUE, END OF PERIOD $ 21.75 $ 15.12 $ 17.66 $ 17.17 =========== =========== =========== ========= Total Return (c) 43.99% (14.38)% 4.86% 7.27%(d) ----------- ----------- ----------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.98% 2.07% 2.07% 1.90%(g)(h) Net investment loss (f) (1.01)% (1.10)% (0.98)% (0.48)%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 10% 13% 20% 29%(d) Net assets at end of period (000's) $ 900,016 $ 376,024 $ 150,727 $ 8,510
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.68% and (0.26)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 62 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL
(UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.45 INCOME FROM INVESTMENT OPERATIONS Net investment income (b) 0.15 Net realized and unrealized gain (loss) 1.75 -------------- Total from Investment Operations 1.90 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.15) From net realized gains -- -------------- Total Distributions Declared to Shareholders (0.15) -------------- NET ASSET VALUE, END OF PERIOD $ 24.20 ============== Total Return (c) 8.51%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.50%(g) Net investment income (f) 1.25%(g) Reimbursement 0.01%(g) Portfolio turnover rate 25%(d) Net assets at end of period (000's) $ 55,692 CLASS A SHARES YEAR ENDED DECEMBER 31, ------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.32 $ 18.35 $ 23.84 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (b) 0.10 0.05 0.01 0.02 Net realized and unrealized gain (loss) 7.08 (3.07) (5.11) (1.26) ---------- ---------- ---------- ---------- Total from Investment Operations 7.18 (3.02) (5.10) (1.24) ---------- ---------- ---------- ---------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.05) (0.01) -- -- From net realized gains -- -- (0.39) (3.59) ---------- ---------- ---------- ---------- Total Distributions Declared to Shareholders (0.05) (0.01) (0.39) (3.59) ---------- ---------- ---------- ---------- NET ASSET VALUE, END OF PERIOD $ 22.45 $ 15.32 $ 18.35 $ 23.84 ========== ========== ========== ========== Total Return (c) 46.94% (16.46)% (21.59)% (4.85)%(d) ---------- ---------- ---------- ---------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.59% 1.56% 1.65% 1.26%(g)(h) Net investment income (f) 0.57% 0.30% 0.03% 0.73%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 52,872 $ 33,806 $ 25,587 $ 10,323
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.59% and 0.40% respectively, were revised to reflect all classes specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS B SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.07 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.05 Net realized and unrealized gain (loss) 1.73 -------------- Total from Investment Operations 1.78 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) From net realized gains -- -------------- Total Distributions Declared to Shareholders (0.04) -------------- NET ASSET VALUE, END OF PERIOD $ 23.81 ============== Total Return (c) 8.07%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.32%(g) Net investment income (loss) (f) 0.47%(g) Reimbursement 0.01%(g) Portfolio turnover rate 25%(d) Net assets at end of period (000's) $ 45,081 CLASS B SHARES YEAR ENDED DECEMBER 31, --------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.22 $ 23.81 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.02) (0.06) (0.12) 0.01 Net realized and unrealized gain (loss) 6.98 (3.05) (5.08) (1.28) ---------- ---------- ---------- --------- Total from Investment Operations 6.96 (3.11) (5.20) (1.27) ---------- ---------- ---------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- From net realized gains -- -- (0.39) (3.59) ---------- ---------- ---------- --------- Total Distributions Declared to Shareholders -- -- (0.39) (3.59) ---------- ---------- ---------- --------- NET ASSET VALUE, END OF PERIOD $ 22.07 $ 15.11 $ 18.22 $ 23.81 ========== ========== ========== ========= Total Return (c) 46.06% (17.07)% (22.04)% (4.97)%(d) ---------- ---------- ---------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.24% 2.21% 2.30% 1.91%(g)(h) Net investment income (loss) (f) (0.10)% (0.35)% (0.62)% 0.08%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 39,800 $ 22,560 $ 17,235 $ 5,675
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 2.24% and (0.25)% respectively, were revised to reflect all classes specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS C SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.06 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.07 Net realized and unrealized gain (loss) 1.73 -------------- Total from Investment Operations 1.80 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) From net realized gains -- -------------- Total Distributions Declared to Shareholders (0.04) -------------- NET ASSET VALUE, END OF PERIOD $ 23.82 ============== Total Return (c) 8.17%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.20%(g) Net investment income (loss) (f) 0.58%(g) Reimbursement 0.01%(g) Portfolio turnover rate 25%(d) Net assets at end of period (000's) $ 25,023 CLASS C SHARES YEAR ENDED DECEMBER 31, ------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 15.11 $ 18.21 $ 23.81 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.01) (0.06) (0.13) 0.01 Net realized and unrealized gain (loss) 6.96 (3.04) (5.08) (1.28) ---------- ---------- ---------- --------- Total from Investment Operations 6.95 (3.10) (5.21) (1.27) ---------- ---------- ---------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- From net realized gains -- -- (0.39) (3.59) ---------- ---------- ---------- --------- Total Distributions Declared to Shareholders -- -- (0.39) (3.59) ---------- ---------- ---------- --------- NET ASSET VALUE, END OF PERIOD $ 22.06 $ 15.11 $ 18.21 $ 23.81 ========== ========== ========== ========= Total Return (c) 46.00% (17.02)% (22.08)% (4.97)%(d) ---------- ---------- ---------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.24% 2.21% 2.30% 1.91%(g)(h) Net investment income (loss) (f) (0.06)% (0.35)% (0.62)% 0.08%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 40% 52% 45% 63%(d) Net assets at end of period (000's) $ 22,990 $ 14,575 $ 14,327 $ 3,965
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 2.24% and (0.25)% respectively, were revised to reflect all classes specific expenses in this period. See accompanying notes to financial statements 63 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS CONTINUED COLUMBIA ACORN USA
(UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.74 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.13) Net realized and unrealized gain (loss) 2.13 -------------- Total from Investment Operations 2.00 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -------------- Total Distributions Declared to Shareholders -- -------------- NET ASSET VALUE, END OF PERIOD $ 22.74 ============== Total Return (c) 9.64%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.53%(g) Net investment loss (f) (1.16)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 103,174 CLASS A SHARES YEAR ENDED DECEMBER 31, ----------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.18 $ 17.50 $ 14.88 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.22) (0.19) (0.19) (0.01) Net realized and unrealized gain (loss) 6.78 (3.13) 2.96 1.06 ---------- ---------- ---------- -------- Total from Investment Operations 6.56 (3.32) 2.77 1.05 ---------- ---------- ---------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.15) -- ---------- ---------- ---------- -------- Total Distributions Declared to Shareholders -- -- (0.15) -- ---------- ---------- ---------- -------- NET ASSET VALUE, END OF PERIOD $ 20.74 $ 14.18 $ 17.50 $ 14.88 ========== ========== ========== ======== Total Return (c) 46.26% (18.97)% 18.65% 7.59%(d) ---------- ---------- ---------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.65% 1.74% 1.84% 1.41%(g)(h) Net investment loss (f) (1.26)% (1.21)% (1.13)% (0.73)%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 89,650 $ 32,422 $ 20,455 $ 798
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.17% and (0.49)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS B SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.20) Net realized and unrealized gain (loss) 2.07 -------------- Total from Investment Operations 1.87 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -------------- Total Distributions Declared to Shareholders -- -------------- NET ASSET VALUE, END OF PERIOD $ 22.23 ============== Total Return (c) 9.18%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.27%(g) Net investment loss (f) (1.90)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 70,114 CLASS B SHARES YEAR ENDED DECEMBER 31, ----------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07 ---------- ---------- ---------- -------- Total from Investment Operations 6.35 (3.39) 2.66 1.04 ---------- ---------- ---------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.13) -- ---------- ---------- ---------- -------- Total Distributions Declared to Shareholders -- -- (0.13) -- ---------- ---------- ---------- -------- NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 ========== ========== ========== ======== Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d) ---------- ---------- ---------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.30% 2.39% 2.49% 2.06%(g)(h) Net investment loss (f) (1.91)% (1.86)% (1.78)% (1.38)%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 66,175 $ 37,478 $ 27,722 $ 685
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.82% and (1.14)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS C SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.36 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.20) Net realized and unrealized gain (loss) 2.09 -------------- Total from Investment Operations 1.89 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -------------- Total Distributions Declared to Shareholders -- -------------- NET ASSET VALUE, END OF PERIOD $ 22.25 ============== Total Return (c) 9.28%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.21%(g) Net investment loss (f) (1.84)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 11%(d) Net assets at end of period (000's) $ 38,992 CLASS C SHARES YEAR ENDED DECEMBER 31, ----------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 6.67 (3.10) 2.96 1.07 ---------- ---------- ---------- -------- Total from Investment Operations 6.35 (3.39) 2.66 1.04 ---------- ---------- ---------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains -- -- (0.13) -- ---------- ---------- ---------- -------- Total Distributions Declared to Shareholders -- -- (0.13) -- ---------- ---------- ---------- -------- NET ASSET VALUE, END OF PERIOD $ 20.36 $ 14.01 $ 17.40 $ 14.87 ========== ========== ========== ======== Total Return (c) 45.32% (19.48)% 17.92% 7.52%(d) ---------- ---------- ---------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.30% 2.39% 2.49% 2.06%(g)(h) Net investment loss (f) (1.91)% (1.86)% (1.78)% (1.38)%(g)(h) Reimbursement -- -- -- -- Portfolio turnover rate 7% 31% 24% 45%(d) Net assets at end of period (000's) $ 35,662 $ 18,313 $ 13,049 $ 347
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.82% and (1.14)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 64 1-800-922-6769 COLUMBIA ACORN INTERNATIONAL SELECT
(UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.45 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.01 Net realized and unrealized gain (loss) 1.07 -------------- Total from Investment Operations 1.08 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.03) From net realized gains -- -------------- Total Distributions Declared to Shareholders (0.03) -------------- NET ASSET VALUE, END OF PERIOD $ 15.50 ============== Total Return (c) 7.46%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.80%(g) Net investment income (loss) (f) 0.18%(g) Reimbursement 0.33%(g) Portfolio turnover rate 46%(e) Net assets at end of period (000's) $ 3,194 CLASS A SHARES YEAR ENDED DECEMBER 31, ----------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.24 $ 12.07 $ 17.15 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.03 (0.01) (0.09) (0.03) Net realized and unrealized gain (loss) 4.18 (1.82) (4.90) (0.53) --------- --------- --------- --------- Total from Investment Operations 4.21 (1.83) (4.99) (0.56) --------- --------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- --------- --------- --------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 14.45 $ 10.24 $ 12.07 $ 17.15 ========= ========= ========= ========= Total Return (c) 41.11%(d) (15.16)%(d) (29.17)%(d) (3.16)%(e) --------- --------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.80% 1.80% 1.80% 1.68%(g)(h) Net investment income (loss) (f) 0.24% (0.09)% (0.67)% (1.18)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 2,557 $ 2,612 $ 2,861 $ 3,172
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.29% and (0.79)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS B SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.12 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.04) Net realized and unrealized gain (loss) 1.04 -------------- Total from Investment Operations 1.00 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains -- -------------- Total Distributions Declared to Shareholders -- -------------- NET ASSET VALUE, END OF PERIOD $ 15.12 ============== Total Return (c) 7.08%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45%(g) Net investment loss (f) (0.50)%(g) Reimbursement 0.55%(g) Portfolio turnover rate 46%(e) Net assets at end of period (000's) $ 3,928 CLASS B SHARES YEAR ENDED DECEMBER 31, ----------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.08 $ 11.96 $ 17.13 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.06) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.53) --------- --------- --------- --------- Total from Investment Operations 4.04 (1.88) (5.08) (0.58) --------- --------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- --------- --------- --------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 14.12 $ 10.08 $ 11.96 $ 17.13 ========= ========= ========= ========= Total Return (c) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e) --------- --------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment loss (f) (0.52)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 3,162 $ 1,835 $ 2,069 $ 1,551
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.94% and (1.44)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS C SHARES ENDED JUNE 30, -------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.14 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.05) Net realized and unrealized gain (loss) 1.06 -------------- Total from Investment Operations 1.01 -------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains -- -------------- Total Distributions Declared to Shareholders -- -------------- NET ASSET VALUE, END OF PERIOD $ 15.15 ============== Total Return (c) 7.14%(d)(e) -------------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45%(g) Net investment loss (f) (0.63)%(g) Reimbursement 0.32%(g) Portfolio turnover rate 46%(e) Net assets at end of period (000's) $ 2,094 CLASS C SHARES YEAR ENDED DECEMBER 31, ------------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 10.09 $ 11.97 $ 17.14 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.05) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 4.10 (1.80) (4.90) (0.52) --------- --------- --------- --------- Total from Investment Operations 4.05 (1.88) (5.08) (0.57) --------- --------- --------- --------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- -- (0.08) -- --------- --------- --------- --------- Total Distributions Declared to Shareholders -- -- (0.09) -- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 14.14 $ 10.09 $ 11.97 $ 17.14 ========= ========= ========= ========= Total Return (c) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e) --------- --------- --------- --------- RATIOS TO AVERAGE NET ASSETS Expenses (f) 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment loss (f) (0.41)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.44% 0.33% 0.23% -- Portfolio turnover rate 69% 102% 82% 79%(e) Net assets at end of period (000's) $ 3,691 $ 2,915 $ 3,885 $ 3,399
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.94% and (1.44)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 65 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS CONTINUED
COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, YEAR ENDED DECEMBER 31, ------------- ------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 18.01 $ 13.93 $ 15.17 $ 14.12 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.09) (0.20) (0.16) (0.10) (0.01) Net realized and unrealized gain (loss) 1.38 4.37 (1.08) 1.18 0.86 ------------- --------- --------- --------- -------- Total from Investment Operations 1.29 4.17 (1.24) 1.08 0.85 ------------- --------- --------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains -- (0.09) -- (0.03) (0.19) ------------- --------- --------- --------- -------- Total Distributions Declared to Shareholders -- (0.09) -- (0.03) (0.20) ------------- --------- --------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 19.30 $ 18.01 $ 13.93 $ 15.17 $ 14.12 ============= ========= ========= ========= ======== Total Return (c) 7.16%(d)(e) 29.95% (8.17)%(e) 7.65%(e) 6.32%(d) ------------- --------- --------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses 1.52%(f)(g) 1.63%(f) 1.70%(f) 1.70% 1.61%(f)(g)(h) Net investment loss (0.92)%(f)(g) (1.15)%(f) (1.11)%(f) (0.79)% (0.62)%(f)(g)(h) Reimbursement 0.01%(g) -- 0.10% 0.18% -- Portfolio turnover rate 19%(d) 16% 40% 82% 116%(d) Net assets at end of period (000's) $ 384,079 $ 264,679 $ 31,742 $ 11,900 $ 3,267
(a) Class A Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 0.76% and 0.23% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS B SHARES ENDED JUNE 30, YEAR ENDED DECEMBER 31, ------------- ------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.16) (0.29) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 1.36 4.29 (1.07) 1.18 0.84 ------------- --------- --------- --------- -------- Total from Investment Operations 1.20 4.00 (1.32) 0.98 0.83 ------------- --------- --------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains -- (0.09) -- (0.03) (0.19) ------------- --------- --------- --------- -------- Total Distributions Declared to Shareholders -- (0.09) -- (0.03) (0.20) ------------- --------- --------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 18.84 $ 17.64 $ 13.73 $ 15.05 $ 14.10 ============= ========= ========= ========= ======== Total Return (c) 6.80%(d)(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(d) ------------- --------- --------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses 2.30%(f)(g) 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h) Net investment loss (1.70)%(f)(g) (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h) Reimbursement 0.01%(g) -- 0.10% 0.18% -- Portfolio turnover rate 19%(d) 16% 40% 82% 116%(d) Net assets at end of period (000's) $ 156,718 $ 118,064 $ 33,106 $ 13,358 $ 4,249
(a) Class B Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.41% and (0.42)% respectively, were revised to reflect all class specific expenses in this period.
(UNAUDITED) SIX MONTHS CLASS C SHARES ENDED JUNE 30, YEAR ENDED DECEMBER 31, -------------- ------------- ------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 2001 2000(a) NET ASSET VALUE, BEGINNING OF PERIOD $ 17.64 $ 13.73 $ 15.05 $ 14.10 $ 13.47 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.15) (0.30) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 1.35 4.30 (1.07) 1.18 0.84 ------------- --------- --------- --------- -------- Total from Investment Operations 1.20 4.00 (1.32) 0.98 0.83 ------------- --------- --------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains -- (0.09) -- (0.03) (0.19) ------------- --------- --------- --------- -------- Total Distributions Declared to Shareholders -- (0.09) -- (0.03) (0.20) ------------- --------- --------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 18.84 $ 17.64 $ 13.73 $ 15.05 $ 14.10 ============= ========= ========= ========= ======== Total Return (c) 6.80%(d)(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(d) ------------- --------- --------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses 2.25%(f)(g) 2.28%(f) 2.35%(f) 2.35% 2.26%(f)(g)(h) Net investment loss (1.65)%(f)(g) (1.80)%(f) (1.76)%(f) (1.44)% (1.27)%(f)(g)(h) Reimbursement 0.01%(g) -- 0.10% 0.18% -- Portfolio turnover rate 19%(d) 16% 40% 82% 116%(d) Net assets at end of period (000's) $ 89,703 $ 64,212 $ 10,919 $ 4,945 $ 1,070
(a) Class C Shares were initially offered on October 16, 2000. Per share data reflects activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) The ratios of expenses and net investment loss to average net assets, previously reported as 1.41% and (0.42)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements 66 1-800-922-6769 COLUMBIA ACORN FAMILY OF FUNDS > NOTES TO FINANCIAL STATEMENTS, (UNAUDITED) 1. Nature of Operations Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select (the "Funds") are series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of each Fund is to seek long-term growth of capital. The Funds may issue an unlimited number of shares. The Funds offer four classes of shares: Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") is assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a CDSC. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a CDSC on redemptions made 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. Generally, you may exchange your Class Z or Class A shares of the Fund for shares of another fund at no additional charge. However, if you exchange Class Z shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less for Class Z shares of a fund distributed by Columbia Funds Distributor, Inc., that does not have a redemption fee (including Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a redemption fee of 2% of the redemption proceeds. Exchanges between Columbia Acorn International and Columbia Acorn International Select (or a fund distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will not be subject to the 2% redemption fee. In addition, if you redeem shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less, the Fund will charge you a redemption fee of 2% of redemption proceeds, with certain exceptions. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. The financial highlights for Class Z shares are presented in a separate semi-annual report. The semi-annual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begins on page 73 of this report. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are borne pro rata on the basis of the relative net assets of all classes, except each class bears certain expenses unique to that class such as distribution services, transfer agent, and certain other class specific expenses. Differences in class expenses may result in payment of different dividend distributions for each class. All the share classes of the Trust have equal rights with respect to voting subject to class specific arrangements. 2. Significant Accounting Policies >Security valuation Securities of the Funds are valued at marked value or, if a market quotation for a security is not readily available or is deemed not to be reliable because of events or circumstances that have occurred between the market quotation and the time as of which the security is to be valued, the security is valued at a fair value determined in accordance with procedures established by the Board of Trustees. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation. If a security is traded principally on the Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied. Securities for which there are no reported sales on the valuation date are valued at the latest bid quotation. Short-term debt obligations having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. Securities for which quotations are not available are valued at a fair value as determined in good faith by the Board of Trustees. The Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation. If a security is valued at a "fair value", that value is likely to be different from the last quoted market price for the security. 67 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED >Repurchase agreements The Funds may engage in repurchase agreement transactions. The Funds, through their custodians, receive delivery of underlying securities collateralizing repurchase agreements. The Funds' investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. >Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Funds. Interest income is recorded on the accrual basis and includes amortization of discounts on short-term debt obligations and long-term debt obligations when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains. The Funds estimate components of distributions from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Results of operations for the year reflect a change in estimate of these components using more current tax reporting received from REIT investments. The change in estimate had no impact on each of the Fund's net assets. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Financial instruments Each Fund may purchase or sell exchange-traded financial futures contracts, which are contracts that obligate that Fund to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Funds enter into such contracts to hedge a portion of their portfolio. Gains and losses are reflected as "Net Realized Gain (Loss) on Futures" in the Statements of Operations. Additionally, each Fund, except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio hedging with respect to changes in foreign currency exchange rates by entering into forward foreign currency contracts to purchase or sell foreign currencies. The Statements of Operations reflect gains and losses as realized for closed forward foreign currency contracts and unrealized for open contracts. The Funds bear the market risk that arises from changes in the value of financial instruments and securities indices (futures contracts) or from changes in foreign currency rates (forward foreign currency contracts) and the credit risk should a counterparty fail to perform under such contracts. None of the Funds entered into any futures contracts or forward foreign currency contracts during the six months ended June 30, 2004. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than the Class A, Class B and Class C 12b-1 service and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and realized and unrealized gains (losses) of a fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. Redemption fees are allocated to paid-in-capital of each class proportionately for the purposes of determining net asset value of each class. 68 1-800-922-6769 >Custody fees Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. >Federal income taxes The Funds have complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distribute all their taxable income, as well as any net realized gain on sales of investments and foreign currency transactions reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Foreign capital gains taxes Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 30%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction. >Distributions to shareholders Distributions to shareholders are recorded on the ex-date. 3. FEDERAL TAX INFORMATION The tax character of distributions paid during the year ended December 31, 2003 was as follows: LONG- TERM ORDINARY CAPITAL DECEMBER 31, 2003 INCOME GAINS ----------------- ------------- ------------- (IN THOUSANDS) Columbia Acorn Fund $ -- $ 9,917 Columbia Acorn International 5,935 -- Columbia Acorn USA -- -- Columbia Acorn International Select 19 -- Columbia Acorn Select 736 3,445 For the year ended December 31, 2003, the following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: COLUMBIA COLUMBIA YEAR OF ACORN ACORN EXPIRATION INTERNATIONAL USA ---------- ------------- ------------- (IN THOUSANDS) 2009 $ 111,479 $ 3,035 2010 76,335 10,064 2011 48,476 -- ------------- ------------- TOTAL $ 236,290 $ 13,099 COLUMBIA ACORN YEAR OF INTERNATIONAL EXPIRATION SELECT ---------- ------------- (IN THOUSANDS) 2009 $ 23,084 2010 12,528 2011 2,488 ------------- TOTAL $ 38,100 Columbia Acorn Fund and Columbia Acorn International have elected to mark-to-market their investments in Passive Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's are treated as ordinary income for federal income tax purposes. A summary of transactions relating to PFIC's is as follows (in thousands): COLUMBIA ACORN FUND ------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 409 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 -- Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (409) ------------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ -- ------------- COLUMBIA ACORN INTERNATIONAL ---------------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 7,225 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 1,215 Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (7,225) ------------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ 1,215 ------------- 4. TRANSACTIONS WITH AFFILIATES Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Bank of America Corporation ("BOA") furnishes continuing investment supervision to the Funds and is responsible for the overall management of the Funds' business affairs. Prior to April 1, 2004, Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA. 69 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rates shown in the table below for each fund. COLUMBIA ACORN FUND -------------------------------------------------------------------------------- Net asset value: On the first $700 million 0.75% Next $1.3 billion 0.70% Net assets in excess of $2 billion 0.65% COLUMBIA ACORN INTERNATIONAL -------------------------------------------------------------------------------- Net asset value: On the first $100 million 1.20% Next $400 million 0.95% Net assets in excess of $500 million 0.75% COLUMBIA ACORN USA -------------------------------------------------------------------------------- Net asset value: On the first $200 million 0.95% Net assets in excess of $200 million 0.90% COLUMBIA ACORN INTERNATIONAL SELECT -------------------------------------------------------------------------------- On average daily net assets: 0.95% COLUMBIA ACORN SELECT -------------------------------------------------------------------------------- On average daily net assets: 0.90% Effective August 1, 2004: Net asset value: On the first $700 million 0.90% Net assets in excess of $700 million 0.85% >Expense Limit Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses (exclusive of 12b-1 service and distribution fees, interest, taxes and extraordinary expenses, if any) exceeding 1.45% of the average annual net assets for Columbia Acorn International Class A, Class B and Class C shares and 1.35% of the average annual net assets for Columbia Acorn Select Class A, Class B and Class C shares. Columbia WAM also provides administrative services to each Fund at an annual rate of 0.05% of average daily net assets. Effective August 1, 2004 Columbia WAM will receive an administration fee from the Funds, based on average daily net assets of the Trust, at the following annual rates: COLUMBIA ACORN TRUST -------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net assets in excess of $16 billion 0.03% Columbia Funds Distributor, Inc. ("CFDI"), an indirect wholly-owned subsidiary of BOA, is the Funds' principal underwriter and receives no compensation on the sale of Class Z shares. For the six months ended June 30, 2004, Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select have been advised that CFDI retained $669,879 in underwriting discounts on the sale of Class A shares and received CDSCs of $16,312, $1,457,101, $109,925, respectively, on Class A, Class B and Class C share redemptions. Each Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly service fee equal to 0.25% annually of the average daily net assets attributable to Class A, Class B and Class C shares. The 12b-1 plan also requires each Fund to pay CFDI a monthly distribution fee equal to 0.10%, 0.75% and 0.75%, annually, of the average daily net assets attributable to Class A, Class B and Class C shares, respectively. Effective August 1, 2004, each Fund's Class A share 12b-1 fee was reduced to 25 basis points, resulting in the elimination of the 10 basis point distribution fee on Class A shares. In addition, each Fund's 12b-1 fee for Class B shares was reduced from 100 basis points to 85 basis points, decreasing the distribution portion of the 12b-1 fee to 60 basis points. Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly-owned subsidiary of BOA, provides shareholder services to the Funds. 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. Effective February 1, 2004 the Transfer Agent made the decision to waive the reimbursement for certain out-of-pocket expenses. Prior to February 1, 2004, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.07% of the average daily net assets attributable to Class A, Class B and Class C shares plus flat-rate charges based on the number of shareholder accounts and transactions. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for the six months ended June 30, 2004 were as follows, including each Fund's portion of a special payment 70 1-800-922-6769 to the chairman of the board of $25,000 for extraordinary time and effort spent on board matters during 2003: -------------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 209 Columbia Acorn International 34 Columbia Acorn USA 13 Columbia Acorn International Select 3 Columbia Acorn Select 8 ================================================================================ The Trust provides a deferred compensation plan for its trustees. Under that plan, a trustee may elect to defer all or a portion of his or her compensation. Amounts deferred are retained by the Trust and represent an unfunded obligation of the Trust. The value of amounts deferred is determined by reference to the change in value of Class Z shares of one or more series of the Trust or a money market fund as specified by the trustee. Benefits under the deferred compensation plan are payable upon retirement. An affiliate may include any company in which a fund owns five percent or more of its outstanding voting securities. On June 30, 2004, Columbia Acorn Fund and Columbia Acorn USA each held five percent or more of the outstanding voting securities of one or more companies. Details of investments in those affiliated companies are presented on pages 33 and 47, respectively. During the six months ended June 30, 2004, the Funds engaged in purchase and sale transactions with funds that have a common investment advisor (or affiliated investment advisors), common Directors/Trustees, and/or common Officers. Those transactions complied with Rule 17a-7 under the Investment Company Act of 1940 and were as follows: FUNDS PURCHASES SALES -------------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 27,980 $ 741 Columbia Acorn International 3,657 13,528 Columbia Acorn USA -- 1,111 Columbia Acorn International Select 608 4,794 Columbia Acorn Select -- -- 5. BORROWING ARRANGEMENTS The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the six months ended June 30, 2004. 6. INVESTMENT TRANSACTIONS The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2004 were: COLUMBIA ACORN FUND -------------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 1,694,313 Proceeds from sales 1,235,992 ================================================================================ COLUMBIA ACORN INTERNATIONAL -------------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 414,826 Proceeds from sales 486,377 ================================================================================ COLUMBIA ACORN USA -------------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 74,090 Proceeds from sales 78,807 ================================================================================ COLUMBIA ACORN INTERNATIONAL SELECT -------------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 19,664 Proceeds from sales 20,833 ================================================================================ COLUMBIA ACORN SELECT -------------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 296,012 Proceeds from sales 153,883 ================================================================================ 7. LEGAL PROCEEDINGS The Securities and Exchange Commission (the "SEC"), the New York Attorney General (the "NYAG") and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include CFDI, Columbia Management Advisors, Inc. ("CMA"), and Columbia WAM. CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where any of its affiliates were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the SEC filed a civil complaint in the United States District Court for the District of Massachusetts against CFDI and CMA, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund 71 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED shares. Also on February 24, 2004, the NYAG filed a civil complaint in New York Supreme Court, County of New York against CFDI and CMA alleging that CFDI and CMA had violated certain New York anti-fraud statutes. Both complaints are based on arrangements between 1998 and 2003 with nine investors for the trading of mutual fund shares. Neither complaint was filed against Columbia WAM nor the Columbia Acorn Family of Funds. However, the complaints against CFDI and CMA identified Columbia Acorn Fund, Columbia Acorn International and Columbia Acorn International Select as funds in which one or more of the nine investors invested. If either CFDI or CMA were unsuccessful in its defense of those proceedings, it could be barred from serving as a distributor or investment adviser for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"), which could prevent CFDI from serving as the Funds' distributor and could affect the ability of an affiliated person of CFDI or CMA to serve as a distributor or investment adviser for any registered investment company. The Funds have been informed by CFDI that, in such a situation, it will seek exemptive relief from the SEC to permit it to continue to serve as the Funds' distributor. There is no assurance that such exemptive relief would be granted. On March 15, 2004, CFDI and CMA entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, CFDI and CMA agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring CFDI and CMA to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and fiduciary duties; and retention of an independent consultant to review CFDI's and CMA's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, Columbia has agreed to reduce mutual fund fees by $80 million over a five-year period. The Trust and Columbia WAM are defendants in several derivative and class action lawsuits that allege, in summary, defendants permitted investors to engage in improper trading of shares of various funds in violation of certain federal and state laws. The Trust and Columbia WAM are also defendants in a class action lawsuit that alleges, in summary, that the Trust and Columbia WAM exposed shareholders of Columbia Acorn International Fund to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of that Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement the Fund's portfolio valuation and share pricing policies and procedures; and (c) failing to know and implement applicable rules and regulations concerning the calculation of NAV (the "Fair Valuation Lawsuit"). All of these lawsuits have been transferred to a federal court in Maryland, where they will be consolidated with similar suits in a Multi-District Litigation proceeding. The Trust and Columbia WAM are defendants in a class action lawsuit in Illinois state court similar to the Fair Valuation Lawsuit. Lastly, Columbia WAM is also defendant in a lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments to brokers as an incentive for the brokers to market the Funds over other mutual funds to investors. The complaint alleges Columbia WAM breached certain common law duties and federal laws. The Trust and Columbia WAM intend to defend these suits vigorously. The Trust does not believe that the pending actions will have a material adverse effect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse effect on its ability to perform under its contracts with the Funds. 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. In connection with the events described in detail above, various parties have filed suit against certain funds, their Boards and/or Fleet (and affiliated entities). These suits and certain regulatory investigations are ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. For the six months ended June 30, 2004, CMG has assumed consulting services and fees incurred by the Funds in connection with these matters as follows: -------------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 135 Columbia Acorn International 20 Columbia Acorn USA 8 Columbia Acorn International Select 1 Columbia Acorn Select 10 ================================================================================ 72 1-800-922-6769 COLUMBIA THERMOSTAT FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- >BOND FUNDS: 49.8% 5,107 Columbia Intermediate Bond Fund, Class Z $ 45,657 2,604 Columbia Federal Securities Fund, Class Z 27,416 2,146 Columbia High Yield Fund, Class Z 18,221 ---------------------------------------------------------------------------- TOTAL BOND FUNDS (COST: $92,408) 91,294 >STOCK FUNDS: 49.7% 2,519 Columbia Growth Stock Fund, Class Z (b) 22,745 1,345 Columbia Growth & Income Fund, Class Z 22,736 746 Columbia Acorn Fund, Class Z 18,320 525 Columbia Mid-Cap Value Fund, Class Z (b) 13,694 699 Columbia Acorn Select, Class Z (b) 13,670 ---------------------------------------------------------------------------- TOTAL STOCK FUNDS (COST: $78,577) 91,165 >SHORT-TERM OBLIGATIONS: 0.5% $ 1,008 Repurchase Agreement with State Street Bank & Trust, Co. Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation, Notes, Maturing 2/15/05, Market Value $1,031 (Repurchase proceeds: $1,008) 1,008 ---------------------------------------------------------------------------- (COST: $1,008) 1,008 ------------- TOTAL INVESTMENTS: 100.0% 183,467 (COST: $171,993) (a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.0%) (55) ------------- TOTAL NET ASSETS: 100% $ 183,412 ============================================================================ >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $11,474 consisting of gross unrealized appreciation of $12,704 and gross unrealized depreciation of $1,230. 73 COLUMBIA THERMOSTAT FUND >STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2004 ------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS Investments, at value (cost: $171,993) $ 183,467 Receivable for: Investments sold 463 Fund shares sold 1,023 Dividends and interest 347 Expense reimbursement due from Advisor 30 Other Assets 3 ---------------- Total Assets 185,333 LIABILITIES Payable for: Investments purchased 789 Fund shares redeemed 991 Transfer agent fees 16 Custody fees 4 Registration & blue sky fees 14 12b-1 Service & Distribution fees 100 Legal & audit fees 7 ---------------- Total Liabilities 1,921 ---------------- NET ASSETS $ 183,412 ================ COMPOSITION OF NET ASSETS Paid in capital $ 170,738 Undistributed net investment income 1,244 Accumulated net realized loss (44) Net unrealized appreciation on investments 11,474 ---------------- NET ASSETS $ 183,412 ================ Net asset value per share -- Class A (a) $ 12.61 (Net assets/shares) ($67,687/5,370) Maximum offering price per share -- Class A (b) $ 13.38 (Net asset value per share/front-end sales charge) ($12.61/0.9425) Net asset value and offering price per share -- Class B (a) $ 12.58 (Net assets/shares) ($69,753/5,543) Net asset value and offering price per share -- Class C (a) $ 12.58 (Net assets/shares) ($28,944/2,300) Net asset value, offering and redemption price per share -- Class Z $ 12.63 (Net assets/shares) ($17,028/1,348) (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. 74 1-800-922-6769 COLUMBIA THERMOSTAT FUND >STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 (IN THOUSANDS) ---------------------------------------------------------------------------- INVESTMENT INCOME: Dividends from investment company shares $ 1,947 Interest income 5 ------------- Total Investment Income 1,952 EXPENSES: Management fee 80 Administration fee 40 12b-1 Service and Distribution fees: Class A 98 Class B 312 Class C 127 Transfer agent fees: Class A 46 Class B 70 Class C 25 Class Z 15 Trustees fees 1 Custody fees 12 Registration & blue sky fees 59 Legal & audit fees 14 Non-recurring costs (See Note 7) 2 Other expenses 27 ------------- Total expenses 928 Less custody fees paid indirectly --* Less fees waived by Distributor (28) Less reimbursement of expenses by Advisor (190) Non-recurring costs reimbursed (See Note 7) (2) ------------- Net Expenses 708 ------------- Net Investment Income 1,244 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on: Investments (28) Distributions from investment company shares 23 ------------- Net realized loss (5) ------------- Net change in net unrealized appreciation on investments 2,195 ------------- Net realized and unrealized gain 2,190 ------------- Net Increase in Net Assets resulting from Operations $ 3,434 ============= *Rounds to less than $500. See accompanying notes to financial statements. 75 COLUMBIA THERMOSTAT FUND >STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED) SIX MONTHS YEAR ENDED INCREASE IN NET ASSETS ENDED JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------ (IN THOUSANDS) 2004 2003 (a) OPERATIONS: Net investment income $ 1,244 $ 696 Net realized gain (loss) on investments and distributions from investment company shares (5) 272 Net change in net unrealized appreciation on investments 2,195 9,219 -------------- ------------ Net Increase from Operations 3,434 10,187 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- (395) Net realized gain -- Class A (89) (21) Net investment income -- Class B -- (108) Net realized gain -- Class B (94) (30) Net investment income -- Class C -- (43) Net realized gain -- Class C (40) (10) Net investment income -- Class Z -- (160) Net realized gain -- Class Z (22) (14) -------------- ------------ Total Distributions to Shareholders (245) (781) SHARE TRANSACTIONS: Subscriptions -- Class A 27,577 40,815 Distributions reinvested -- Class A 80 373 Redemptions -- Class A (3,455) (1,441) -------------- ------------ Net Increase -- Class A 24,202 39,747 Subscriptions -- Class B 20,217 48,741 Distributions reinvested -- Class B 86 125 Redemptions -- Class B (3,207) (1,176) -------------- ------------ Net Increase -- Class B 17,096 47,690 Subscriptions -- Class C 9,956 19,668 Distributions reinvested -- Class C 34 44 Redemptions -- Class C (1,584) (1,015) -------------- ------------ Net Increase -- Class C 8,406 18,697 Subscriptions -- Class Z 4,377 9,094 Distributions reinvested -- Class Z 22 166 Redemptions -- Class Z (1,809) (1,023) -------------- ------------ Net Increase -- Class Z 2,590 8,237 -------------- ------------ Net Increase from Share Transactions 52,294 114,371 -------------- ------------ Total Increase in Net Assets 55,483 123,777 -------------- ------------ NET ASSETS: Beginning of period 127,929 4,152 -------------- ------------ End of period $ 183,412 $ 127,929 ============== ============ UNDISTRIBUTED NET INVESTMENT INCOME $ 1,244 $ -- ============== ============
(a) Class A, Class B and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. See accompanying notes to financial statements. 76 1-800-922-6769
(UNAUDITED) SIX MONTHS PERIOD ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------ (IN THOUSANDS) 2004 2003 (a) Subscriptions -- Class A 2,219 3,529 Shares issued in reinvestment and capital gains -- Class A 7 31 Less shares redeemed -- Class A (293) (123) -------------- ------------ Net increase -- Class A 1,933 3,437 Subscriptions -- Class B 1,614 4,268 Shares issued in reinvestment and capital gains -- Class B 7 10 Less shares redeemed -- Class B (257) (99) -------------- ------------ Net increase -- Class B 1,364 4,179 Subscriptions -- Class C 793 1,712 Shares issued in reinvestment and capital gains -- Class C 3 4 Less shares redeemed -- Class C (127) (85) -------------- ------------ Net increase -- Class C 669 1,631 Subscriptions -- Class Z 349 821 Shares issued in reinvestment and capital gains -- Class Z 2 14 Less shares redeemed -- Class Z (146) (91) -------------- ------------ Net increase -- Class Z 205 744 -------------- ------------ Net increase in Shares of Beneficial Interest 4,171 9,991 -------------- ------------
(a) Class A, Class B and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. See accompanying notes to financial statements. 77 COLUMBIA THERMOSTAT FUND >FINANCIAL HIGHLIGHTS
(UNAUDITED) INCEPTION SIX MONTHS MARCH 3, 2003 ENDED THROUGH CLASS A SHARES JUNE 30, DECEMBER 31, -------------- ------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 12.30 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.12 0.18 Net realized and unrealized gain 0.21 2.15 -------------- ------------- Total from Investment Operations 0.33 2.33 -------------- ------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.13) From net realized gains (0.02) (0.00)(b) -------------- ------------- Total Distributions Declared to Shareholders (0.02) (0.13) -------------- ------------- NET ASSET VALUE, END OF PERIOD $ 12.61 $ 12.30 ============== ============= Total Return (c)(d)(e) 2.66% 23.10% -------------- ------------- RATIOS TO AVERAGE NET ASSETS Expenses (f)(g)(h) 0.50% 0.57% Net investment income (g)(h) 1.95% 1.86% Reimbursement (h) 0.31% 0.66% Portfolio turnover rate 32%(e) 61% Net assets at end of period (000's) $ 67,687 $ 42,271
(a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) Does not include expenses of the investment companies in which the Fund invests. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized.
(UNAUDITED) INCEPTION SIX MONTHS MARCH 3, 2003 ENDED THROUGH CLASS B SHARES JUNE 30, DECEMBER 31, -------------- ------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 12.32 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.07 0.10 Net realized and unrealized gain 0.21 2.16 -------------- ------------- Total from Investment Operations 0.28 2.26 -------------- ------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.04) From net realized gains (0.02) (0.00)(b) -------------- ------------- Total Distributions Declared to Shareholders (0.02) (0.04) -------------- ------------- NET ASSET VALUE, END OF PERIOD $ 12.58 $ 12.32 ============== ============= Total Return (c)(d)(e) 2.25% 22.38% -------------- ------------- RATIOS TO AVERAGE NET ASSETS Expenses (f)(g)(h) 1.25% 1.32% Net investment income (g)(h) 1.20% 1.06% Reimbursement (h) 0.27% 0.66% Portfolio turnover rate 32%(e) 61% Net assets at end of period (000's) $ 69,753 $ 51,501
(a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) Does not include expenses of the investment companies in which the Fund invests. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized.
(UNAUDITED) INCEPTION SIX MONTHS MARCH 3, 2003 ENDED THROUGH CLASS C SHARES JUNE 30, DECEMBER 31, -------------- ------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 12.32 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.07 0.11 Net realized and unrealized gain 0.21 2.15 -------------- ------------- Total from Investment Operations 0.28 2.26 -------------- ------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.04) From net realized gains (0.02) (0.00)(b) -------------- ------------- Total Distributions Declared to Shareholders (0.02) (0.04) NET ASSET VALUE, END OF PERIOD $ 12.58 $ 12.32 ============== ============= Total Return (c)(d)(e) 2.25% 22.38% -------------- ------------- RATIOS TO AVERAGE NET ASSETS Expenses (f)(g)(h) 1.25% 1.32% Net investment income (g)(h) 1.20% 1.10% Reimbursement (h) 0.24% 0.66% Portfolio turnover rate 32%(e) 61% Net assets at end of period (000's) $ 28,944 $ 20,087
(a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) Does not include expenses of the investment companies in which the Fund invests. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. See accompanying notes to financial statements. 78 1-800-922-6769 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust, commenced operations September 25, 2002. The Fund may issue an unlimited number of shares. The Fund currently offers four classes of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was redesignated Class C. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") may be assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a CDSC. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a CDSC on redemptions made 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. The financial highlights for Class Z shares are presented in a separate semi-annual report. The semi-annual report for the other series of the Trust is also included in this report. The investment objective of the Fund is to provide long-term total return. The Fund pursues its investment objective by investing in shares of other mutual funds. As a `fund of funds', under normal circumstances, the Fund allocates at least 95% of its net assets among a selected group of stock and bond mutual funds (the "Portfolio Funds") according to the current level of the Standard & Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's investment adviser. As of June 30, 2004, the Fund invested in five stock Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia Growth & Income Fund, Columbia Mid-Cap Value Fund and Columbia Growth Stock Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia Intermediate Bond Fund and Columbia High-Yield Fund). The Fund may also invest up to 5% of its net assets plus any cash received that day in cash, repurchase agreements, high quality short-term paper and government securities. 2. Significant Accounting Policies >Security valuation Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. High quality short-term paper and government securities having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. >Repurchase agreements The Fund may engage in repurchase agreement transactions. The Fund, through its custodian, receives delivery of underlying securities collateralizing each repurchase agreement. The Fund's investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Security transactions and investment income Portfolio Fund transactions are accounted for on the trade date (date the order to buy or sell is executed). Dividend income and realized gain distributions from other funds are recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts on short-term debt obligations when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the applicable securities, the proceeds are recorded as realized gains. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than Class A, Class B and Class C 12b-1 service and distribution fees, and Class A, Class B, Class C and Class Z Transfer Agent fees) and realized and 79 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED unrealized gains (losses) of the Fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. >Custody fees The custody fees are reduced based on the Fund's cash balance maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. >Federal income taxes The Fund has complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distributes all of its taxable income, as well as any net realized gain on sales of Portfolio Fund shares and any distributions of net realized gains received by the Fund from its Portfolio Funds, reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. FEDERAL TAX INFORMATION The tax character of distributions paid during the year ended December 31, 2003 was as follows: ORDINARY LONG-TERM INCOME CAPITAL GAINS -------------------------------------------------------------------------------- (IN THOUSANDS) $ 771 $ 10 4. TRANSACTIONS WITH AFFILIATES Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Bank of America Corporation ("BOA") furnishes continuing investment supervision to the Fund and is responsible for the overall management of the Fund's business affairs. Prior to April 1, 2004, Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA. Under the Fund's investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's average daily net assets. >Expense Limit Columbia WAM has agreed to voluntarily reimburse the direct operating expenses (exclusive of 12b-1 service and distribution fees, interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.60% of the average annual net assets of the Fund's Class A, Class B and Class C shares. Effective August 1, 2003, Columbia WAM agreed to contractually reimburse the direct operating expenses (exclusive of 12b-1 service and distribution fees, interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.25% of the average annual net assets of the Fund's Class A, Class B and Class C shares. Columbia WAM also provides administrative services to the Fund at an annual rate of 0.05% of average daily net assets. Effective August 1, 2004 Columbia WAM will receive an administration fee from the Fund, based on the average daily net assets of the Trust, at the following annual rates: COLUMBIA ACORN TRUST -------------------------------------------------------------------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net assets in excess of $16 billion 0.03% Columbia Funds Distributor, Inc. ("CFDI"), an indirect wholly-owned subsidiary of BOA, is the Fund's principal underwriter and receives no compensation on the sale of Class Z shares. For the six months ended June 30, 2004, the Fund has been advised that CFDI retained $108,017 in underwriting discounts on the sale of Class A shares and received CDSCs of $34, $71,173 and $6,621 on Class A, Class B and Class C share redemptions, respectively. The Fund has adopted a 12b-1 plan which requires it to pay CFDI a monthly service fee equal to 0.25% annually, of the average daily net assets attributable to Class A, Class B and Class C shares. The 12b-1 plan also requires the Fund to pay CFDI a monthly distribution fee equal to 0.10%, 0.75%, 0.75%, annually, of the average daily net asset attributable to Class A, Class B and Class C shares, respectively. For Class A shares the Fund may pay distribution and service fees up to a maximum of 0.35% annually of the Fund's average daily net assets (comprised of up to 0.10% for distribution services and up to 0.25% for shareholder liaison services) 80 1-800-922-6769 but will limit such fees to an aggregate of not more than 0.25% during the current fiscal year. Effective August 1, 2004, the Fund's Class A share 12b-1 fee was reduced to 25 basis points, resulting in the elimination of the 10 basis point distribution fee on Class A shares. In addition, the Fund's 12b-1 fee for Class B shares was reduced from 100 basis points to 85 basis points, decreasing the distribution portion of the 12b-1 fee to 60 basis points. Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly-owned subsidiary of BOA, provides shareholder services to the Fund. 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. Effective February 1, 2004 the Transfer Agent made the decision to waive the reimbursement for certain out-of-pocket expenses. Prior to February 1, 2004, the Transfer Agent was entitled to receive a monthly transfer agent fee at the annual rate of 0.07% of the average daily net assets attributable to Class A, Class B and Class C shares plus flat-rate charges based on the number of shareholder accounts and transactions. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for the six months ended June 30, 2004, including the Fund's portion of a special payment to the chairman of the board of $25,000 for extraordinary time and effort spent on board matters during 2003, were $1,240. 5. BORROWING ARRANGEMENTS The Trust participates in a $150,000,000 credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the six months ended June 30, 2004. 6. INVESTMENT TRANSACTIONS The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2004 were: (IN THOUSANDS) -------------------------------------------------------------------------------- Purchases $ 103,922 Proceeds from sales $ 50,510 ================================================================================ 7. LEGAL PROCEEDINGS The Securities and Exchange Commission (the "SEC"), the New York Attorney General (the "NYAG") and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include CFDI, Columbia Management Advisors, Inc. ("CMA"), and Columbia WAM. CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where any of its affiliates were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the SEC filed a civil complaint in the United States District Court for the District of Massachusetts against CFDI and CMA, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the NYAG filed a civil complaint in New York Supreme Court, County of New York against CFDI and CMA alleging that CFDI and CMA had violated certain New York anti-fraud statutes. Both complaints are based on arrangements between 1998 and 2003 with nine investors for the trading of mutual fund shares. Neither complaint was filed against Columbia WAM nor the Columbia Acorn Family of Funds. However, the complaints against CFDI and CMA identified Columbia Acorn Fund, Columbia Acorn International and Columbia Acorn International Select as funds in which one or more of the nine investors invested. If either CFDI or CMA were unsuccessful in its defense of those proceedings, it could be barred from serving as a distributor or investment adviser for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"), which could prevent CFDI from serving as the Fund's distributor and could affect the ability of an affiliated person of CFDI or CMA to serve as a distributor or investment adviser for any registered investment company. The Funds have been informed by CFDI that, in such a situation, it will seek exemptive relief from the SEC to permit it to continue to serve as the Fund's 81 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED distributor. There is no assurance that such exemptive relief would be granted. On March 15, 2004, CFDI and CMA entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, CFDI and CMA agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring CFDI and CMA to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and fiduciary duties; and retention of an independent consultant to review CFDI's and CMA's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, Columbia has agreed to reduce mutual fund fees by $80 million over a five-year period. The Trust and Columbia WAM are defendants in several derivative and class action lawsuits that allege, in summary, defendants permitted investors to engage in improper trading of shares of various funds in violation of certain federal and state laws. The Trust and Columbia WAM are also defendants in a class action lawsuit that alleges, in summary, that the Trust and Columbia WAM exposed shareholders of Columbia Acorn International Fund to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of that Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement the Fund's portfolio valuation and share pricing policies and procedures; and (c) failing to know and implement applicable rules and regulations concerning the calculation of NAV (the "Fair Valuation Lawsuit"). All of these lawsuits have been transferred to a federal court in Maryland, where they will be consolidated with similar suits in a Multi-District Litigation proceeding. The Trust and Columbia WAM are defendants in a class action lawsuit in Illinois state court similar to the Fair Valuation Lawsuit. Lastly, Columbia WAM is also defendant in a lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments to brokers as an incentive for the brokers to market the Funds over other mutual funds to investors. The complaint alleges Columbia WAM breached certain common law duties and federal laws. The Trust and Columbia WAM intend to defend these suits vigorously. The Trust does not believe that the pending actions will have a material adverse effect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse effect on its ability to perform under its contracts with the Funds. 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 Fund. In connection with the events described in detail above, various parties have filed suit against certain funds, their Boards and/or Fleet (and affiliated entities). These suits and certain regulatory investigations are ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. For the six months ended June 30, 2004, CMG has assumed $1,830 consulting services and fees incurred by the Fund in connection with these matters. 82 1-800-922-6769 CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Effective April 13, 2004, the audit committee of the Trust requested that Ernst & Young LLP ("E&Y") resign as the auditors of the Funds. Also effective July 14, 2004, upon the recommendation of the audit committee, the Trust selected PricewaterhouseCoopers LLP ("PWC") as independent registered public accounting firm to audit the books and records of each Fund for its fiscal year ending December 31, 2004. The cessation of the relationship with E&Y was based on the impairment of E&Y's independence resulting from the consummation of the merger of FleetBoston Financial Corporation and Bank of America Corporation and accordingly, E&Y's ability to provide audit services to the Funds. E&Y's report on the financial statements of each Fund for the past two years did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period E&Y was engaged, there were no disagreements with E&Y on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to E&Y's satisfaction, would have caused it to make reference to that matter in connection with its report. 83 COLUMBIA ACORN FAMILY OF FUNDS CLASS A, B AND C SHARE INFORMATION MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN INTERNATIONAL SELECT, COLUMBIA ACORN SELECT, COLUMBIA THERMOSTAT FUND $ 1,000 $ 1,000 FOR AN IRA MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN FUND AND COLUMBIA ACORN USA $ 50,000 MINIMUM SUBSEQUENT INVESTMENT $ 50 EXCHANGE FEE NONE COLUMBIA ACORN FUND CLASS A CLASS B CLASS C Management Fees 0.66% 0.66% 0.66% Distribution and Service (12b-1) Fees 0.35% 1.00% 1.00% Other Expenses 0.24% 0.33% 0.30% ------- ------- ------- Expense Ratio 1.25% 1.99% 1.96% COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C Management Fees 0.82% 0.82% 0.82% Distribution and Service (12b-1) Fees 0.35% 1.00% 1.00% Other Expenses 0.33% 0.50% 0.38% ------- ------- ------- Expense Ratio 1.50% 2.32% 2.20% COLUMBIA ACORN USA CLASS A CLASS B CLASS C Management Fees 0.91% 0.91% 0.91% Distribution and Service (12b-1) Fees 0.35% 1.00% 1.00% Other Expenses 0.27% 0.36% 0.30% ------- ------- ------- Expense Ratio 1.53% 2.27% 2.21% COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C Management Fees 0.95% 0.95% 0.95% Distribution and Service (12b-1) Fees 0.35% 1.00% 1.00% Other Expenses 0.50% 0.50% 0.50% ------- ------- ------- Expense Ratio 1.80% 2.45% 2.45% COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C Management Fees 0.90% 0.90% 0.90% Distribution and Service (12b-1) Fees 0.35% 1.00% 1.00% Other Expenses 0.27% 0.40% 0.35% ------- ------- ------- Expense Ratio 1.52% 2.30% 2.25% COLUMBIA THERMOSTAT* CLASS A CLASS B CLASS C Management Fees 0.10% 0.10% 0.10% Distribution and Service (12b-1) Fees 0.25% 1.00% 1.00% Other Expenses 0.15% 0.15% 0.15% ------- ------- ------- Expense Ratio 0.50% 1.25% 1.25% Fees and expenses are for the six months ended June 30, 2004 and for Columbia Acorn International Select and Columbia Thermostat Fund include the effect of Columbia Wanger Asset Management's undertaking to reimburse those funds for any ordinary operating expenses, exclusive of 12b-1 service and distribution fees, interest, taxes and extraordinary expenses, if any, exceeding 1.45% and 0.25% of their average net assets, respectively. The expense limitation for Columbia Acorn International Select is voluntary and can be terminated by either the Fund or Columbia Wanger Asset Management, L.P. on 30 days' notice. Columbia Thermostat Fund's reimbursement arrangement is contractual through April 30, 2005. The Fund's adviser and/or affiliates have contractually agreed to waive a portion of "other expenses" through April 30, 2005. Effective August 1, 2004, each Fund's Class A share 12b-1 fee was reduced to 25 basis points, resulting in the elimination of the 10 basis point distribution fee on Class A shares. In addition, each Fund's 12b-1 fee for Class B shares was reduced from 100 basis points to 85 basis points, decreasing the distribution portion of the 12b-1 fee to 60 basis points. * Expenses for Columbia Thermostat do not include estimated fees and expenses of 0.94% incurred by the Fund from the underlying portfolio funds. 84 1-800-922-6769 This page intentionally left blank. This page intentionally left blank. This page intentionally left blank. COLUMBIA ACORN -------------------------------------------------------------------------------- FAMILY OF FUNDS TRUSTEES Robert E. Nason CHAIRMAN Margaret Eisen Leo A. Guthart Jerome Kahn, Jr. Steven N. Kaplan David C. Kleinman Charles P. McQuaid Allan B. Muchin Ralph Wanger John A. Wing OFFICERS Charles P. McQuaid PRESIDENT Ben Andrews VICE PRESIDENT Michael G. Clarke ASSISTANT TREASURER J. Kevin Connaughton ASSISTANT TREASURER P. Zachary Egan VICE PRESIDENT Kenneth A. Kalina ASSISTANT TREASURER Bruce H. Lauer VICE PRESIDENT, SECRETARY AND TREASURER Louis J. Mendes VICE PRESIDENT Robert A. Mohn VICE PRESIDENT Todd M. Narter VICE PRESIDENT Christopher J. Olson VICE PRESIDENT Vincent P. Pietropaolo ASSISTANT SECRETARY Robert P. Scales CHIEF COMPLIANCE OFFICER, VICE PRESIDENT GENERAL COUNSEL AND CHIEF LEGAL OFFICER INVESTMENT ADVISER Columbia Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 1-800-922-6769 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston, Massachusetts 02111-2621 TRANSFER AGENT, DIVIDEND DISBURSING AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston, Massachusetts 02266-8081 1-800-345-6611 LEGAL COUNSEL Bell, Boyd & Lloyd LLC Chicago, Illinois THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS. AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800) 922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES IS AVAILABLE (I) WITHOUT CHARGE, UPON REQUEST, BY CALLING 800-922-6769 AND (II) ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. Find out what's new - visit our web site at: www.columbiafunds.com OUR E-MAIL ADDRESS IS: serviceinquiries@columbiamanagement.com SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS, SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL. 88 1-800-922-6769 DIRECTIONS TO THE 2004 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING FROM THE SOUTH: Take 1-57 (which merges with I-94, also known as the Dan Ryan Expressway). Take the Dan Ryan into Chicago. Follow the signs for the Kennedy (I-90/94) Expressway West. Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east to LaSalle Street and turn right (south). FROM THE NORTH: Take the Kennedy Expressway (I-90/94) south to Chicago. Exit at Jackson Boulevard. Turn left (east) from the exit onto Jackson Boulevard. Proceed east on Jackson to LaSalle Street. FROM THE WEST: Take the Eisenhower Expressway (I-290) from the west. This becomes Congress Parkway in the city. Bear right (south) off of Congress onto Franklin Street. Turn right (east) on Jackson Boulevard. Proceed east on Jackson to LaSalle Street. FROM THE SOUTHWEST: Take the Stevenson Expressway (I-55). Exit to the Kennedy Expressway (North-Wisconsin). Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east to LaSalle Street and turn right (south). PARKING INFORMATION There is no parking in the Bank of America Building but several public parking lots are located within two blocks of the building. The South Loop Self Park is located at 318 S. Federal Street. Traders Self Park is located at 326 S. Wells Street. Both lots are marked on the map on the inside front cover of this report. For directions using public transportation, call (312) 836-7000 for CTA travel information or visit the CTA website at www.transitchicago.com. For Metra information call (312) 322-6777 during business hours or find information at www.metrarail.com. COLUMBIA ACORN FUNDS SEMIANNUAL REPORT, JUNE 30, 2004 [U.S. Postage Stamp] [EAGLE HEAD LOGO] COLUMBIA FUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.6611 WWW.COLUMBIAFUNDS.COM ACN-03/220S-06/04 (08/04) 04/1956 LOOK INSIDE FOR THE DATE AND NEW LOCATION OF THE 2004 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING. COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARES SEMIANNUAL REPORT JUNE 30, 2004 MANAGED BY COLUMBIA WANGER ASSET MANAGEMENT, L.P. 2 COLUMBIA ACORN FUND COLUMBIA ACORN INTERNATIONAL COLUMBIA ACORN USA COLUMBIA ACORN INTERNATIONAL SELECT COLUMBIA ACORN SELECT COLUMBIA THERMOSTAT FUND PLEASE JOIN US FOR THE 2004 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING WHEN September 28, 2004 9:00 a.m. CST NEW MEETING LOCATION Bank of America LaSalle Room, 21st Floor 231 S. LaSalle Street Chicago, IL 60604 REFRESHMENTS WILL BE SERVED. The Bank of America Building is bordered by LaSalle Street on the west, Clark Street on the east and Jackson Boulevard on the South. The building is easily accessible by public transportation and is near Chicago Metra stations. See the map below for the exact location. RSVP BY SEPTEMBER 21 PLEASE CALL US AT (800) 922-6769 BY SEPTEMBER 21 IF YOU PLAN TO ATTEND. To comply with security requirements, we must provide Bank of America building management with a list of guests attending the meeting. Calling to RSVP should prevent security delays at the door on the day of the event. TO ACCESS THE 21ST FLOOR MEETING ROOM, YOU MAY CHECK IN AT THE SECURITY DESK LOCATED ON THE LASALLE STREET SIDE OF THE BUILDING LOBBY. YOU WILL NEED TO PRESENT A VALID PICTURE ID (SUCH AS A DRIVER'S LICENSE) TO BUILDING SECURITY FOR ADMITTANCE TO THE MEETING FLOOR. We hope you will join us to meet your Columbia Acorn Funds' portfolio managers, analysts and your fellow shareholders. Presentations will offer market updates and provide in-depth information on your Columbia Acorn investments. A question and answer period will follow the presentations. [IMAGE OF LOCATION MAP] FOR DIRECTIONS AND PARKING INFORMATION, PLEASE SEE THE INSIDE BACK COVER OF THIS REPORT. COLUMBIA ACORN FAMILY OF FUNDS SEMIANNUAL REPORT 2004 TABLE OF CONTENTS Columbia Acorn Family of Funds Performance At A Glance 2 Squirrel Chatter: Why The Heck Should We Own Small-cap Stocks? 3 COLUMBIA ACORN FUND In a Nutshell 6 At a Glance 7 Major Portfolio Changes 18 Statement of Investments 21 COLUMBIA ACORN INTERNATIONAL In a Nutshell 8 At a Glance 9 Major Portfolio Changes 33 Statement of Investments 35 Portfolio Diversification 39 COLUMBIA ACORN USA In a Nutshell 10 At a Glance 11 Major Portfolio Changes 40 Statement of Investments 41 COLUMBIA ACORN INTERNATIONAL SELECT In a Nutshell 12 At a Glance 13 Major Portfolio Changes 46 Statement of Investments 47 Portfolio Diversification 49 COLUMBIA ACORN SELECT In a Nutshell 14 At a Glance 15 Major Portfolio Changes 50 Statement of Investments 51 COLUMBIA THERMOSTAT FUND In a Nutshell 16 At a Glance 17 Statement of Investments 70 Statement of Assets and Liabilities 71 Statement of Operations 72 Statement of Changes in Net Assets 73 Financial Highlights 75 Notes to Financial Statements 76 COLUMBIA ACORN FAMILY OF FUNDS Statements of Assets and Liabilities 54 Statements of Operations 55 Statements of Changes in Net Assets 56 Financial Highlights 60 Notes to Financial Statements 64 Change in Independent Registered Public Accounting Firm 80 Columbia Acorn Family of Funds Information 81 Board of Trustees and Management of Acorn 84 > MID-YEAR DISTRIBUTIONS The following table details the funds' mid-year distributions. The record date was June 2, 2004, and the payable date was June 3, 2004. Columbia Acorn USA and Columbia Acorn Select did not have any mid-year distributions.
COLUMBIA ACORN COLUMBIA ACORN COLUMBIA ACORN INTERNATIONAL COLUMBIA FUND INTERNATIONAL SELECT THERMOSTAT FUND -------------- -------------- -------------- --------------- Long-term Capital Gains $0.0283 None None $0.0028 Short-term Capital Gains None None None $0.0145 Income Dividend None $0.2498 $0.0678 None Reinvestment Price $23.87 $23.50 $15.21 $12.45
THE DISCUSSION IN THIS REPORT OF PORTFOLIO COMPANIES IS FOR ILLUSTRATION ONLY AND IS NOT A RECOMMENDATION OF INDIVIDUAL STOCKS. THE INFORMATION IS BELIEVED TO BE ACCURATE, BUT THE INFORMATION AND THE VIEWS OF THE PORTFOLIO MANAGERS MAY CHANGE AT ANY TIME WITHOUT NOTICE AND THE PORTFOLIO MANAGERS MAY ALTER A FUND'S PORTFOLIO HOLDINGS BASED ON THESE VIEWS AND THE FUND'S CIRCUMSTANCES AT THAT TIME. 1 COLUMBIA ACORN FAMILY OF FUNDS >PERFORMANCE AT A GLANCE CLASS Z AVERAGE ANNUAL TOTAL RETURNS THROUGH 6/30/04
2ND* YEAR TO* 1 3 5 10 LIFE QUARTER DATE YEAR YEARS YEARS YEARS OF FUND ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (6/10/70) 1.65% 8.99% 35.90% 10.23% 13.94% 15.65% 16.34% ----------------------------------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -2.20% 11.83% 12.05% ----------------------------------------------------------------------------------------------------------------- Russell 2500 0.34% 6.24% 32.21% 7.40% 8.47% 13.08% NA ----------------------------------------------------------------------------------------------------------------- Russell 2000 0.47% 6.76% 33.37% 6.24% 6.63% 10.93% NA ----------------------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 1.56% 7.76% 32.80% 7.22% 9.85% 12.48% NA ----------------------------------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 1.05% 5.51% 26.28% 4.34% 7.50% 12.47% NA ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (9/23/92) 1.77% 8.78% 41.42% 7.33% 5.48% 8.62% 11.38% ----------------------------------------------------------------------------------------------------------------- Citigroup EMI Global ex-US -0.24% 9.52% 44.13% 13.29% 6.22% 4.42% 6.83% ----------------------------------------------------------------------------------------------------------------- MSCI EAFE 0.22% 4.56% 32.37% 3.87% 0.02% 4.06% 6.29% ----------------------------------------------------------------------------------------------------------------- Lipper Int'l Small- Cap Funds Index 1.27% 11.16% 45.62% 12.44% 9.03% NA NA ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (9/4/96) 4.67% 9.85% 34.66% 7.62% 10.20% -- 14.42% ----------------------------------------------------------------------------------------------------------------- Russell 2000 0.47% 6.76% 33.37% 6.24% 6.63% -- 8.97% ----------------------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 1.56% 7.76% 32.80% 7.22% 9.85% -- 10.29% ----------------------------------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -2.20% -- 8.99% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (11/23/98) 0.70% 7.68% 38.45% 5.06% 4.01% -- 8.70% ----------------------------------------------------------------------------------------------------------------- Citigroup World ex-US Cap Range $2-10B -1.23% 7.29% 42.32% 10.36% 6.19% -- 7.23% ----------------------------------------------------------------------------------------------------------------- MSCI EAFE 0.22% 4.56% 32.37% 3.87% 0.02% -- 1.49% ----------------------------------------------------------------------------------------------------------------- Lipper International Funds Index -1.08% 3.86% 29.36% 3.93% 1.54% -- 2.98% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (11/23/98) 1.93% 7.42% 20.40% 10.47% 10.62% -- 14.74% ----------------------------------------------------------------------------------------------------------------- S&P MidCap 400 0.97% 6.08% 27.98% 6.58% 9.05% -- 11.40% ----------------------------------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 1.32% 5.28% 23.14% -2.76% 0.19% -- 5.31% ----------------------------------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -0.69% -2.20% -- 1.11% ----------------------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (9/25/02) -0.18% 2.74% 12.91% -- -- -- 15.08% ----------------------------------------------------------------------------------------------------------------- S&P 500 1.72% 3.44% 19.11% -- -- -- 22.82% ----------------------------------------------------------------------------------------------------------------- Lehman U.S Credit Intermediate Bond Index -2.82% -0.08% 0.44% -- -- -- 5.61% ----------------------------------------------------------------------------------------------------------------- Lehman U.S. Govt. Intermediate Bond Index -2.30% -0.15% -0.48% -- -- -- 1.99% ----------------------------------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index -0.11% 2.25% 14.64% -- -- -- 17.58% -----------------------------------------------------------------------------------------------------------------
*Not annualized. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN A FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. DESCRIPTION OF INDEXES: S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. S&P MIDCAP 400 is a broad market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. RUSSELL 2000 is a market-weighted index of 2000 smaller U.S. companies, formed by taking the largest 3,000 companies and eliminating the largest 1,000. RUSSELL 2500 is the smallest 2,500 U.S. companies from this same group. CITIGROUP EMI GLOBAL EX-US is the bottom 20% of institutionally investable capital of developed and emerging countries, selected by index sponsor, outside the U.S. MSCI EAFE is Morgan Stanley's Europe, Australasia and Far East Index, a widely recognized international benchmark that comprises 20 major markets in proportion to world stock market capitalization. CITIGROUP WORLD EX-US CAP RANGE $2-$10B is a subset of the Broad Market Index, representing a mid-cap developed market index excluding the U.S. LIPPER INDEXES include the largest funds tracked by Lipper, Inc. in the named category. LIPPER MID-CAP GROWTH INDEX, 30 mid-cap growth funds; LIPPER MID-CAP CORE FUNDS INDEX, 30 mid-cap core funds; LIPPER INTERNATIONAL FUNDS INDEX, 30 largest non-U.S. funds, not including non-U.S. small-cap funds; LIPPER INTERNATIONAL SMALL-CAP FUNDS INDEX, 10 largest non-U.S. funds investing in small-cap companies, including Columbia Acorn International; LIPPER SMALL-CAP CORE FUNDS INDEX, 30 largest small-cap core funds, including Columbia Acorn Fund. LIPPER FLEXIBLE PORTFOLIO FUNDS INDEX is an equal dollar weighted index of the 30 largest mutual funds within the Flexible Portfolio fund classification, as defined by Lipper. LEHMAN U.S. GOVERNMENT INTERMEDIATE BOND INDEX is made up of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The LEHMAN U.S. CREDIT INTERMEDIATE BOND INDEX is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. All indexes are unmanaged and returns include reinvested distributions. A more complete description of each index is included in the Fund's statement of additional information. It is not possible to invest directly in an index. 2 >SQUIRREL CHATTER: WHY THE HECK SHOULD WE OWN SMALL-CAP STOCKS? [Photo of Ralph Wanger] I often get asked the question, "Why own small caps rather than the great American blue chip companies?" My answer is that many of the so-called blue chip companies remind me of the Rolling Stones: Once great but 30 years past their prime. The rapid change and growth of the past 30 years created today's corporate behemoths. But that was then. The world has moved on and the environment is different. This creates a big problem for old giants as the market embraces new companies that are able to adapt to the world as it is now. The cycle of creation, growth, maturity and decline can be seen in all companies. One of the most successful companies for generations was Eastman Kodak. Today people are switching from film cameras to digital cameras so Kodak's expertise in making film is fast becoming obsolete. The company is trying desperately to figure out how to survive in today's world but it is likely to be a considerably smaller and less profitable company in the years to come. In the computer industry, IBM was once considered so dominant that the government brought an antitrust action against the company to keep it from completely dominating the world. Well, IBM does not dominate the world, but the antitrust settlement was not the reason for it. IBM had a lock on the mainframe computer market but PC networks rendered IBM's position irrelevant. IBM is still a big company but it is no longer dominant in the computer industry. We also see a great deal of American manufacturing moving overseas, especially to China. An example is Levi's, a famous brand that was synonymous with blue jeans. Today Levi's no longer manufactures, distributes or designs blue jeans anywhere. Levi's owns the brand and collects royalties but the rest of the business has been turned over to a Hong Kong company named Li & Fung. Li & Fung outsources the entire production process for Levi's jeans. This is not the first time foreign markets have encroached upon U.S. manufacturing. Twenty years ago we were worried about Japan. In area after area, Japanese companies were knocking off U.S. companies. Ford and General Motors were suddenly marginalized when Toyota came on the scene. General Motors has gone from the most powerful company in the United States to what we consider an unhealthy company with low profits and a poor balance sheet. Today, the Internet has created new businesses like Ebay, Expedia, and Amazon and put enormous pressure on old-line companies. Voice over Internet protocol is likely to do the same thing to the telephone industry that digital cameras did to Kodak. Free phone calls via the Internet is not the pricing model that big phone companies have in mind. The music industry has been severely hurt by file sharing online just as the post office and FedEx are losing market share to email. There is a great deal of innovation required to keep a business sound in today's technology-driven world. One business crushed by the Internet was Encyclopedia Britannica. Believe it or not, there was a time when research was conducted using books. Now, we Google. Few of us have a set of Encyclopedia Britannica at home today. Thirty years ago, we would have. Tornadoes blow away houses everyday that would have been safe if they only had three hundred pounds of encyclopedias ballasting the living room like we used to. Big companies not only have to manage technological change, but they have to do it in a world of union contracts that have seriously complicated their ability to change with the times. They must also continually adapt to political and regulatory changes. Sarbanes-Oxley requirements, for example, have increased accounting costs for companies. We think one of the next big battles already underway is with large pharmaceutical companies. It's fairly well known that you can buy prescription drugs cheaper in Canada than you can in the United States. Foreign countries have discovered that they can "free ride" on American-company drug prices because they don't have to pay for research and development (R&D). Some people are working to figure out how to increase the amount of drugs imported from Canada but it makes no sense to make a product in Indianapolis, ship it to Toronto, and then ship it back to Indianapolis. Government regulation may soon require that U.S. pharmaceutical companies price drugs sold in the U.S. market the same as those sent to foreign markets. Perhaps, if drug-company R&D is 3 retained, a subsidy will be issued by the government to cover that cost. If this happens, major drug companies will find their profits severely reduced. The drug industry, which was the center of institutional portfolios for the last 50 years because of steady, stable growth, may be less attractive over the next couple of decades. This sort of shift has happened before. Forty years ago electric utilities served as the stable growth base for institutional portfolios. I can remember having arguments with Duff and Phelps analysts about whether Commonwealth Edison would have a six-percent growth rate or a six-and-a-half-percent growth rate in the future. The distinction seemed to be makeable, reasonable and important. Today, electric utilities don't have long-term growth rates. They are highly cyclical businesses with profits that can be variable from one year to the next and are now considered anything but the base of a stable growth portfolio. While our funds don't own big pharmaceutical companies or big electric utilities, we think there will always be small companies that find ways to make money and grow as the old favorites peak and start to mature and decline. What kinds of things do the Columbia Acorn Funds look for in small-cap investing? We've found opportunities in the financial area. We believe regional banks and savings and loans have the potential to grow and prosper. Sometimes this occurs because they are in areas where giant banks haven't shown up yet. Here in Chicago, a few very large banks headquartered elsewhere dominate the city's banking industry. Still, some people prefer to bank at smaller local banks where they are treated more as a customer than an account number. Some of the smaller banks we own in our funds are Glacier Bancorp in Montana, Republic in Michigan, and Peoples Bank Bridgeport in Connecticut. These companies will often prosper on their own. If they are taken over by one of the big banks, the funds would make a profit that way. Specialty retail is also an interesting area for the small-cap investor. Retail is dominated by large shopping malls. If someone can formulate a new retail idea and prove it out with a half-dozen stores, it doesn't take very long to increase from five stores to 500 because malls always look for new hot concepts. Some of the companies we own that have done well are Christopher & Banks, Chico's FAS, Hot Topic, Cheesecake Factory and AFC Enterprises. An investor may want to look for companies that have very strong brands such as Procter & Gamble and Gillette. Don't make the mistake of thinking smaller companies lack recognizable brands. One of Columbia Acorn Fund's most successful stocks has been Harley-Davidson, the only brand that we can think of that people tattoo on their bodies. Coach, a top brand in leather goods, is another small-cap stock owned in the funds. We also own Scotts in lawn care; International Speedway in NASCAR racing; Carnival in cruise lines and Weight Watchers in weight watching. What we look for in all of these companies is what we call a "reason to own." We need to find a factor that we believe will give a company a reason to prosper over a long period of time. Our favorite theme under "reason to own" is Downstream from Technology. Making microchips is a very important business but when you get into the manufacturing of high-tech devices, it is notoriously competitive with very short product life cycles, a high degree of price competition and the profitability of these companies is often very short lived. It is hard to prosper in a business when you must cut prices 30% every year. We think it is better to own companies that are CUSTOMERS of these electronic companies. Getty Images is downstream from technology and one of our favorite stocks. The company sells photography over the Internet. They have 2.6 million photos that you can search for by subject and download at a moderate price. If you want to do an ad with a photo of a retired couple walking on the beach, buying one of Getty's pictures can save you the money and time required to create the same shot. Other downstream stocks that have done well for our funds include Zebra Technologies, a manufacturer of bar code printers, and International Game Technology (IGT). IGT has taken a low-priced, microprocessor and used it to create an electronic slot machine, capitalizing on the American people's willingness to spend about $30 an hour to play a fairly dull video game. This willingness also has created the modern gaming industry, which has spread into most states across the country. 1-800-922-6769 4 Not all technology is electronic. Nektar Therapeutics uses biotech and technology to generate inhaleable insulin to treat diabetes, one of the most serious health problems facing Americans. We believe anyone who can change insulin therapy from injections to some less objectionable form is likely to have a good business. Small growth companies may succeed because they grow in the niche areas between the giants. Of course, not all small companies work but when they do, there is potential for significant gains. Columbia Acorn Fund profits on stocks such as IGT and Harley-Davidson have been on the order of 100:1. A good idea, a hard-working entrepreneur, and long-term equity owners should continue to partner together to build winning companies in the future. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. -------------------------------------------------------------------------------- THIS ESSAY WAS TAKEN FROM A SPEECH GIVEN BY RALPH WANGER AT THE THINKEQUITY CONFERENCE HELD IN CHICAGO ON JUNE 22, 2004. AS OF JUNE 30, 2004, FUND POSITIONS IN THE COMPANIES MENTIONED WERE: LI & FUNG: COLUMBIA ACORN FUND, 0.1%; COLUMBIA ACORN INTERNATIONAL SELECT FUND, 1.6%. GLACIER BANCORP: COLUMBIA ACORN FUND, 0.5%. REPUBLIC: COLUMBIA ACORN FUND, 0.2%. PEOPLES BANK BRIDGEPORT: COLUMBIA ACORN FUND, 0.8%. CHRISTOPHER & BANKS: COLUMBIA ACORN FUND, 0.5%; COLUMBIA ACORN USA, 0.8%. CHICO'S FAS: COLUMBIA ACORN FUND, 0.9%. HOT TOPIC: COLUMBIA ACORN FUND, 0.2%. CHEESECAKE FACTORY: COLUMBIA ACORN FUND, 0.1%. AFC ENTERPRISES: COLUMBIA ACORN FUND, 0.3%. HARLEY-DAVIDSON: COLUMBIA ACORN FUND, 0.9%; COLUMBIA ACORN SELECT, 6.3%. COACH: COLUMBIA ACORN FUND, 1.0%; COLUMBIA ACORN USA, 0.4%; COLUMBIA ACORN SELECT, 2.9%. SCOTTS COMPANY: COLUMBIA ACORN FUND, 0.5%; COLUMBIA ACORN USA, 1.4%. INTERNATIONAL SPEEDWAY MOTORS: COLUMBIA ACORN FUND, 0.3%; COLUMBIA ACORN USA, 0.6%; COLUMBIA ACORN SELECT, 2.3%. CARNIVAL: COLUMBIA ACORN FUND, 0.2%. WEIGHT WATCHERS: COLUMBIA ACORN FUND, 0.2%; COLUMBIA ACORN USA, 0.3%; COLUMBIA ACORN SELECT, 2.9%. GETTY IMAGES: COLUMBIA ACORN FUND, 0.6%; COLUMBIA ACORN USA, 0.8%. ZEBRA TECHNOLOGIES: COLUMBIA ACORN FUND, 0.3%; COLUMBIA ACORN USA, 1.9%. INTERNATIONAL GAME TECHNOLOGY: COLUMBIA ACORN FUND, 2.1%. NEKTAR THERAPEUTICS: COLUMBIA ACORN FUND, 0.2%; COLUMBIA ACORN USA, 0.9%. COMPANIES THAT WERE MENTIONED BUT NOT LISTED ABOVE WERE NOT HELD BY ANY OF THE COLUMBIA ACORN FUNDS AS OF JUNE 30, 2004. THE COMPANIES NAMED ARE FOR ILLUSTRATION PURPOSES ONLY AND ARE NOT INTENDED TO BE A RECOMMENDATION TO BUY OR SELL ANY STOCK. 5 COLUMBIA ACORN FUND > IN A NUTSHELL [Photo of Charles P. McQuaid] [Photo of Robert A. Mohn] Columbia Acorn Fund rose 1.65% in the second quarter, somewhat more than its smaller cap benchmarks and in line with the large-cap S&P 500. In the first half of 2004, Columbia Acorn grew 8.99%, beating all of its benchmarks (see Page 2 for performance data). Performance for both periods was helped by our investments in energy. We also profited from good stock picking. On the advice of our energy analyst, Jason Selch, we had built energy to about 9% of the Fund--nearly twice the energy weighting of the Russell 2500 Index. Energy prices remained high, and both our large weighting and fine stock selection paid off. Quicksilver hit pay dirt, and was Columbia Acorn's largest percentage winner in both periods, rising about 73% in the quarter and doubling in the half. XTO Energy was the Fund's largest dollar winner year-to-date, gaining over $200 million for shareholders while rising 32%. Other energy successes included Western Gas and Ultra Petroleum, each up more than 24% in the quarter and 35% in the half. Other excellent stock picks included Rogers, a provider of electronic components, up on fine earnings. Retailer Urban Outfitters also jumped, as amazing sales increases drove earnings. Cell phone service provider Western Wireless benefited from growth overseas. Each of these stocks jumped at least 24% in the quarter and 57% in the half. Gaming stocks were volatile. International Game Technology was Columbia Acorn's largest dollar winner in the first quarter but its largest dollar loser in the second, despite making its growth targets. For the half, it rose 9%. We trimmed the stock due to valuation concerns, locking in fantastic gains. Alliance Gaming gained 30% in the first quarter, but dropped 47% in the second quarter on lower earnings expectations. Technology was tough year-to-date, as gains in hardware stocks were more than offset by drops in the Fund's software and service companies. After a 49% gain in the first quarter, Skillsoft Publishing retreated 41% on an order shortfall. Columbia Acorn's foreign stocks rose 2.42% in the quarter and 10.02% in the half. Gambro, a leading worldwide dialysis provider, and Rhoen-Klinikum, a leading private hospital company in Germany, each rose more than 25% in the quarter. United Kingdom-based Tullow Oil gained 49% in the half. We've built the Fund's foreign stock position to 15% of assets, and plan to stay near this level since we believe foreign stocks appear attractive. Most of the Fund's companies are reporting what we consider good business conditions and excellent earnings gains. Macro economic concerns recently have kept a lid on stock prices. We hope that earnings gains will rule in the future. /s/ Charles P. McQuaid /s/ Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER DEMOGRAPHY IS DESTINY -------------------------------------------------------------------------------- The baby boomer population continues to provide investment opportunities. Baby boomers are aging worldwide and many are becoming obese. Age plus obesity has caused an epidemic of diabetes. This disease often causes kidney failure. Gambro, headquartered in Sweden, operates dialysis centers and sells renal products in many parts of the world. Columbia Wanger Asset Management analyst Stephen Kusmierczak concluded that Gambro was improving its cost structure and enhancing its sales mix. He saw through goodwill amortization charges and valued the stock based on free cash flow. When Stephen's research indicated that the market expectations concerning Medicare dialysis reimbursement may be unduly pessimistic, we added to Columbia Acorn Fund's position. Good research paid off as Gambro's stock rose 30% in the second quarter. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: QUICKSILVER, 0.3%; XTO ENERGY, 1.8%; WESTERN GAS, 0.7%; ULTRA PETROLEUM, 0.7%; ROGERS, 0.3%; URBAN OUTFITTERS, 0.4%; WESTERN WIRELESS, 0.7%; INTERNATIONAL GAME TECHNOLOGY, 2.1%; ALLIANCE GAMING, 0.4%; SKILLSOFT PUBLISHING, 0.6%; RHOEN-KLINIKUM, 0.2%; TULLOW OIL, 0.3%; GAMBRO, 0.2%. 1-800-922-6769 6 COLUMBIA ACORN FUND >AT A GLANCE TICKER SYMBOL: ACRNX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR TO DATE* 1 YEAR 5 YEARS 10 YEARS -------- ------ ------- -------- Returns before taxes 8.99% 35.90% 13.94% 15.65% Returns after taxes 8.97 35.86 12.26 13.54 on distributions Returns after taxes 5.87 23.39 11.37 12.80 on distributions and sale of fund shares S&P 500 (pretax) 3.44 19.11 -2.20 11.83 Russell 2500 (pretax) 6.24 32.21 8.47 13.08 Russell 2000 (pretax) 6.76 33.37 6.63 10.93 Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. COLUMBIA ACORN FUND PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer Goods/Services 21.8% Industrial Goods/Services 13.5% Finance 12.3% Other* 6.7% Health Care 9.1% Energy/Minerals 9.1% Real Estate 2.6% Information 24.9% Software/Services 11.6% Computer Related Hardware 8.0% Media 2.1% Telecommunications 3.2% *Other includes cash and other assets less liabilities of 5.7%. Foreign equities within the portfolio were 15.0% diversified by country as follows: 9.0% Europe; 1.7% Asia without Japan; 2.0% Canada; 1.3% Japan; 0.5% Australia/New Zealand; 0.5% Latin America. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z) >June 10, 1970 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Acorn Fund at inception on June 10, 1970 to the S&P 500 Stock Index, a broad, market-weighted average of U.S. blue-chip company stock performance. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA ACORN FUND NAV ON 6/30/04: $24.56 TOTAL NET ASSETS: $12,289.6 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ------------------------------------------ 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 35.90% 13.94% 15.65% 16.34% COLUMBIA ACORN FUND S&P 500 ------------- ------------- 6/10/70 9694.96 9819.82 6/30/70 10517.20 10575.00 7/31/70 11223.10 11081.10 8/31/70 12022.80 11481.20 9/30/70 11916.20 11385.80 10/31/70 12169.40 11962.10 11/30/70 13586.70 12676.20 12/31/70 14953.40 13224.70 1/31/71 15837.70 13378.40 2/28/71 17020.50 13905.70 3/31/71 18230.50 14446.20 4/30/71 17275.90 13881.80 5/31/71 17397.30 13928.20 6/30/71 17289.40 13389.00 7/31/71 17640.10 13908.30 8/31/71 17571.50 13846.10 9/30/71 16516.40 13304.20 10/31/71 15677.70 13306.80 11/30/71 17828.50 14489.90 12/31/71 18652.50 14788.00 1/31/72 19648.80 15197.40 2/29/72 20119.20 15323.30 3/31/72 20672.70 15426.60 4/30/72 20824.90 15731.30 5/31/72 20562.00 15425.30 6/30/72 19521.50 15498.10 7/31/72 19129.90 16070.50 8/31/72 18962.10 16029.40 9/30/72 18920.10 16218.90 10/31/72 19745.20 17000.50 11/30/72 19367.60 17241.70 12/31/72 18270.10 16984.60 1/31/73 16883.50 16385.80 2/28/73 16563.50 16399.00 3/31/73 15055.00 15373.60 4/30/73 13637.80 15515.40 5/31/73 13637.80 15453.10 6/30/73 15214.60 16081.10 7/31/73 14555.10 15532.60 8/31/73 16825.00 16196.30 9/30/73 17469.20 16222.80 10/31/73 14877.20 14423.70 11/30/73 14769.80 14708.50 12/31/73 15110.60 14603.90 1/31/74 15188.10 14593.30 2/28/74 15017.60 14293.90 3/31/74 13824.30 13781.10 4/30/74 12925.40 13365.10 5/31/74 12506.90 13212.80 6/30/74 11718.20 12366.20 7/31/74 10621.60 11176.50 8/31/74 9697.29 9888.71 9/30/74 12015.90 11551.40 10/31/74 11436.20 10987.00 11/30/74 10684.30 10816.10 12/31/74 12371.50 12191.30 1/31/75 12895.60 12969.00 2/28/75 13022.60 13298.90 3/31/75 13642.00 13975.90 4/30/75 14928.40 14642.30 5/31/75 15944.80 15341.80 6/30/75 15106.10 14353.50 7/31/75 14224.10 14100.40 8/31/75 13646.80 13660.60 9/30/75 14160.00 14553.50 10/31/75 14224.10 14964.20 11/30/75 13951.50 14842.30 12/31/75 16285.70 16649.40 1/31/76 17970.90 16509.00 2/29/76 18959.40 17065.40 3/31/76 18943.20 16933.00 4/30/76 19461.80 16744.80 5/31/76 20498.90 17486.80 6/30/76 19796.30 17403.30 7/31/76 19861.60 17371.50 8/31/76 20727.30 17819.30 9/30/76 19926.90 17488.10 10/31/76 21217.30 17416.50 11/30/76 23046.60 18394.30 12/31/76 24091.10 17523.80 1/31/77 23235.40 17204.60 2/28/77 23910.10 17024.40 3/31/77 24486.10 17094.60 4/30/77 24979.70 16759.40 5/31/77 26608.90 17587.40 6/30/77 26441.50 17368.80 7/31/77 25778.00 17070.70 8/31/77 25628.70 17097.20 9/30/77 24666.60 16430.80 10/31/77 26740.10 16950.20 11/30/77 27171.40 17077.40 12/31/77 25528.80 16097.00 1/31/78 25780.50 15771.10 2/28/78 26754.00 16234.80 3/31/78 28919.20 17698.70 4/30/78 30094.10 17861.70 5/31/78 30094.10 17616.60 6/30/78 32149.90 18643.30 7/31/78 35492.20 19203.80 8/31/78 34745.70 19142.80 9/30/78 28519.30 17473.50 10/31/78 30826.60 17848.40 11/30/78 31776.70 18199.50 12/31/78 33357.00 19006.40 1/31/79 32583.80 18395.60 2/28/79 36376.10 19492.60 3/31/79 36504.90 19617.10 4/30/79 37057.20 19189.20 5/31/79 40131.50 20023.80 6/30/79 41505.20 20292.80 7/31/79 44852.30 21464.00 8/31/79 45298.60 21555.40 9/30/79 42063.00 20174.90 10/31/79 45614.80 21134.10 11/30/79 47790.40 21585.90 12/31/79 50478.20 22927.90 1/31/80 50602.40 22926.60 2/29/80 42258.40 20696.90 3/31/80 44556.60 21654.70 4/30/80 47393.20 22768.90 5/31/80 49111.70 23489.70 6/30/80 52126.70 25123.20 7/31/80 54232.80 25377.60 8/31/80 56697.00 26124.80 9/30/80 57876.40 26653.40 10/31/80 61793.80 29492.60 11/30/80 62594.10 28602.30 12/31/80 61405.10 27405.90 1/31/81 61124.80 27881.60 2/28/81 65118.90 28997.10 3/31/81 65445.90 28436.70 4/30/81 66637.10 28509.50 5/31/81 64184.60 28330.70 6/30/81 61688.10 28389.00 7/31/81 57933.60 26750.10 8/31/81 54131.50 25431.90 9/30/81 57600.90 26804.50 10/31/81 58955.30 27910.70 11/30/81 58004.80 27195.30 12/31/81 55855.50 26840.20 1/31/82 54397.10 25339.20 2/28/82 53546.40 25206.70 3/31/82 55247.80 26346.10 4/30/82 54299.90 25447.80 5/31/82 53692.20 25066.20 6/30/82 52745.60 24619.80 7/31/82 55713.30 27608.60 8/31/82 56586.10 27953.10 9/30/82 62596.40 31169.80 10/31/82 67559.20 32429.80 11/30/82 68207.60 33053.80 12/31/82 71999.10 34283.30 1/31/83 75490.60 35068.90 2/28/83 77580.20 36364.60 3/31/83 80463.40 39228.90 4/30/83 85065.80 38888.40 5/31/83 87777.20 40401.40 6/30/83 85603.50 39209.10 7/31/83 83886.10 39798.60 8/31/83 85388.90 40347.10 9/30/83 82356.50 39880.80 10/31/83 85254.70 40722.00 11/30/83 85388.90 40510.10 12/31/83 82835.90 40283.50 1/31/84 79613.70 38865.90 2/29/84 80298.10 39539.00 3/31/84 80212.50 39913.90 4/30/84 77304.00 37705.40 5/31/84 79416.90 38524.10 6/30/84 78263.90 38045.80 7/31/84 87574.80 42248.30 8/31/84 87718.90 42257.60 9/30/84 87978.40 42420.50 10/31/84 87401.90 41946.20 11/30/84 89045.00 43051.10 12/31/84 98794.40 46405.70 1/31/85 100452.00 46974.00 2/28/85 99746.10 47004.50 3/31/85 99838.20 46960.80 4/30/85 105733.00 49674.10 5/31/85 107107.00 50451.80 6/30/85 108625.00 50378.90 7/31/85 107665.00 49948.30 8/31/85 103142.00 48386.30 9/30/85 107696.00 50621.40 10/31/85 114788.00 54092.50 11/30/85 117142.00 56710.40 12/31/85 119848.00 57027.00 1/31/86 126521.00 61289.10 2/28/86 132668.00 64708.50 3/31/86 134936.00 63979.90 4/30/86 139176.00 67383.40 5/31/86 141429.00 68522.80 6/30/86 134782.00 64690.00 7/31/86 138982.00 69487.30 8/31/86 132005.00 63742.70 9/30/86 134914.00 67417.90 10/31/86 136502.00 69096.40 11/30/86 136843.00 67294.60 12/31/86 147564.00 76356.70 1/31/87 157864.00 79373.30 2/28/87 160298.00 81664.00 3/31/87 155055.00 80938.00 4/30/87 158913.00 81640.20 5/31/87 164942.00 85763.10 6/30/87 170980.00 90107.30 7/31/87 179878.00 93469.80 8/31/87 180519.00 91420.20 9/30/87 135087.00 71731.60 10/31/87 133089.00 65826.70 11/30/87 142923.00 70828.00 12/31/87 147022.00 73807.60 1/31/88 158881.00 77248.30 2/29/88 159366.00 74860.90 3/31/88 163642.00 75688.90 4/30/88 161394.00 76343.40 5/31/88 169946.00 79847.60 6/30/88 171144.00 79544.30 7/31/88 167856.00 76844.20 8/31/88 173543.00 80117.90 9/30/88 174832.00 82349.00 10/31/88 172344.00 81175.10 11/30/88 178370.00 82591.40 12/31/88 185925.00 88639.40 1/31/89 189702.00 86430.80 2/28/89 192253.00 88447.30 3/31/89 200936.00 93039.20 4/30/89 208099.00 96803.10 5/31/89 204223.00 96254.60 6/30/89 215945.00 104944.00 7/31/89 221422.00 106997.00 8/31/89 226493.00 106562.00 9/30/89 213358.00 104089.00 10/31/89 217568.00 106211.00 11/30/89 222681.00 108761.00 12/31/89 208258.00 101460.00 1/31/90 210852.00 102766.00 2/28/90 217234.00 105490.00 3/31/90 210956.00 102858.00 4/30/90 226002.00 112887.00 5/31/90 229686.00 112125.00 6/30/90 226379.00 111766.00 7/31/90 195903.00 101664.00 8/31/90 175081.00 96715.70 9/30/90 170959.00 96303.70 10/31/90 177743.00 102529.00 11/30/90 183674.00 105386.00 12/31/90 194615.00 109975.00 1/31/91 210518.00 117839.00 2/28/91 219033.00 120693.00 3/31/91 226082.00 120979.00 4/30/91 236741.00 126198.00 5/31/91 226533.00 120416.00 6/30/91 237001.00 126029.00 7/31/91 245977.00 129014.00 8/31/91 246204.00 126856.00 9/30/91 253986.00 128561.00 10/31/91 246772.00 123381.00 11/30/91 270641.00 137492.00 12/31/91 285157.00 134930.00 1/31/92 295551.00 136684.00 2/29/92 293460.00 134018.00 3/31/92 284576.00 137954.00 4/30/92 285796.00 138630.00 5/31/92 278828.00 136567.00 6/30/92 289313.00 142146.00 7/31/92 284681.00 139238.00 8/31/92 289723.00 140877.00 9/30/92 305027.00 141361.00 10/31/92 322837.00 146174.00 11/30/92 336210.00 147928.00 12/31/92 350678.00 149205.00 1/31/93 349705.00 151239.00 2/28/93 368610.00 154429.00 3/31/93 359370.00 150697.00 4/30/93 388973.00 154728.00 5/31/93 393411.00 155182.00 6/30/93 391413.00 154556.00 7/31/93 417246.00 160421.00 8/31/93 429428.00 159193.00 9/30/93 445772.00 162484.00 10/31/93 428938.00 160935.00 11/30/93 444889.00 162882.00 12/31/93 447121.00 168418.00 1/31/94 441700.00 163847.00 2/28/94 420332.00 156704.00 3/31/94 423840.00 158714.00 4/30/94 419057.00 161318.00 5/31/94 404705.00 157364.00 6/30/94 417781.00 162532.00 7/31/94 437059.00 169194.00 8/31/94 431588.00 165057.00 9/30/94 429979.00 168765.00 10/31/94 413243.00 162619.00 11/30/94 411750.00 165032.00 12/31/94 404013.00 169311.00 1/31/95 417133.00 175910.00 2/28/95 423188.00 181101.00 3/31/95 427897.00 186433.00 4/30/95 441017.00 193884.00 5/31/95 458846.00 198388.00 6/30/95 481143.00 204967.00 7/31/95 486243.00 205482.00 8/31/95 496104.00 214155.00 9/30/95 475362.00 213389.00 10/31/95 488963.00 222756.00 11/30/95 497407.00 227047.00 12/31/95 505453.00 234775.00 1/31/96 525203.00 236952.00 2/29/96 535444.00 239232.00 3/31/96 563972.00 242760.00 4/30/96 584087.00 249020.00 5/31/96 572749.00 249970.00 6/30/96 543209.00 238927.00 7/31/96 563988.00 243967.00 8/31/96 584766.00 257697.00 9/30/96 581798.00 264805.00 10/31/96 598124.00 284821.00 11/30/96 609569.00 279177.00 12/31/96 631050.00 296619.00 1/31/97 622944.00 297752.00 2/28/97 594573.00 286661.00 3/31/97 597816.00 303775.00 4/30/97 645235.00 322269.00 5/31/97 674822.00 336708.00 6/30/97 709392.00 363498.00 7/31/97 712680.00 343135.00 8/31/97 767344.00 361926.00 9/30/97 744739.00 349840.00 10/31/97 744739.00 366035.00 11/30/97 761852.00 372320.00 12/31/97 748400.00 376439.00 1/31/98 803106.00 403589.00 2/28/98 853328.00 424257.00 3/31/98 865884.00 428524.00 4/30/98 833150.00 421159.00 5/31/98 850978.00 438266.00 6/30/98 802766.00 433600.00 7/31/98 656313.00 370910.00 8/31/98 684967.00 394671.00 9/30/98 719533.00 426775.00 10/31/98 749097.00 452640.00 11/30/98 807685.00 478724.00 12/31/98 807206.00 498743.00 1/31/99 770776.00 483242.00 2/28/99 778925.00 502576.00 3/31/99 842677.00 522039.00 4/30/99 856098.00 509711.00 5/31/99 901844.00 537999.00 6/30/99 914942.00 521200.00 7/31/99 888260.00 518622.00 8/31/99 883409.00 504404.00 9/30/99 910091.00 536324.00 10/31/99 974612.00 547226.00 11/30/99 1077260.00 579455.00 12/31/99 1051090.00 550342.00 1/31/00 1129000.00 539924.00 2/29/00 1081910.00 592744.00 3/31/00 1044700.00 574911.00 4/30/00 1022610.00 563116.00 5/31/00 1062100.00 576998.00 6/30/00 1066420.00 567977.00 7/31/00 1144140.00 603257.00 8/31/00 1163260.00 571409.00 9/30/00 1133650.00 568993.00 10/31/00 1074010.00 524134.00 11/30/00 1185610.00 526699.00 12/31/00 1207650.00 545386.00 1/31/01 1177340.00 495657.00 2/28/01 1124300.00 464257.00 3/31/01 1223500.00 500334.00 4/30/01 1275170.00 503686.00 5/31/01 1293240.00 491427.00 6/30/01 1268730.00 486590.00 7/31/01 1218320.00 456128.00 8/31/01 1053070.00 419295.00 9/30/01 1097880.00 427290.00 10/31/01 1182610.00 460066.00 11/30/01 1258360.00 464097.00 12/31/01 1246390.00 457324.00 1/31/02 1230910.00 448504.00 2/28/02 1320990.00 465372.00 3/31/02 1318180.00 437158.00 4/30/02 1278770.00 433937.00 5/31/02 1214020.00 403024.00 6/30/02 1070450.00 371610.00 7/31/02 1079600.00 374050.00 8/31/02 1015550.00 333398.00 9/30/02 1058480.00 362743.00 10/31/02 1126750.00 384093.00 11/30/02 1090860.00 361529.00 12/31/02 1065520.00 352058.00 1/31/03 1048630.00 346776.00 2/28/03 1062000.00 350143.00 3/31/03 1154200.00 378984.00 4/30/03 1236540.00 398952.00 5/31/03 1274540.00 404041.00 6/30/03 1334360.00 411165.00 7/31/03 1404740.00 419183.00 8/31/03 1388550.00 414732.00 9/30/03 1501860.00 438193.00 10/31/03 1550420.00 442049.00 11/30/03 1589180.00 465234.00 12/31/03 1646950.00 473771.00 1/31/04 1678650.00 480356.00 2/28/04 1704000.00 473109.00 3/31/04 1643420.00 465683.00 4/30/04 1673010.00 472073.00 5/31/04 1732120.00 481252.00 6/30/04 1732120.00 481252.00 COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. International Game Technology 2.1% SLOT MACHINES & PROGRESSIVE JACKPOTS 2. XTO Energy 1.8% NATURAL GAS PRODUCER 3. Expeditors International of Washington 1.1% INTERNATIONAL FREIGHT FORWARDER 4. Coach 1.0% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 5. AmeriCredit 0.9% AUTO LENDING 6. Chico's FAS 0.9% WOMEN'S SPECIALTY RETAILER 7. Harley-Davidson 0.9% MOTORCYCLES & RELATED MERCHANDISE 8. Peoples Bank Bridgeport 0.8% CONNECTICUT SAVINGS & LOAN 9. TCF Financial 0.8% GREAT LAKES BANK 10.Novell 0.8% DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 7 COLUMBIA ACORN INTERNATIONAL >IN A NUTSHELL [Photo of P.Zachary Egan] [Photo of Louis J. Mendes III] Columbia Acorn International finished the quarter up 1.77%, exceeding by just over 2% the Citigroup EMI Global ex-US benchmark decline of 0.24%. By posting a positive result in a flat market, the Fund gained back much of the ground lost relative to its benchmark in the first quarter. It is now up 8.78% year-to-date, trailing the benchmark return of 9.52%. The Fund also led the larger cap MSCI EAFE Index by 1.55% in the quarter and 4.22% year-to-date. Stock selection, as opposed to country or sector weightings, was the primary driver of performance in the second quarter. Winners included Kappa Create, a sushi restaurant chain in Japan, which was up 20% in the second quarter, after rising 31% in the first quarter. Geberit, a Swiss manufacturer of bathroom plumbing systems, was up 23% in the quarter and up 37% for the first half of the year. Energy prices remain high, which boosted profitability for many energy exploration and production companies. A holding in the United Kingdom, Tullow Oil, was up 23% in the quarter and nearly 49% for the six months. Rhoen-Klinikum, a private hospital operator in Germany and the Fund's second largest holding, also had a strong second quarter, rising 26%. The Fund's biggest loser in the second quarter was ASE Test, a semiconductor packaging and test services company, which was down 33% in the quarter and 51% in the year-to-date period on concerns that excess capacity in the semiconductor industry will weigh on profitability. Sales data for June, however, show an 88% increase over numbers reported this time last year. While the stock continues to exhibit volatility, we feel the fundamental investment case remains intact. Another laggard was Jardine Lloyd Thompson Group, an insurance broker in the United Kingdom, which was down over 20% for both the quarter and the first half. Wah Lee Industrial, a Taiwanese distributor of chemicals, materials and equipment, was down 15% for the quarter and 19% for the first half. We continued to increase the Fund's exposure to Japan in the quarter, largely in businesses geared to the domestic economy, such as consumer goods and services, and financials. We also built small positions in countries where the Fund had little or no exposure in recent years. In South Africa, the Fund now holds family clothing chain Edgars Consolidated Stores. In Brazil, Columbia Acorn International participated in the initial public offering of Natura Cosmeticos, a direct retailer of high-end skin care products. These investments reflect the Fund's continuous efforts to locate value wherever it may be. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER PROFITS IN THE WIND -------------------------------------------------------------------------------- Gamesa manufactures and services wind-driven turbines and develops and operates so-called "wind-farms" for electric generation. Columbia Acorn International built a position in the company two and a half years ago when we believed there was considerable opportunity for the company to strengthen its balance sheet by selling some of its Spanish windfarms. We felt that freeing up cash through these asset sales would also allow the company to pursue higher return projects outside of Spain. This strategy was so successful that management was looking to return cash to shareholders within nine months of the Fund's initial investment, and the share price has almost tripled over the holding period. While originally an attempt to strengthen the financial position of the company, selling windfarms is now viewed by management as a sustainable, high-return business opportunity in itself. While some investors are skeptical about this strategic direction, we believe that Gamesa, as a leading equipment supplier with an intimate understanding of the planning and permit process, is indeed well-positioned to benefit as a windfarm developer. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: KAPPA CREATE, 0.8%; GEBERIT, 1.0%; TULLOW OIL, 1.2%; RHOEN-KLINIKUM, 1.9%; ASE TEST, 0.5%; JARDINE LLOYD THOMPSON GROUP, 0.7%; WAH LEE INDUSTRIAL, 0.4%; EDGARS CONSOLIDATED STORES, 0.3%; NATURA COSMETICOS, 0.5%; GAMESA, 0.7%. 1-800-922-6769 8 COLUMBIA ACORN INTERNATIONAL >AT A GLANCE TICKER SYMBOL: ACINX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR TO DATE* 1 YEAR 5 YEARS 10 YEARS -------- ------ ------- -------- Returns before taxes 8.78% 41.42% 5.48% 8.62% Returns after taxes 8.38 41.12 4.29 7.67 on distributions Returns after taxes 5.70 27.13 4.32 7.23 on distributions and sale of fund shares Citigroup EMI Global 9.52 44.13 6.22 4.42 ex-US (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. COLUMBIA ACORN INTERNATIONAL PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer Goods/Services 24.8% Finance 12.1% Other* 5.1% Information Technology 10.6% Health Care 8.5% Energy/Minerals 8.1% Transportation 3.0% Industrial Goods/Services 27.8% *Other includes cash and other assets less liabilities of 3.2%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z) >September 23, 1992 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Acorn International at inception on September 23, 1992 to the Citigroup EMI Global ex-US, Citigroup's index of the bottom 20% of institutionally investable capital of developed and emerging countries, as selected by Citigroup, excluding the U.S. The index is unmanaged and returns for both the index and Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA ACORN INTERNATIONAL NAV ON 6/30/04: $24.39 TOTAL NET ASSETS: $1,728.2 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ------------------------------------------ 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 41.42% 5.48% 8.62% 11.38% COLUMBIA CITIGROUP ACORN EMI GLOBAL INTERNATIONAL EX-US ------------- ------------- 9/23/92 10010.00 10000.00 9/30/92 10380.00 9383.91 10/31/92 10570.00 9403.64 11/30/92 10690.00 9537.99 12/31/92 10780.00 9623.14 1/31/93 11460.00 9965.42 2/28/93 12000.00 10968.70 3/31/93 12450.00 11975.90 4/30/93 12910.00 12611.20 5/31/93 12920.00 12126.90 6/30/93 12920.00 12500.40 7/31/93 13760.00 13145.40 8/31/93 13910.00 12871.10 9/30/93 14560.00 12825.70 10/31/93 14620.00 11753.50 11/30/93 15940.00 12508.70 12/31/93 16630.00 13759.70 1/31/94 16570.00 13855.90 2/28/94 15850.00 13629.20 3/31/94 15960.00 14036.90 4/30/94 15870.00 13834.00 5/31/94 15550.00 14122.60 6/30/94 15980.00 14289.40 7/31/94 16481.40 14451.90 8/31/94 16491.50 14040.50 9/30/94 16521.70 14277.80 10/31/94 15606.00 13454.40 11/30/94 15334.40 13537.60 12/31/94 14640.10 12974.20 1/31/95 14549.50 12760.30 2/28/95 14811.10 13250.60 3/31/95 15263.90 13662.70 4/30/95 15505.40 13487.70 5/31/95 15726.80 13338.70 6/30/95 16582.20 14086.10 7/31/95 16411.00 13752.70 8/31/95 16823.80 13845.30 9/30/95 16300.30 13431.40 10/31/95 16068.70 13547.00 11/30/95 16703.00 14056.20 12/31/95 17357.40 14388.00 1/31/96 17881.00 14556.00 2/29/96 18203.20 14862.80 3/31/96 18787.10 15629.20 4/30/96 19340.90 15506.80 5/31/96 19592.60 15499.60 6/30/96 18967.90 14897.90 7/31/96 19240.40 15045.70 8/31/96 19361.60 15129.60 9/30/96 19553.30 15033.30 10/31/96 20088.40 15292.80 11/30/96 20152.90 14905.90 12/31/96 20636.00 14691.40 1/31/97 20892.90 14986.40 2/28/97 20584.60 14800.10 3/31/97 20286.50 14599.20 4/30/97 21170.40 15460.10 5/31/97 21807.50 15852.60 6/30/97 21951.10 15699.60 7/31/97 20788.10 15012.50 8/31/97 21660.30 15252.50 9/30/97 20487.00 14513.10 10/31/97 20268.90 13840.70 11/30/97 20190.30 13552.80 12/31/97 20475.70 13978.20 1/31/98 22122.60 15035.10 2/28/98 23857.20 15762.10 3/31/98 24351.30 15889.60 4/30/98 24768.50 16024.60 5/31/98 24334.70 15459.90 6/30/98 24491.40 15362.20 7/31/98 21368.40 13343.30 8/31/98 20428.20 13047.60 9/30/98 21111.00 13946.60 10/31/98 22308.70 14427.10 11/30/98 23304.90 14732.80 12/31/98 23842.20 14630.10 1/31/99 23125.80 14356.00 2/28/99 23573.50 14978.00 3/31/99 24983.90 15891.60 4/30/99 25140.60 15500.90 5/31/99 27222.30 16103.90 6/30/99 28190.90 16623.50 7/31/99 29001.80 16916.00 8/31/99 29486.10 16839.10 9/30/99 30758.80 16685.50 10/31/99 35365.30 17285.70 11/30/99 41761.10 18462.30 12/31/99 41607.50 18110.40 1/31/00 48297.80 18807.10 2/29/00 46808.40 18890.60 3/31/00 41359.30 17650.20 4/30/00 38286.00 17281.10 5/31/00 40170.90 18330.80 6/30/00 39669.10 17723.40 7/31/00 40562.60 18230.90 8/31/00 38494.10 17294.80 9/30/00 35630.00 16248.40 10/31/00 32730.10 15532.40 11/30/00 33402.30 16139.40 12/31/00 34914.90 16439.90 1/31/01 32408.00 15801.20 2/28/01 29284.80 14577.40 3/31/01 30419.20 15531.50 4/30/01 30223.20 15500.30 5/31/01 28746.50 14974.40 6/30/01 27590.90 14535.30 7/31/01 27034.60 14495.40 8/31/01 23353.90 12608.10 9/30/01 24466.60 13120.40 10/31/01 25850.50 13659.80 11/30/01 26349.80 13772.30 12/31/01 25707.80 13522.90 1/31/02 25636.50 13749.30 2/28/02 26977.50 14645.10 3/31/02 27862.00 14950.10 4/30/02 27747.90 15428.50 5/31/02 26646.10 14826.70 6/30/02 23854.00 13559.50 7/31/02 23496.10 13478.20 8/31/02 21405.60 12234.10 9/30/02 21491.50 12510.60 10/31/02 22150.20 12978.10 11/30/02 22107.40 12823.60 12/31/02 21561.90 12608.10 1/31/03 20987.70 12383.20 2/28/03 20686.20 12262.50 3/31/03 22566.80 13418.60 4/30/03 24433.00 14562.40 5/31/03 25133.50 15105.90 6/30/03 25681.50 15644.00 7/31/03 26835.00 16392.10 8/31/03 27844.40 17141.50 9/30/03 29978.50 18388.40 10/31/03 30800.50 18723.10 11/30/03 32675.00 19879.20 12/31/03 33641.10 20593.40 1/31/04 34910.10 21303.60 2/28/04 34924.50 21825.40 3/31/04 34174.70 21092.20 4/30/04 34290.00 21094.90 5/31/04 35543.50 21772.50 6/30/04 35543.00 21773.00 COLUMBIA ACORN INTERNATIONAL TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 2.1% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Rhoen-Klinikum (Germany) 1.9% HOSPITAL MANAGEMENT 3. Neopost (France) 1.5% POSTAGE METERS 4. Exel (United Kingdom) 1.4% GLOBAL LOGISTICS & FREIGHT FORWARDING 5. Kerry Group (Ireland) 1.3% FOOD INGREDIENTS 6. Grafton Group (Ireland) 1.3% BUILDERS, WHOLESALERS & DIY RETAILING 7. Talisman Energy (Canada) 1.3% OIL & GAS PRODUCER 8. Tullow Oil (United Kingdom) 1.2% OIL & GAS PRODUCER 9. Venture (Singapore) 1.2% ELECTRONIC CONTRACT MANUFACTURER 10.Daito Trust Construction (Japan) 1.1% APARTMENT BUILDER The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 9 COLUMBIA ACORN USA >IN A NUTSHELL [Photo of Robert A. Mohn] Columbia Acorn USA strongly outperformed in the second quarter, up 4.67% vs. a 0.47% gain for the Russell 2000. The Fund was also ahead year-to-date as of June 30, 2004, up 9.85% for the six months vs. a 6.76% gain for the Russell 2000. Good calls in the energy and telecom sectors contributed to the Fund's outperformance. Our energy analyst, Jason Selch, believed energy stock prices were lagging behind increases in oil prices. We added to the Fund's energy weighting at the beginning of the year and it paid off as the sector rallied in the first half of 2004. Quicksilver, a company that does coal seam gas drilling in the Midwest, was up more than 107% for the six months and 73% in the quarter. Western Gas, another coal seam gas producer, was up 38% year-to-date and up 28% for the quarter. We believe the Fund's outperformance in telecom was a testament to Columbia Wanger's niche stock-picking talent. While the telecom component of the Russell 2000 was the worst performing sector in the index (down 2% for the quarter), our telecom portion in Columbia Acorn USA was up 17%. We mentioned the growth of Western Wireless and Crown Castle International in our first quarter report. Both stocks showed continued strength in the second quarter. Western Wireless was up 24% in the quarter and had a six-month gain of over 57%. Crown Castle was up 17% for the quarter and 34% year-to-date. Regional phone company Commonwealth Telephone was another telecom winner. The stock was up 9% for the quarter and 19% year-to-date. Health care hurt performance. PPO network First Health was down 29% for the second quarter and off 20% year-to-date. Competitor pricing pressure dampened first quarter revenues. The company continued to generate a lot of cash--cash they have been using to buy back stock. We believe they are doing the right things in a tough environment. Par Pharmaceuticals, a generic drug manufacturer recently added to the Fund, missed its first quarter earnings and suffered from investor fears that the generics industry is becoming too competitive. We bought the stock because we like the way the company is run and expect recent R&D investments to begin paying off in 2005. Another new addition, Atherogenics, is developing a promising product to treat cardiovascular disease but investors fear unknowns that could come out in data to be released in the third quarter. We are willing to accept the risk if the payoff is high enough. In this case, we believe it could be. We have been tweaking our stock emphasis to try and capture market opportunities. In the financial sector, for example, we have shifted into banks that we believe may benefit if short rates rise. We're also trying to focus more on commercial banks over retail banks. In the health care sector, we believe there are opportunities in select companies that have not participated in the recent bull market. Short-term problems are making the outlook for these companies somewhat unclear but the fog could be masking sunny days ahead. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER ESCO'S TRIPLE PLAY -------------------------------------------------------------------------------- Esco Technologies manufactures filtration, communications and radio frequency shielding/testing equipment. Filtration is an attractive "razor blade" industry. Filters ("blades") generate higher profits than the original equipment ("razors") and generally have to be replaced on a regular basis, providing a predictable revenue stream. The communications segment's largest and highest growth product is its two-way automatic communications system. This system enables utilities to remotely read meters by transmitting data over existing electrical power lines and also allows for electrical grid load monitoring and control. The radio frequency shielding segment of Esco's business makes products that measure or contain electromagnetic emissions. This segment serves the health care, electronics and transportation industries and has a leading share of the market. For the first half of 2004, Esco's stock was up 22%. We like the company's long-term prospects given its future growth potential, strong cash flow, solid balance sheet and reasonable valuation. INVESTMENTS IN SMALL-CAP COMPANIES MAY BE SUBJECT TO GREATER VOLATILITY AND PRICE FLUCTUATIONS BECAUSE THEY MAY BE THINLY TRADED AND LESS LIQUID THAN INVESTMENTS IN LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: QUICKSILVER, 2.7%; WESTERN GAS, 1.2%; WESTERN WIRELESS, 3.5%; CROWN CASTLE INTERNATIONAL, 1.9%; COMMONWEALTH TELEPHONE, 1.9%; FIRST HEALTH, 1.5%; PAR PHARMACEUTICALS, 0.9%; ATHEROGENICS, 0.6%; ESCO TECHNOLOGIES, 2.0%. 1-800-922-6769 10 COLUMBIA ACORN USA >AT A GLANCE TICKER SYMBOL: AUSAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR LIFE OF TO DATE* 1 YEAR 5 YEARS FUND -------- ------ ------- ------- Returns before taxes 9.85% 34.66% 10.20% 14.42% Returns after taxes 9.85 34.66 9.65 13.67 on distributions Returns after taxes 6.40 22.53 8.62 12.46 on distributions and sale of fund shares Russell 2000 (pretax) 6.76 33.37 6.63 8.97 Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. COLUMBIA ACORN USA PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer Goods/Services 15.4% Health Care 15.1% Other* 8.8% Energy/Minerals 10.3% Finance 9.8% Industrial Goods/Services 6.7% Information 33.9% Software/Services 14.8% Telecommunications 9.1% Computer Related Hardware 6.7% Media 3.3% *Other includes cash and other assets less liabilities of 8.0%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z) >September 4, 1996 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Acorn USA at inception on September 4, 1996 to the Russell 2000 Index, a market-weighted index of 2,000 smaller U.S. companies formed by taking the largest 3,000 U.S. companies and eliminating the largest 1,000. The index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA ACORN USA NAV ON 6/30/04: $23.08 TOTAL NET ASSETS: $767.9 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ---------------------------------- 1 YEAR 5 YEARS LIFE OF FUND 34.66% 10.20% 14.42% COLUMBIA ACORN USA RUSSELL 2000 --------- ------------ 09/04/96 10720.00 10359.90 09/30/96 10810.00 10200.20 10/31/96 11260.00 10620.50 11/30/96 11650.00 10898.90 12/31/96 12210.00 11116.70 01/31/97 11920.00 10847.10 02/28/97 11480.00 10335.30 03/31/97 11420.00 10364.10 04/30/97 12510.00 11517.10 05/31/97 13320.00 12010.70 06/30/97 14000.00 12569.60 07/31/97 14350.00 12857.20 08/31/97 15340.00 13798.30 09/30/97 15140.00 13192.10 10/31/97 15170.00 13106.80 11/30/97 15413.10 13336.20 12/31/97 15076.70 13125.70 01/31/98 16320.40 14096.30 02/28/98 17400.90 14677.70 03/31/98 17992.10 14758.80 04/30/98 17227.60 13964.00 05/31/98 17525.00 13993.40 06/30/98 16591.90 12860.50 07/31/98 13936.00 10363.30 08/31/98 14151.30 11174.30 09/30/98 14653.80 11630.10 10/31/98 15402.40 12239.40 11/30/98 16305.10 12996.70 12/31/98 15776.20 13169.40 01/31/99 14894.90 12102.80 02/28/99 15016.10 12291.70 03/31/99 16095.70 13393.20 04/30/99 16734.70 13588.80 05/31/99 17650.20 14203.30 06/30/99 18047.90 13813.60 07/31/99 16821.80 13302.30 08/31/99 16866.00 13305.20 09/30/99 17860.10 13359.10 10/31/99 18810.00 14156.80 11/30/99 20059.00 15759.40 12/31/99 19053.10 15506.30 01/31/00 19867.40 18066.90 02/29/00 19819.50 16875.80 03/31/00 17568.10 15860.30 04/30/00 16526.20 14935.90 05/31/00 16834.00 16237.90 06/30/00 16748.30 15715.40 07/31/00 17765.20 16914.50 08/31/00 17642.60 16417.40 09/30/00 17654.90 15684.50 10/31/00 16625.70 14074.50 11/30/00 18255.20 15283.30 12/31/00 19406.90 16079.00 01/31/01 19370.10 15023.90 02/28/01 18904.60 14289.00 03/31/01 21195.70 15406.90 04/30/01 22384.10 15785.60 05/31/01 23008.90 16330.60 06/30/01 23254.00 15446.70 07/31/01 22616.90 14947.80 08/31/01 19345.60 12935.60 09/30/01 19394.60 13692.60 10/31/01 20546.30 14752.60 11/30/01 21770.20 15663.20 12/31/01 22031.20 15500.30 01/31/02 21285.60 15075.50 02/28/02 23099.80 16287.10 03/31/02 23447.70 16435.60 04/30/02 22130.60 15706.10 05/31/02 20801.00 14926.80 06/30/02 17967.90 12672.40 07/31/02 17706.90 12640.10 08/31/02 16389.80 11732.40 09/30/02 17172.60 12108.60 10/31/02 18663.70 13189.20 11/30/02 17744.20 12454.80 12/31/02 17483.30 12110.10 01/31/03 17247.20 11744.20 02/28/03 17284.50 11895.40 03/31/03 18974.40 13023.30 04/30/03 20962.50 14420.90 05/31/03 21298.00 14681.90 06/30/03 22304.50 15600.50 07/31/03 23534.70 16315.80 08/31/03 22988.00 16014.60 09/30/03 25348.90 17359.50 10/31/03 25908.10 17975.50 11/30/03 26106.90 18340.20 12/31/03 27461.30 19137.00 01/31/04 27585.60 19308.60 02/28/04 27399.20 19488.50 03/31/04 26728.20 18494.90 04/30/04 27796.80 18789.30 05/31/04 28679.00 19580.60 06/30/04 28679.00 19581.00 COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Western Wireless 3.5% RURAL CELLULAR PHONE SERVICES 2. AmeriCredit 2.8% AUTO LENDING 3. Quicksilver 2.7% NATURAL GAS & COAL SEAM GAS PRODUCER 4. Edwards Lifesciences 2.6% HEART VALVES 5. ITT Educational Services 2.0% TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 6. Esco Technologies 2.0% FILTRATION & TEST EQUIPMENT 7. Commonwealth Telephone 1.9% RURAL PHONE FRANCHISES & CLEC 8. Crown Castle International 1.9% COMMUNICATION TOWERS IN USA & UK 9. Zebra Technologies 1.9% BAR CODE PRINTERS 10. HCC Insurance Holdings 1.9% AVIATION INSURANCE The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 11 COLUMBIA ACORN INTERNATIONAL SELECT >IN A NUTSHELL [Photo of Todd M. Narter] [Photo of Christopher J. Olson] Columbia Acorn International Select rose 0.70% in the second quarter. By comparison, the Citigroup World ex-US Cap Range $2-10B Index was down 1.23%. In the first half of the year, the Fund was up 7.68%, outperforming the Citigroup World ex-US Cap Range $2-10B Index return of 7.29%. Big dollar winners for the quarter included Neopost, a French company that makes postage meters. The company was up 10% for the quarter and 18% for the half on solid results and continued growth. Talisman Energy, a Canadian oil and gas producer, was up 11% in the quarter and 15% for the six months due to higher oil prices and subsequent improvements in margins and profitability. Japan's Hoya, a maker of eyeglass lenses and opto-electrical components, finished the quarter up 8% and up 16% for the half. Jardine Lloyd Thompson Group in the United Kingdom was the Fund's biggest dollar loser this quarter. The company is an insurance broker offering marine, aviation, property and casualty insurance. Shares dropped 20% in the quarter due to the weaker dollar and the softer market for reinsurance this year. For the six months, shares are down over 20%. Despite the recent weakness in the stock price, management has continued to deliver good growth. With more than a 5% dividend yield, attractive valuation and strong management, we feel that the recent weakness may be overdone. Other laggards to performance included Venture, an electronic manufacturing services provider in Singapore, down 7% for the quarter and 9% for the six months. Sinotrans, a Chinese logistics provider, was down 12% in the quarter and 24% for the half year. USS Co., a Japanese used car auctioneer, was down 9% for the quarter but shares were up 7% for the six months. We sold the Fund's positions in both Sinotrans and USS Co. during the quarter. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER A BRAND YOU'VE NEVER -------------------------------------------------------------------------------- HEARD OF Funai Electric is a top-notch Japanese consumer electronics company and most people do not know that it owns such recognizable brands as Sylvania, Emerson and Symphonic. Funai Electric is a low-cost producer and has risen near the top in all of its major product lines. Globally it is the fourth largest maker of DVD players, second largest maker of VCR machines and the third largest maker of TV sets. Funai Electric has the best operating margins of any consumer electronics company in Japan but trades at a discount to its closest peers since its name is not well known. We believe the market is bound to take notice and we are hopeful that share price increases will follow. For the six months, the shares were up 8%. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. INVESTMENTS IN FOREIGN SECURITIES HAVE SPECIAL RISKS, INCLUDING POLITICAL OR ECONOMIC INSTABILITY, HIGHER COSTS, DIFFERENT REGULATIONS, ACCOUNTING STANDARDS, TRADING PRACTICES AND LEVELS OF INFORMATION, AND CURRENCY EXCHANGE RATE FLUCTUATIONS. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: NEOPOST, 3.3%; TALISMAN ENERGY, 2.5%; HOYA, 2.9%; JARDINE LLOYD THOMPSON GROUP, 1.7%; VENTURE, 2.0%; SINOTRANS, 0.0%; USS CO., 0.0%; FUNAI ELECTRIC, 3.3%. 1-800-922-6769 12 COLUMBIA ACORN INTERNATIONAL SELECT: >AT A GLANCE TICKER SYMBOL: ACFFX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR LIFE OF TO DATE* 1 YEAR 5 YEARS FUND -------- ------ ------- ---- Returns before taxes 7.68% 38.45% 4.01% 8.70% Returns after taxes 7.51 38.41 3.91 8.59 on distributions Returns after taxes 4.99 25.16 3.41 7.54 on distributions and sale of fund shares Citigroup World 7.29 42.32 6.19 7.23 ex-US Cap Range $2-10B (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. The return after taxes on distributions may be higher than the return before taxes due to qualified foreign tax credits. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. COLUMBIA ACORN INTERNATIONAL SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer Goods/Services 24.0% Finance 16.6% Other* 4.8% Information Technology 10.3% Energy/Minerals 9.2% Health Care 7.6% Industrial 27.5% Goods/Services *Other includes cash and other assets less liabilities of 3.2% THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT (CLASS Z) >November 23, 1998 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Acorn International Select at inception on November 23, 1998 to the Citigroup World ex-US Cap Range $2-10B Index, a subset of Citigroup's Broad Market Index, representing a mid-cap developed market index excluding the U.S. The index and Fund returns include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA ACORN INTERNATIONAL SELECT NAV ON 6/30/04: $15.63 TOTAL NET ASSETS: $44.7 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ------------------------------------ 1 YEAR 5 YEARS LIFE OF FUND 38.45% 4.01% 8.70% CITIGROUP WORLD COLUMBIA ACORN EX-US CAP INTERNATIONAL SELECT RANGE $2-10B -------------------- ------------ 11/23/98 10000 10000 11/30/98 10140 10045 12/31/98 11000 10339 1/31/99 11790 10310 2/28/99 11590 10052 3/31/99 11980 10449 4/30/99 12240 11032 5/31/99 12170 10567 6/30/99 13110 10953 7/31/99 13511 11362 8/31/99 13771 11490 9/30/99 13621 11530 10/31/99 14132 11535 11/30/99 16999 11864 12/31/99 19975 12772 1/31/00 19665 12154 2/29/00 24245 12311 3/31/00 23093 12680 4/30/00 21258 12172 5/31/00 18923 11976 6/30/00 19853 12611 7/31/00 19469 12203 8/31/00 20266 12586 9/30/00 19237 12168 10/31/00 18480 11791 11/30/00 16128 11440 12/31/00 17309 11998 1/31/01 17874 11939 2/28/01 15826 11505 3/31/01 13706 10607 4/30/01 14413 11391 5/31/01 14382 11293 6/30/01 13763 10999 7/31/01 13062 10723 8/31/01 12778 10626 9/30/01 10625 9392 10/31/01 11305 9769 11/30/01 11925 10118 12/31/01 12280 10140 1/31/02 11650 9841 2/28/02 11508 9991 3/31/02 11915 10562 4/30/02 12290 10756 5/31/02 12433 11097 6/30/02 12047 10712 7/31/02 10746 9753 8/31/02 10950 9730 9/30/02 10147 8859 10/31/02 10127 9017 11/30/02 10381 9476 12/31/02 10452 9209 1/31/03 9944 8978 2/28/03 9528 8810 3/31/03 9629 8660 4/30/03 10533 9425 5/31/03 11447 10101 6/30/03 11527 10389 7/31/03 11710 10806 8/31/03 12218 11429 9/30/03 12675 11900 10/31/03 13621 12819 11/30/03 13905 12927 12/31/03 14820 13781 1/31/04 15094 14071 2/28/04 15745 14410 3/31/04 15847 14970 4/30/04 15532 14460 5/31/04 15552 14420 6/30/04 15958 14786 COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Anglo Irish Bank (Ireland) 5.7% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Exel (United Kingdom) 4.2% GLOBAL LOGISTICS & FREIGHT FORWARDING 3. BG Group (United Kingdom) 3.7% OIL & GAS PRODUCER 4. Neopost (France) 3.3% POSTAGE METERS 5. Funai Electric (Japan) 3.3% CONSUMER ELECTRONICS 6. Daito Trust Construction (Japan) 3.3% APARTMENT BUILDER 7. Den Norske Bank (Norway) 3.2% LARGEST NORWEGIAN BANK 8. Komercni Banka (Czech Republic) 3.0% LEADING CZECH UNIVERSAL BANK 9. Sugi Pharmacy (Japan) 3.0% DRUGSTORES 10. Hoya (Japan) 2.9% OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 13 COLUMBIA ACORN SELECT >IN A NUTSHELL [Photo of Ben Andrews] Columbia Acorn Select increased 1.93% for the quarter, outperforming the S&P MidCap 400's 0.97% gain and the S&P 500's 1.72% return. Year-to-date through June 30, 2004, Columbia Acorn Select is up 7.42% vs. a 6.08% gain for the S&P MidCap 400 and a 3.44% gain for the S&P 500. The quarter's winners included Expeditors International, Safeway and ITT Educational Services, all up between 22% and 25%. Each of these companies reported strong first quarter results and we are bullish on future outlooks. Year-to-date through June 30, the Fund's performance drivers were Harley-Davidson, ITT Educational Services, and Abercrombie and Fitch, which were each up between 31% to 60% and added a combined $35 million profit to the Fund's portfolio. The biggest loser during the quarter and the six months was First Health. Weak demand for the company's managed-care programs, coupled with enhanced nationwide PPO offerings by many of its competitors, sent the stock down 20% in the first half of the year. We believe that First Health's network and new program offerings have a competitive advantage and should help the company gain share in the corporate market. We added two new names to the Fund's portfolio during the quarter: Skillsoft Publishing, an Internet-delivered software training company, and Tellabs, a manufacturer of telecom hardware. During the last three years of dismal telecom capital spending, Tellabs made inroads into new markets, such as data switching and fiber to residential users, while preserving its dominant market share in digital transport. We believe that cable and telephone companies worldwide will push to offer value-added services to their customers and Tellabs will be a beneficiary. As your new portfolio manager (as of March 11, 2004), I would like to assure you that my sole focus is to continue to deliver competitive performance. I am backed by the same analyst team, following the same investment process, to pursue the same investment objective, as the previous manager. This investment process has existed within Columbia Acorn's family for more than three decades and I intend to honor the process. /s/ Ben Andrews Ben Andrews LEAD PORTFOLIO MANAGER FRESHENING THE BUSINESS -------------------------------------------------------------------------------- Once a darling of Wall Street, grocery retailer Safeway has fallen from grace. The culprits: botched acquisitions, elevated labor and health care costs and increased competition. These factors have reduced the company's stock price by 65% from its early 2001 peak, but there just might be light at the end of the tunnel. Management has begun to clean up the company's acquisitions. Two-tier wage contracts in many of its markets and workers compensation reforms in California will improve labor expenses over time. Marketing programs touting the stores' freshness and quality are starting to improve store sales. In time, we believe these results should improve sales and margins, which could lead to an increase in Safeway's stock price. COLUMBIA ACORN SELECT IS A NON-DIVERSIFIED FUND. THE PERFORMANCE OF EACH OF ITS HOLDINGS WILL HAVE A GREATER IMPACT ON THE FUND'S TOTAL RETURN, AND MAY MAKE THE FUND'S RETURNS MORE VOLATILE THAN A MORE DIVERSIFIED FUND. MID-CAP STOCKS TEND TO BE MORE VOLATILE AND MAY BE LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. AS OF 6/30/04, THE FUND'S POSITIONS IN THE HOLDINGS MENTIONED WERE: EXPEDITORS INTERNATIONAL, 3.1%; SAFEWAY, 3.8%; HARLEY-DAVIDSON, 6.3%; ITT EDUCATIONAL SERVICES, 4.8%; ABERCROMBIE AND FITCH, 3.4%; FIRST HEALTH, 4.3%; SKILLSOFT PUBLISHING, 1.6%; TELLABS, 3.0%. 1-800-922-6769 14 COLUMBIA ACORN SELECT >AT A GLANCE TICKER SYMBOL: ACTWX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR LIFE TO DATE* 1 YEAR 5 YEARS OF FUND -------- ------ ------- ------- Returns before taxes 7.42% 20.40% 10.62% 14.74% Returns after taxes 7.42 20.24 10.06 14.22 on distributions Returns after taxes on 4.82 13.39 8.95 12.72 distributions and sale of fund shares S&P MidCap 400 6.08 27.98 9.05 11.40 (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. COLUMBIA ACORN SELECT PORTFOLIO DIVERSIFICATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Consumer Goods/Services 32.8% Finance 13.5% Health Care 7.1% Industrial Goods/Services 3.1% Other* 9.5% Information 34.0% *Cash and other assets less liabilities. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z) >November 23, 1998 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Acorn Select at inception on November 23, 1998 to the S&P MidCap 400, a broad, market-weighted index of 400 stocks that are in the next size/tier down from the S&P 500. The Index is unmanaged and returns for both the index and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA ACORN SELECT NAV ON 6/30/04: $19.55 TOTAL NET ASSETS: $989.0 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ------------------------------------ 1 YEAR 5 YEARS LIFE OF FUND 20.04% 10.62% 14.74% COLUMBIA S&P ACORN SELECT MIDCAP 400 ------------ ---------- 11/23/98 10030.00 9911.29 11/30/98 10710.00 11108.90 12/31/98 11000.00 10676.20 01/31/99 10710.00 10117.20 02/28/99 11480.00 10399.90 03/31/99 12710.00 11220.20 04/30/99 12730.00 11268.80 05/31/99 13040.00 11872.20 06/30/99 13190.00 11619.90 07/31/99 12060.00 11221.70 08/31/99 12110.00 10875.10 09/30/99 12970.00 11429.30 10/31/99 13250.00 12029.20 11/30/99 13848.00 12744.10 12/31/99 13474.00 12385.20 01/31/00 13554.90 13252.00 02/29/00 14171.50 14361.10 03/31/00 13463.90 13859.60 04/30/00 13100.00 13686.70 05/31/00 14319.80 13887.70 06/30/00 13931.30 14107.10 07/31/00 15431.30 15682.20 08/31/00 15798.20 15574.80 09/30/00 15927.70 15046.70 10/31/00 14381.60 13910.90 11/30/00 15465.20 14975.10 12/31/00 15913.90 15308.60 01/31/01 14983.60 14435.00 02/28/01 14403.50 13361.80 03/31/01 15454.20 14835.80 04/30/01 16297.00 15181.30 05/31/01 16023.40 15120.00 06/30/01 15870.20 14894.80 07/31/01 15125.90 14407.60 08/31/01 14206.50 12615.50 09/30/01 14513.00 13173.50 10/31/01 16023.40 14153.50 11/30/01 16702.50 14884.70 12/31/01 16373.50 14807.30 01/31/02 16022.60 14825.60 02/28/02 16581.90 15885.40 03/31/02 15682.60 15811.10 04/30/02 16143.20 15544.40 05/31/02 15869.00 14406.70 06/30/02 14860.10 13011.20 07/31/02 15222.00 13076.60 08/31/02 14520.10 12023.10 09/30/02 15320.70 12544.10 10/31/02 16088.40 13269.80 11/30/02 15397.50 12724.50 12/31/02 15331.70 12352.70 01/31/03 15375.50 12058.50 02/28/03 15682.60 12160.10 03/31/03 16581.90 13043.00 04/30/03 17481.20 14123.90 05/31/03 17941.80 14303.90 06/30/03 18808.10 14811.50 07/31/03 19586.80 15483.30 08/31/03 19159.10 15246.30 09/30/03 19861.00 16399.10 10/31/03 19718.40 16970.50 11/30/03 20110.90 17256.80 12/31/03 20663.40 17630.80 01/31/04 21204.90 18054.20 02/28/04 21193.80 18130.80 03/31/04 20586.10 17535.70 04/30/04 20917.60 17899.40 05/31/04 21602.70 18306.80 06/30/04 COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) 1. Harley-Davidson 6.3% MOTORCYCLES & RELATED MERCHANDISE 2. TCF Financial 5.8% GREAT LAKES BANK 3. McAfee 5.0% SECURITY SOFTWARE & SERVICES 4. ITT Educational Services 4.8% TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 5. First Health 4.3% PPO NETWORK 6. PeopleSoft 4.0% HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 7. Safeway 3.8% RETAIL FOOD & DRUG STORES 8. Interpublic Group 3.8% ADVERTISING 9. Synopsys 3.7% SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS 10. Tektronix 3.4% ANALYTICAL INSTRUMENTS The Fund's top 10 holdings and portfolio diversification vary with changes in portfolio investments. See the Statement of Investments for a complete list of the Fund's holdings. 15 COLUMBIA THERMOSTAT FUND >IN A NUTSHELL [Photo of Ralph Wanger] [PHOTO OF Charles P. McQuaid] Columbia Thermostat Fund was down 0.18% for the quarter but ended the six months up 2.74%. These returns were in line with the Lipper Flexible Portfolio Funds Index. As expected, Fund performance was in between the S&P 500 and the Lehman Brothers U.S. Credit Intermediate Bond Index (see Page 2 for index results). The first six months of 2004 favored our small-, mid-and value-stock funds in the portfolio. Columbia Mid Cap Value Fund, Columbia Acorn Fund, and Columbia Acorn Select were each up over 7.40% for the six-month period. Overall, Thermostat's equity portfolio had a 4.61% return year-to-date and the fixed income piece was up 0.17%. RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND Equities 2ND SIX-MONTH WEIGHTING QUARTER RETURNS TO FUND IN FUND RETURNS 6/30/04 ---------------------------------------------------------- Columbia 20% 1.65% 8.99% Acorn Fund ---------------------------------------------------------- Columbia 15% 1.93% 7.42% Acorn Select ---------------------------------------------------------- Columbia Growth 25% 1.01% -2.17% Stock Fund ---------------------------------------------------------- Columbia Growth 25% 0.42% 4.26% & Income Fund ---------------------------------------------------------- Columbia Mid Cap 15% 2.64% 7.86% Value Fund ---------------------------------------------------------- WEIGHTED AVERAGE 100% 1.37% 4.61%* ---------------------------------------------------------- * WEIGHTED AVERAGE RETURN OF EQUITY FUNDS IN THE PORTFOLIO. Fixed Income 2ND SIX-MONTH WEIGHTING QUARTER RETURNS TO FUND IN FUND RETURNS 6/30/04 ---------------------------------------------------------- Columbia Federal 30% -2.37% 0.11% Securities Fund ---------------------------------------------------------- Columbia Intermediate 50% -2.35% 0.14% Bond Fund ---------------------------------------------------------- Columbia High 20% -1.91% 0.32% Yield Fund ---------------------------------------------------------- WEIGHTED AVERAGE 100% -2.27%* 0.17%* ---------------------------------------------------------- * WEIGHTED AVERAGE RETURN FOR INCOME FUNDS IN THE PORTFOLIO. COLUMBIA THERMOSTAT FUND REBALANCING IN THE QUARTER ---------------------------------------------------------- APRIL 22, 2004: 50% stock, 50% fixed income MAY 21, 2004: 55% stock, 45% fixed income JUNE 23, 2004: 50% stock, 50% fixed income During the second quarter, the equity portion of the portfolio had a 1.37% gain vs. a 2.27% drop on the income side. As noted in the table below, the Fund hit three reallocation triggers during the second quarter. We increased bond exposure in the portfolio in April and June and increased stock fund exposure in May. Assets in Columbia Thermostat Fund were just over $183 million at the end of the period. We believe this is a good result for a fund that is less than two years old. We are pleased with the steady inflows of money and appreciate your investment. We will continue to strive to keep Fund results at an even temperature despite ongoing market volatility. /s/ Ralph Wanger /s/ Charles P. McQuaid Ralph Wanger Charles P. McQuaid CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER THE VALUE OF AN INVESTMENT IN THE FUND IS BASED PRIMARILY ON THE PERFORMANCE OF THE UNDERLYING PORTFOLIO FUNDS AND THE ALLOCATION OF THE FUND'S ASSETS AMONG THEM. AN INVESTMENT IN THE UNDERLYING FUNDS MAY PRESENT CERTAIN RISKS, INCLUDING STOCK MARKET FLUCTUATIONS THAT OCCUR IN RESPONSE TO ECONOMIC AND BUSINESS DEVELOPMENTS; AND A GREATER DEGREE OF SOCIAL, POLITICAL AND ECONOMIC VOLATILITY ASSOCIATED WITH INTERNATIONAL INVESTING. INVESTING IN SMALL-AND MID-CAP STOCKS MAY PRESENT SPECIAL RISKS INCLUDING POSSIBLE ILLIQUIDITY AND GREATER PRICE VOLATILITY THAN STOCKS OF LARGER, MORE ESTABLISHED COMPANIES. CHANGES IN INTEREST RATES AND CHANGES IN THE FINANCIAL STRENGTH OF ISSUERS OF LOWER-RATED BONDS MAY ALSO AFFECT UNDERLYING FUND PERFORMANCE. THE FUND IS ALSO SUBJECT TO THE RISK THAT THE INVESTMENT ADVISER'S DECISIONS REGARDING ASSET CLASSES AND PORTFOLIO FUNDS WILL NOT ANTICIPATE MARKET TRENDS SUCCESSFULLY, RESULTING IN A FAILURE TO PRESERVE CAPITAL OR LOWER TOTAL RETURN. IN ADDITION, THE FUND MAY BUY AND SELL SHARES OF THE PORTFOLIO FUNDS FREQUENTLY. THIS MAY RESULT IN HIGHER TRANSACTION COSTS AND ADDITIONAL TAX LIABILITY. THIS IS NOT AN OFFER OF THE SHARES OF ANY OTHER MUTUAL FUND MENTIONED HEREIN. 1-800-922-6769 16 COLUMBIA THERMOSTAT FUND >AT A GLANCE TICKER SYMBOL: COTZX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) >through June 30, 2004 YEAR TO LIFE OF DATE* 1 YEAR FUND ------- ------ ------- Returns before taxes 2.74% 12.91% 15.08% Returns after taxes 2.70 12.45 14.81 on distributions Returns after taxes on distribu- 1.79 8.46 12.77 tions and sale of fund shares S&P 500 (pretax) 3.44 19.11 22.82 Lehman U.S. Credit Intermediate -0.08 0.44 5.61 Bond Index (pretax) Lehman U.S. Govt. Intermediate -0.15 -0.48 1.99 Bond Index (pretax) Lipper Flexible Portfolio Funds 2.25 14.64 17.58 Index (pretax) Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the highest historical individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Returns after taxes on distributions and sale of fund shares reflect the additional tax impact of long-term gains or losses realized when fund shares are sold. The returns are taxed at the maximum rate and assume shares were purchased at the beginning of the period. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for class Z shares only; after-tax returns for other share classes will vary. Indexes do not reflect any deduction for fees, expenses or taxes. Investment returns and principal value may fluctuate, resulting in a gain or loss on sale. *Year to date data not annualized. PORTFOLIO WEIGHTINGS >as a % of assets in each investment category, as of June 30, 2004 [PIE CHART] STOCK MUTUAL FUNDS Columbia Acorn Fund 20% Columbia Acorn Select 15% Columbia Growth Stock Fund 25% Columbia Growth & Income Fund 25% Columbia Mid Cap Value Fund 15% BOND MUTUAL FUNDS Columbia Federal Securities Fund 30% Columbia Intermediate Bond Fund 50% Columbia High Yield Fund 20% THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA THERMOSTAT FUND (CLASS Z) >September 25, 2002 through June 30, 2004 This graph compares the results of $10,000 invested in Columbia Thermostat Fund at inception on September 25, 2002 to three indexes. The S&P 500 is a broad, market-weighted average of U.S. blue-chip company stock performance. The Lehman U.S. Govt. Bond Index is comprised of 1 to 10 year treasury and agency bonds, excluding targeted investor notes and state and local government series bonds. The Lehman U.S. Credit Intermediate Bond Index is the intermediate component of the U.S. Credit Index. The U.S. Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. The Indexes are unmanaged and returns for the indexes and the Fund include reinvested dividends and capital gains. It is not possible to invest directly in an index. The graph and table do not reflect tax deductions that a shareholder would pay on Fund distributions or the sale of Fund shares. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE CHANGES OVER TIME. VISIT COLUMBIAFUNDS.COM FOR DAILY UPDATES. COLUMBIA THERMOSTAT FUND NAV ON 6/30/04: $12.63 TOTAL NET ASSETS: $183.4 MILLION [MOUNTAIN CHART] AVERAGE ANNUAL TOTAL RETURN ------------------------------- 1 YEAR LIFE OF FUND 12.91% 15.08% COLUMBIA THERMOSTAT LEHMAN U.S. CREDIT LEHMAN U.S. GOVT. S&P 500 FUND INTERMEDIATE BOND INTERMEDIATE BOND ------- ----------- ----------------- ----------------- 09/30/02 9955.60 9850.00 10042.80 10038.80 10/31/02 10831.90 10220.00 9962.13 10032.00 11/30/02 11469.40 10700.00 10044.60 9952.60 12/31/02 10795.60 10410.00 10306.80 10136.50 01/31/03 10512.80 10260.00 10335.10 10114.10 02/28/03 10355.10 10100.00 10517.50 10228.30 03/31/03 10455.60 10190.00 10539.30 10230.50 04/30/03 11316.80 10710.00 10683.90 10259.20 05/31/03 11913.10 11200.00 10956.80 10420.30 06/30/03 12065.10 11348.00 10962.70 10403.20 07/31/03 12277.80 11418.00 10626.40 10150.40 08/31/03 12517.20 11648.20 10658.60 10168.70 09/30/03 12384.30 11618.20 10976.00 10389.10 10/31/03 13084.90 12018.40 10878.30 10287.30 11/30/03 13200.00 12148.50 10911.20 10288.10 12/31/03 13892.30 12470.60 11019.40 10368.30 01/31/04 14147.30 12642.80 11108.10 10424.50 02/28/04 14343.90 12784.60 11231.20 10523.90 03/31/04 14127.50 12835.20 11330.60 10597.10 04/30/04 13905.70 12571.90 11041.40 10360.30 05/31/04 14096.60 12612.40 10971.40 10327.10 06/30/04 14370.70 12812.50 11021.30 10265.90 COLUMBIA THERMOSTAT FUND ASSET ALLOCATION >as a % of net assets, as of June 30, 2004 [PIE CHART] Stock Mutual Funds 49.7% Bond Mutual Funds 49.8% Cash and Other Assets Less Liabilities 0.5% 17 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION American Tower 1,500,000 1,750,000 ASE Test (Taiwan) 780,000 1,380,000 Autobytel 0 500,000 Bearing Point 3,100,000 3,350,000 Ceridian 0 1,000,000 Concurrent Computer 2,325,000 4,656,000 Crown Castle International 3,500,000 4,000,000 E.Piphany 5,700,000 6,700,000 Entravision Communications 301,000 1,000,000 Fair Isaac 0 530,000 Gestevis Telecino 0 75,000 Igate Capital 4,550,000 4,656,000 Insight Communications 1,700,000 2,700,000 Integrated Circuit Systems 1,195,000 1,315,000 Jabil Circuit 1,420,000 1,500,000 Liberty Media International 0 131,000 Novell 11,000,000 11,500,000 Pegasus Systems 1,125,000 1,250,000 Plexus 1,300,000 1,600,000 Radiant Systems 1,500,000 1,575,000 Semtech 800,000 850,000 SES Global (Luxembourg) 1,337,000 2,537,000 Shuffle Master 827,000 940,000 Tellabs 5,700,000 8,700,000 ValueClick 1,954,000 2,000,000 Venture (Singapore) 2,710,000 3,150,000 Western Wireless 2,800,000 3,000,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Alliance Gaming 2,010,000 2,750,000 Ann Taylor 795,000 863,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Brookstone 130,500 600,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Callaway Golf 0 500,000 Carter's 53,000 369,000 Columbia Sportswear 200,000 400,000 Global Bio-Chem Technology Group (China) 14,730,000 30,000,000 Global Bio-Chem Technology Group (Warrants) (China) 0 1,841,250 HNI 0 1,600,000 Masonite International (Canada) 440,000 550,000 Natura Cosmeticos (Brazil) 0 500,000 NBTY 0 850,000 Orbitz 0 750,000 Otsuke Kagu (Japan) 0 210,000 Pacific Brands (Australia) 0 5,000,000 Rank Group (United Kingdom) 0 230,700 RC2 425,000 545,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES (CONTINUED) Sports Authority 0 773,000 Wacoal (Japan) 0 1,100,000 West Marine 0 823,000 Williams-Sonoma 607,000 1,400,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industrie (Netherlands) 720,000 737,560 Aviall 300,000 600,000 Dominion Homes 0 290,000 Exel (United Kingdom) 1,800,000 2,600,000 Genlyte Group 0 300,000 Jaako Poyry (Finland) 0 185,000 Sika (Switzerland) 0 25,000 Tenaris (Argentina) 605,000 750,000 United Services Group (Netherlands) 420,000 640,000 Vallourec (France) 66,000 95,000 Watts Water Technologies 543,000 554,000 Wienerberger (Austria) 700,000 787,500 ---------------------------------------------------------------------------- FINANCE Bank of the Ozarks 0 231,000 BOK Financial 1,524,000 1,638,000 CityBank Lynnwood 267,000 360,000 Credito Emiliano (Italy) 0 210,000 Cullen Frost Bankers 108,000 370,000 First Mutual Bancshares 76,000 125,000 Glacier Bancorp 1,917,500 2,187,000 (INCLUDES THE EFFECT OF A 5 FOR 4 STOCK SPLIT) Great Southern Bancorp 348,000 455,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Imperial Thrift & Loan 0 74,000 Jardine Lloyd Thompson (United Kingdom) 1,000,000 1,992,000 Komercni Banka (Czech Republic) 0 145,000 Northgate (United Kingdom) 0 784,000 Stewart Information Services 0 245,000 Texas Regional Bancshares 1,015,000 1,300,000 West Coast Bancorp 1,045,000 1,320,000 1-800-922-6769 18 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS (CONTINUED) ---------------------------------------------------------------------------- HEALTH CARE Accredo Health 0 450,000 Atherogenics 389,000 789,000 Bioveris 1,000,000 1,150,000 DOV Pharmaceuticals 0 1,165,000 Hogy Medical (Japan) 0 190,000 La Jolla Pharmaceutical 0 3,500,000 Lexicon Genetics 0 1,876,000 Ligand Pharmaceuticals 0 1,250,000 Myriad Genetics 160,000 460,000 Neurocrine Biosciences 0 360,000 NPS Pharmaceuticals 426,000 776,000 OPG Groep (Netherlands) 420,000 510,000 Par Pharmaceuticals 0 775,000 Pozen 0 1,709,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Chicago Bridge & Iron 428,000 700,000 Clayton Williams Energy 0 400,000 Clayton Williams Energy -- 40,000 Esprit Exploration (Canada) 0 3,458,200 FMC Technologies 1,900,000 2,300,000 Fugro (Netherlands) 250,000 333,000 Gamesa (Spain) 570,000 1,470,000 McMoRan Exploration 875,000 915,000 Nexen (Canada) 800,000 925,000 Noranda (Canada) 500,000 700,000 Range Resources 0 916,000 Tullow Oil (United Kingdom) 10,000,000 15,400,000 Western Gas 2,600,000 2,800,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) ---------------------------------------------------------------------------- OTHER INDUSTRIES Diamondrock Hospitality 0 1,000,000 Highland Hospitality 440,000 1,240,000 Northeast Utilities 1,350,000 1,650,000 Sponda (Finland) 875,000 1,352,600 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- INFORMATION Agilysys 1,410,000 710,000 Alliance Atlantis Communication (Canada) 750,000 500,000 American Management Systems 58,000 0 Aspect Communications 3,959,000 3,550,000 Avid Technology 1,800,000 1,600,000 Ciber 3,319,000 3,100,000 COMARCO 533,000 300,000 Commonwealth Telephone 900,000 800,000 Dionex 836,000 536,000 DoubleClick 2,000,000 1,400,000 Euronet Worldwide 406,000 286,000 Euronext (France) 725,000 0 Global Payments 1,487,000 1,457,000 Hit Entertainment (United Kingdom) 2,750,000 0 International Game Technology 8,768,000 6,700,000 Kronos 1,900,000 1,625,000 Neopost (France) 431,900 371,900 Perot Systems 900,000 205,000 RH Donnelley 150,000 119,000 RSA Security 2,500,000 2,200,000 Salem Communications 850,000 770,000 Skillsoft Publishing 9,800,000 9,500,000 Tech Data 780,000 680,000 TVB (Hong Kong) 3,300,000 224,700 Varian 668,000 428,000 Witness Systems 1,660,000 1,500,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Borders Group 1,400,000 1,300,000 Furniture Brands International 510,000 0 Helen of Troy 2,200,000 1,381,000 Hon Industries 1,455,000 0 Jones Apparel 418,000 0 SCP Pool 1,511,000 1,326,000 Shimano (Japan) 800,000 644,100 USS (Japan) 260,000 135,000 Whole Foods Market 500,000 350,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Expeditors International of Washington 2,900,000 2,750,000 G&K Services 725,000 550,000 Hub Group 759,000 549,000 Insituform Technologies 500,000 0 Labor Ready 1,900,000 1,800,000 Munters (Sweden) 590,000 0 Northwest Pipe Company 120,000 0 19 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED), CONTINUED NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES (CONTINUED) ---------------------------------------------------------------------------- FINANCE Harleysville Group 200,000 0 Irish Life & Permanent (Ireland) 1,000,000 959,400 Republic 1,798,000 1,698,000 ---------------------------------------------------------------------------- HEALTH CARE Aclara Biosciences 1,982,000 0 Applera Celera Genomics 900,000 0 Enzon 1,665,000 0 Gene Logic 210,000 0 Guilford Pharmaceuticals 316,000 0 Incyte Genomics 320,000 0 Kinetic Concepts 276,000 0 Nektar Therapeutics 2,055,000 1,055,000 Novoste 1,273,000 0 Patheon (Canada) 422,000 0 Pharmacyclics 528,000 0 ---------------------------------------------------------------------------- ENERGY/MINERALS Aquila 1,270,000 0 Evergreen Resources 1,460,000 0 Quicksilver 600,000 465,000 Westport Resources 517,000 0 XTO Energy 7,875,000 7,275,000 ---------------------------------------------------------------------------- OTHER INDUSTRIES Airports of Thailand (Thailand) 1,250,600 0 Chelsea Properties Group 400,000 0 Federal Realty Investment Trust 690,000 575,000 General Growth Properties 1,845,000 1,320,000 LNR Property 80,000 0 Macerich Company 800,000 635,000 Mills 725,000 620,000 Red Electrica (Spain) 899,800 799,800 The Rouse Company 1,160,000 825,000 Security Capital European Realty (Luxembourg) 299,275 194,827 Unisource Energy 800,000 0 1-800-922-6769 20 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- SECURITIES: 94.3% ---------------------------------------------------------------------------- INFORMATION: 24.9% SOFTWARE/SERVICES >BUSINESS SOFTWARE: 5.6% 11,500,000 Novell (b) $ 96,485 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 1,600,000 Avid Technology (b)(c) 87,312 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 1,625,000 Kronos (b)(c) 66,950 LABOR MANAGEMENT SOLUTIONS 3,450,000 PeopleSoft (b) 63,825 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 3,550,000 Aspect Communications (b) 50,410 CALL CENTER SOFTWARE 950,000 Micros Systems (b)(c) 45,571 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 1,875,000 McAfee (b) 33,994 SECURITY SOFTWARE & SERVICES 6,700,000 E.Piphany (b)(c) 32,361 CRM SOFTWARE 2,200,000 JDA Software Group (b)(c) 28,974 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 2,035,000 MRO Software (b)(c) 27,696 ENTERPRISE MAINTENANCE SOFTWARE 1,521,000 Sybase (b) 27,378 DATABASE SOFTWARE 6,000,000 Actuate (b)(c) 23,700 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 2,200,000 MAPICS (b)(c) 23,232 MID MARKET ERP SOFTWARE 3,000,000 Lawson Software (b) 21,240 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 1,500,000 Witness Systems (b)(c) 18,225 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 5,600,000 Indus International (b)(c) 11,760 ENTERPRISE ASSET MANAGEMENT SOFTWARE 500,000 SPSS (b) 8,985 STATISTICAL/BUSINESS ANALYSIS SOFTWARE 1,575,000 Radiant Systems (b)(c) 7,387 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 750,000 Netegrity (b) 6,345 ENTERPRISE SECURITY SOFTWARE 3,300,000 BSQUARE (b)(c) 3,300 SOFTWARE TO HELP DESIGN MOBILE DEVICES 1,250,000 ClickSoftware Technologies (b) 2,875 SERVICE CHAIN OPTIMIZATION SOFTWARE 70,000 Group 1 Software (b) 1,606 ADDRESS VERIFICATION SOFTWARE ---------------------------------------------------------------------------- 689,611 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 1.7% 1,200,000 Getty Images (b) 72,000 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,336,000 Navigant Consulting (b) 28,644 CONSULTING FIRM NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 2,685,000 InfoUSA (b)(c) $ 27,226 BUSINESS DATA FOR SALES LEADS 1,000,000 Ceridian (b) 22,500 HR SERVICES & PAYMENT PROCESSING 530,000 Fair Isaac 17,691 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 600,000 Information Holdings (b) 16,422 PATENT & OTHER BUSINESS INFORMATION 950,000 Administaff (b) 15,770 PROFESSIONAL EMPLOYER ORGANIZATION 119,000 RH Donnelley (b) 5,205 YELLOW PAGES PUBLISHER 1,700,000 PRIMEDIA (b) 4,726 SPECIALTY MAGAZINES & OTHER PUBLICATIONS ---------------------------------------------------------------------------- 210,184 >INTERNET: 1.3% 9,500,000 Skillsoft Publishing (b)(c) 72,200 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,200,000 RSA Security (b) 45,034 ENTERPRISE SECURITY SOFTWARE 2,000,000 ValueClick (b) 23,960 INTERNET ADVERTISING 1,400,000 DoubleClick (b) 10,878 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 500,000 Autobytel (b) 4,540 AUTO WEBSITES FOR SALES LEADS & ADVERTISING 1,879,808 Vital Stream, Cl. C (b)(c) 1,410 STREAMING SERVICES FOR THE INTERNET 250,000 NeoPlanet, Series A (d) 51 53,376 NeoPlanet, Series B (d) 18 WEB BROWSER ---------------------------------------------------------------------------- 158,091 >TRANSACTION PROCESSORS: 1.0% 1,457,000 Global Payments 65,594 CREDIT CARD PROCESSOR 1,250,000 Pegasus Systems (b)(c) 16,413 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 600,000 Cubic 12,558 REVENUE COLLECTION & DEFENSE SYSTEMS 5,000,000 Hong Kong Exchanges & Clearing (Hong Kong) 10,308 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 175,000 Deutsche Boerse (Germany) 8,910 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 286,000 Euronet Worldwide (b) 6,615 ATM PROCESSOR ---------------------------------------------------------------------------- 120,398 >COMPUTER SERVICES: 0.9% 3,350,000 Bearing Point (b) 29,714 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 4,600,000 AnswerThink Consulting (b)(c) 26,358 IT INTEGRATOR FOR FORTUNE 2000 3,100,000 Ciber (b)(c) 25,482 SOFTWARE SERVICES & STAFFING 4,656,000 Igate Capital (b)(c) 18,531 TECHNOLOGY STAFFING SERVICES 21 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >COMPUTER SERVICES--CONTINUED 2,300,000 Analysts International (b)(c) $ 7,084 TECHNOLOGY STAFFING SERVICES 1,025,000 New Horizons Worldwide (b)(c) 6,150 COMPUTER TRAINING SERVICES 205,000 Perot Systems (b) 2,720 BUSINESS CONSULTING & TECHNOLOGY STRATEGY ---------------------------------------------------------------------------- 116,039 >ELECTRONICS DISTRIBUTION: 0.6% 1,695,000 Avnet (b) 38,476 ELECTRONIC COMPONENTS DISTRIBUTION 680,000 Tech Data (b) 26,608 I/T DISTRIBUTOR 710,000 Agilysys 9,791 I/T DISTRIBUTOR ---------------------------------------------------------------------------- 74,875 >CONSUMER SOFTWARE: 0.5% 1,400,000 THQ (b) 32,060 ENTERTAINMENT SOFTWARE 1,125,000 Activision (b) 17,887 ENTERTAINMENT SOFTWARE 2,000,000 Pinnacle Systems (b) 14,300 VIDEO EDITING SOFTWARE & HARDWARE ---------------------------------------------------------------------------- 64,247 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.5% 494,000 Zebra Technologies (b) 42,978 BAR CODE PRINTERS 2,500,000 Seachange International (b)(c) 42,200 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 1,060,000 Avocent (b) 38,944 COMPUTER CONTROL SWITCHES 445,000 Rogers (b) 31,106 PCB LAMINATES & HIGH PERFORMANCE FOAMS 1,525,000 Unova (b) 30,881 BARCODE & WIRELESS LAN SYSTEMS 371,900 Neopost (France) 22,008 POSTAGE METERS 625,000 Excel Technologies (b)(c) 20,781 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 2,900,000 3Com (b) 18,125 NETWORKING EQUIPMENT 1,575,000 Cable Design Technologies (b)(c) 16,695 NETWORKING & SPECIALTY CABLES 535,000 II VI (b) 16,403 LASER COMPONENTS 1,350,000 CTS 16,281 ELECTRONIC COMPONENTS, SENSORS & EMS 4,656,000 Concurrent Computer (b)(c) 9,219 VIDEO ON DEMAND SYSTEMS & SERVICES 230,000 Applied Films (b) 6,675 THIN-FILM GLASS COATING EQUIPMENT 351,000 Phoenixtec Power (Taiwan) 346 UNINTERRUPTIBLE POWER SUPPLIES ---------------------------------------------------------------------------- 312,642 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >GAMING EQUIPMENT: 2.4% 6,700,000 International Game Technology $ 258,620 SLOT MACHINES & PROGRESSIVE JACKPOTS 940,000 Shuffle Master (b) 34,131 CARD SHUFFLERS, CASINO GAMES & SLOT MACHINES ---------------------------------------------------------------------------- 292,751 >INSTRUMENTATION: 1.2% 810,000 Mettler Toledo (b) 39,803 LABORATORY EQUIPMENT 1,350,000 Trimble Navigation (b) 37,517 GPS-BASED INSTRUMENTS 536,000 Dionex (b) 29,571 ION & LIQUID CHROMATOGRAPHY 2,300,000 Spectris (United Kingdom) 20,859 ELECTRONIC INSTRUMENTATION & CONTROLS 428,000 Varian (b) 18,040 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- 145,790 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.1% 1,315,000 Integrated Circuit Systems (b) 35,715 SILICON TIMING DEVICES 685,000 Littelfuse (b) 29,051 LITTLE FUSES 850,000 Semtech (b) 20,009 ANALOG SEMICONDUCTORS 1,380,000 Ase Test (Taiwan) (b) 10,171 SEMICONDUCTOR PACKAGING & TEST SERVICES 1,250,000 IXYS (b) 9,850 POWER SEMICONDUCTORS 565,000 Supertex (b) 9,232 MIXED-SIGNAL SEMICONDUCTORS 664,000 Asyst Technologies (b) 6,866 SEMICONDUCTOR FAB AUTOMATION EQUIPMENT 361,000 Actel (b) 6,678 FIELD PROGRAMMABLE GATE ARRAYS 604,000 Pericom Semiconductor (b) 6,469 SEMICONDUCTORS - INTERFACE INTEGRATED CIRCUITS ---------------------------------------------------------------------------- 134,041 >CONTRACT MANUFACTURING: 0.8% 1,500,000 Jabil Circuit (b) 37,770 ELECTRONIC MANUFACTURING SERVICES 3,150,000 Venture (Singapore) 33,115 ELECTRONIC CONTRACT MANUFACTURER 1,600,000 Plexus (b) 21,600 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- 92,485 TELECOMMUNICATIONS >MOBILE COMMUNICATIONS: 1.7% 3,000,000 Western Wireless (b) 86,730 RURAL CELLULAR PHONE SERVICES 4,000,000 Crown Castle International (b) 59,000 COMMUNICATION TOWERS IN USA & UK 520,000 Telephone & Data Systems 37,024 CELLULAR & TELEPHONE SERVICES 1,750,000 American Tower (b) 26,600 COMMUNICATION TOWERS IN USA & MEXICO 1-800-922-6769 22 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >MOBILE COMMUNICATIONS--CONTINUED 300,000 COMARCO (b) $ 2,115 WIRELESS NETWORK TESTING ---------------------------------------------------------------------------- 211,469 >TELECOMMUNICATION EQUIPMENT: 1.2% 8,700,000 Tellabs (b) 76,038 TELECOMMUNICATIONS & CABLE EQUIPMENT 830,000 Plantronics (b) 34,943 COMMUNICATION HEADSETS 1,600,000 Andrew (b) 32,016 WIRELESS INFRASTRUCTURE EQUIPMENT 1,200,000 Symmetricom (b) 10,680 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- 153,677 >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 0.3% 800,000 Commonwealth Telephone (b) 35,816 RURAL PHONE FRANCHISES & CLEC ---------------------------------------------------------------------------- MEDIA >TELEVISION PROGRAMMING/CATV: 1.0% 2,700,000 Insight Communications (b)(c) 25,002 CATV FRANCHISES IN MIDWEST 2,605,000 Liberty Media (b) 23,419 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 1,150,000 Corus Entertainment (Canada) 22,297 TELEVISION PROGRAMMING & RADIO STATIONS 2,500,000 Mediacom Communications (b) 19,550 CABLE TELEVISION FRANCHISES 2,379,000 United Global Com (b) 17,272 VIDEO, VOICE & DATA SERVICES OUTSIDE THE USA 500,000 Alliance Atlantis Communication (Canada) (b) 9,317 CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION 131,000 Liberty Media International (b) 4,860 CATV HOLDING COMPANY ---------------------------------------------------------------------------- 121,717 >RADIO BROADCASTING: 0.6% 770,000 Salem Communications (b) 20,890 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 1,200,000 Cumulus Media, Cl. A (b) 20,172 RADIO STATIONS IN SMALL CITIES 992,000 Saga Communications (b)(c) 18,104 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,200,000 Spanish Broadcasting (b) 11,172 SPANISH LANGUAGE RADIO STATIONS ---------------------------------------------------------------------------- 70,338 >TV/SATELLITE BROADCASTING: 0.5% 2,537,000 SES Global (Luxembourg) 21,447 SATELLITE BROADCASTING SERVICES 1,400,000 Gray Television 19,446 MID MARKET AFFILIATED TV STATIONS 1,000,000 Entravision Communications (b) 7,680 SPANISH LANGUAGE TV, RADIO & OUTDOOR 270,000 Metropole TV (France) 7,633 TELEVISION BROADCASTER 200,000 Young Broadcasting (b) 2,630 TELEVISION STATIONS NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- 75,000 Gestevis Telecino (Spain) (b) $ 1,119 SPAIN'S SECOND LARGEST BROADCASTER 224,700 TVB (Hong Kong) 970 TELEVISION PROGRAMMING & BROADCASTING ---------------------------------------------------------------------------- 60,925 ----------- INFORMATION: TOTAL 3,065,096 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 21.8% SERVICES >RETAIL: 6.6% 2,495,000 Chico's FAS (b) 112,674 WOMEN'S SPECIALTY RETAILER 1,600,000 Michaels Stores 88,000 CRAFT & HOBBY SPECIALTY RETAILER 3,743,000 Christopher & Banks (c) 66,288 WOMEN'S APPAREL RETAILER 2,265,000 Aeropostale (b) 60,951 MALL BASED TEEN RETAILER 788,000 Urban Outfitters (b) 47,997 ECLECTIC HOME & APPAREL RETAILER 1,400,000 Williams Sonoma (b) 46,144 HOME GOODS & FURNISHING RETAILER 5,100,000 Winn Dixie Stores 36,720 SUPERMARKETS IN THE SOUTHEAST US 895,000 Abercrombie & Fitch 34,681 TEEN APPAREL RETAILER 350,000 Whole Foods Market 33,408 NATURAL FOOD SUPERMARKETS 1,015,000 Petco Animal Supplies (b) 32,693 PET SUPPLIES & SERVICES 1,300,000 Borders Group 30,472 BOOKSTORES 1,072,000 Zale (b) 29,223 SPECIALTY RETAILER OF JEWELRY 1,370,000 Hot Topic (b) 28,071 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 773,000 Sports Authority (b) 27,751 SPORTING GOODS STORES 863,000 Ann Taylor (b) 25,010 WOMEN'S APPAREL RETAILER 823,000 West Marine (b) 22,098 LARGEST RETAILER OF BOATING SUPPLIES 700,000 Genesco (b) 16,541 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 200,000 Fast Retailing (Japan) 16,251 APPAREL RETAILER 1,700,000 Burberry Group (United Kingdom) 12,630 APPAREL RETAILER 600,000 Brookstone (b) 12,030 SPECIALTY CONSUMER PRODUCT RETAILER 2,250,000 Esprit Holdings (Hong Kong) (b) 10,117 GLOBAL APPAREL BRAND MANAGER 210,000 Otsuke Kagu (Japan) 6,556 FURNITURE RETAILER 950,000 Gaiam (b)(c) 6,441 HEALTHY LIVING CATALOG & E-COMMERCE $ 6,000 Gadzooks 5% Convertible 10/07/08 (b)(d) 2,941 TEEN APPAREL RETAILER ---------------------------------------------------------------------------- 805,688 23 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONSUMER SERVICES: 1.6% 2,250,000 ITT Educational Services (b) $ 85,545 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 775,000 Weight Watchers (b) 30,334 WEIGHT LOSS PROGRAMS 1,290,000 Coinstar (b)(c) 28,341 OWNER/OPERATOR OF COIN COUNTING MACHINES 900,000 Central Parking 16,821 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 1,750,000 Princeton Review (b)(c) 13,248 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 11,750 NATIONAL CHAIN OF FITNESS CENTERS 135,000 USS (Japan) 11,615 USED CAR AUCTIONEER ---------------------------------------------------------------------------- 197,654 >ENTERTAINMENT/LEISURE PRODUCTS: 1.5% 805,000 International Speedway Motors 39,155 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,250,000 Leapfrog Enterprises (b) 24,862 EDUCATIONAL TOYS 2,765,000 Six Flags (b) 20,074 WORLDWIDE THEME PARK OPERATOR 545,000 RC2 (b) 19,348 COLLECTIBLES & TOYS 1,276,000 Action Performance (c) 19,229 MOTORSPORT COLLECTIBLES & MERCHANDISING 370,000 Amer Group (Finland) 19,281 BRANDED SPORTING GOODS 363,000 Speedway Motorsports 12,139 MOTORSPORT RACETRACK OWNER & OPERATOR 1,750,000 Magna Entertainment, Cl. A (Canada) (b) 10,325 OWNER/OPERATOR THOROUGHBRED RACETRACKS 500,000 Natura Cosmetics (Brazil) (b) 8,042 DIRECT SALES OF HIGH-END COSMETICS 500,000 Callaway Golf 5,670 PREMIUM GOLF CLUBS & BALLS 345,000 Intralot (Greece) 5,485 LOTTERY & GAMING SYSTEMS & SERVICES ---------------------------------------------------------------------------- 183,610 >CASINOS: 1.4% 2,750,000 Alliance Gaming (b)(c) 47,190 DIVERSIFIED GAMING COMPANY 890,000 Station Casinos 43,076 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 32,900 REGIONAL RIVERBOAT CASINOS 1,925,000 Pinnacle Entertainment (b)(c) 24,274 REGIONAL RIVERBOAT CASINOS 5,000,000 Sky City Entertainment (New Zealand) 15,143 CASINO/ENTERTAINMENT COMPLEX 805,000 Monarch Casino & Resort (b)(c) 11,350 CASINO/HOTEL IN RENO 226,000 Lakes Entertainment (b) 2,619 GAMING ENTREPRENEUR 230,700 Rank Group (United Kingdom) 1,257 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 177,809 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TRAVEL: 1.0% 2,314,500 Intrawest (Canada) $ 36,921 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 28,392 OWNER/FRANCHISER OF MID-PRICED HOTELS 1,115,000 Vail Resorts (b) 21,363 OWNER/OPERATOR OF SKI RESORTS 959,000 Navigant International (b)(c) 17,061 CORPORATE TRAVEL AGENCY 750,000 Orbitz (b)(c) 16,215 ONLINE TRAVEL DISTRIBUTION 720,000 Jurys Doyle Hotel (Ireland) 9,123 HOTEL GROUP ---------------------------------------------------------------------------- 129,075 >RESTAURANTS: 0.8% 2,000,000 AFC Enterprises (b)(c) 43,000 POPEYES, CHURCHES FRIED CHICKEN 1,447,000 Autogrill (Italy) (b) 20,534 TOLLWAY RESTAURANTS 155,000 Kappa Create (Japan) 10,742 155,000 Kappa Create New Shares (Japan) 10,398 SUSHI CHAIN RESTAURANT OPERATOR 243,000 Cheesecake Factory (b) 9,669 CASUAL DINING RESTAURANTS ---------------------------------------------------------------------------- 94,343 >CRUISE LINES: 0.1% 400,000 Carnival 18,800 LARGEST CRUISE LINE ---------------------------------------------------------------------------- GOODS >APPAREL: 2.0% 2,840,000 Coach (b) 128,340 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 564,000 Oxford Industries 24,568 BRANDED & PRIVATE LABEL APPAREL 400,000 Columbia Sportswear (b) 21,848 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES 3,000,000 Billabong International (Australia) 17,219 SURFWEAR APPAREL MANUFACTURER 828,000 Steven Madden (b)(c) 16,535 WHOLESALER/RETAILER OF FASHION FOOTWEAR 1,100,000 Wacoal (Japan) 11,695 WOMEN'S SPECIALTY APPAREL 369,000 Carter's (b) 10,742 CHILDREN'S BRANDED APPAREL 5,000,000 Pacific Brands (Australia) (b) 9,274 DOMINANT AUSTRALIAN APPAREL BRAND MANAGER ---------------------------------------------------------------------------- 240,221 >FURNITURE/TEXTILES: 1.9% 1,600,000 HNI 67,728 OFFICE FURNITURE & FIREPLACES 1,900,000 Herman Miller 54,986 OFFICE FURNITURE 740,000 Mohawk Industries (b) 54,264 CARPET & FLOORING 422,000 American Woodmark (c) 25,257 KITCHEN CABINETS 1,700,000 Nobia (Sweden) 20,023 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION 1-800-922-6769 24 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FURNITURE/TEXTILES--CONTINUED 550,000 Masonite International (Canada) (b) $ 14,186 DOOR MANUFACTURER ---------------------------------------------------------------------------- 236,444 >LEISURE VEHICLES: 1.5% 1,745,000 Harley-Davidson 108,085 MOTORCYCLES & RELATED MERCHANDISE 1,495,000 Monaco Coach (c) 42,114 RECREATIONAL VEHICLES 550,000 Polaris Industries 26,400 MANUFACTURER OF LEISURE VEHICLES & RELATED PRODUCTS 2,850,000 Ducati Motor (Italy) (b) 3,995 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- 180,594 >DURABLE GOODS: 1.3% 1,326,000 SCP Pool 59,670 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 605,000 Hunter Douglas (Netherlands) 29,455 WINDOW SHADES & VENETIAN BLINDS 465,000 Hyundai Mobis (South Korea) 20,716 AUTO PARTS 10,000,000 Techtronic Industries (Hong Kong) 15,978 POWER TOOLS 105,000 Funai Electric (Japan) 15,852 CONSUMER ELECTRONICS 644,100 Shimano (Japan) 15,326 BICYCLE COMPONENTS & FISHING TACKLE ---------------------------------------------------------------------------- 156,997 >NONDURABLES: 1.1% 895,000 Scotts Company (b) 57,173 CONSUMER LAWN & GARDEN PRODUCTS 1,381,000 Helen of Troy (b) 50,917 HAIRDRYERS & CURLING IRONS 255,000 Uni-Charm (Japan) 12,704 INFANT HYGIENE & FEMININE CARE PRODUCTS 601,000 First Years (c) 11,179 INFANT & TODDLER PRODUCTS ---------------------------------------------------------------------------- 131,973 >FOOD & Beverages: 1.0% 1,600,000 Kerry (Ireland) 33,894 FOOD INGREDIENTS 850,000 NBTY (b) 24,981 VITAMINS & SUPPLEMENTS 30,000,000 Global Bio-Chem Technology Group (China) 21,789 1,841,250 Global Bio-Chem Technology Group Warrants (China) (b) 120 CHINESE REFINER OF CORN-BASED COMMODITIES 4,000,000 Lion Nathan (Australia) 18,845 BEER BREWER/DISTRIBUTOR 725,000 Orkla (Norway) 18,132 DIVERSIFIED CONSUMER GOODS 180,000 Davide Campari (Italy) 8,885 SPIRITS & WINE ---------------------------------------------------------------------------- 126,646 ----------- CONSUMER GOODS/SERVICES: TOTAL 2,679,854 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 13.5% >LOGISTICS: 2.4% 2,750,000 Expeditors International of Washington $ 135,877 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 47,421 INTERNATIONAL FREIGHT FORWARDER 1,000,000 Forward Air (b) 37,400 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 2,600,000 Exel (United Kingdom) 36,255 GLOBAL LOGISTICS & FREIGHT FORWARDING 549,000 Hub Group (b)(c) 18,721 TRUCK & RAIL FREIGHT FORWARDER 40,000,000 Sinotrans (China) 14,405 INTEGRATED LOGISTICS IN CHINA 11,000,000 Sembcorp Logistics (Singapore) 11,778 LOGISTIC SERVICES FOR MARINE TRANSPORT ---------------------------------------------------------------------------- 301,857 >MACHINERY: 1.6% 2,250,000 Ametek 69,525 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,050,000 Esco Technologies (b)(c) 56,028 FILTRATION & TEST EQUIPMENT 840,000 Pentair 28,258 PUMPS, WATER TREATMENT & TOOLS 785,000 Gardner Denver (b) 21,901 AIR COMPRESSORS, BLOWERS & PUMPS 500,000 Cobham (United Kingdom) 12,683 AEROSPACE 150,000 Tennant 6,218 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT ---------------------------------------------------------------------------- 194,613 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.6% 2,550,000 Spartech (c) 66,147 PLASTICS DISTRIBUTION & COMPOUNDING 47,000 Geberit International (Switzerland) 31,331 PLUMBING SUPPLIES 1,000,000 Schulman 21,490 PLASTICS DISTRIBUTION & COMPOUNDING 37,000 Givaudan (Switzerland) 21,451 INDUSTRIAL FRAGRANCES & FLAVORS 450,000 Novozymes (Denmark) 20,305 INDUSTRIAL ENZYMES 25,000 Sika (Switzerland) (b) 13,763 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 200,000 Imerys (France) 11,660 INDUSTRIAL MINERALS PRODUCER 347,000 SYMYX (b) 8,370 MATERIALS & CHEMICALS ---------------------------------------------------------------------------- 194,517 >INDUSTRIAL GOODS: 1.5% 1,400,000 Clarcor (c) 64,120 MOBILE & INDUSTRIAL FILTERS 1,500,000 Donaldson 43,950 INDUSTRIAL AIR FILTRATION 25 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >INDUSTRIAL GOODS--CONTINUED 804,000 Mine Safety Appliances $ 27,095 SAFETY EQUIPMENT 300,000 Genlyte Group (b) 18,864 COMMERCIAL LIGHTING FIXTURES 500,000 Intermagnetics General (b) 17,015 SUPERCONDUCTING WIRE 100,000 Bacou Dalloz (France) 7,424 SAFETY EQUIPMENT 309,000 Electric City (b) 584 ELECTRICITY CONSERVATION DEVICES ---------------------------------------------------------------------------- 179,052 >INDUSTRIAL DISTRIBUTION: 1.4% 1,525,000 Watsco (c) 42,807 HVAC DISTRIBUTION 600,000 Hughes Supply 35,358 INDUSTRIAL DISTRIBUTION 1,375,000 Airgas 32,876 INDUSTRIAL GAS DISTRIBUTOR 3,800,000 Grafton Group (Ireland) (b) 30,321 BUILDERS, WHOLESALERS & DIY RETAILING 900,000 Nuco2 (b)(c) 17,730 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS 600,000 Aviall (b) 11,406 AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR ---------------------------------------------------------------------------- 170,498 >WATER: 1.0% 856,000 Cuno (b)(c) 45,668 FILTRATION & FLUIDS CLARIFICATION 2,600,000 Tetra Tech (b) 42,432 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 900,000 Pall 23,571 FILTRATION & FLUIDS CLARIFICATION 554,000 Watts Water Technologies 14,930 WATER, VALVES, REGULATORS & FILTRATION ---------------------------------------------------------------------------- 126,601 >CONSTRUCTION: 1.0% 787,500 Wienerberger (Austria) 27,473 BRICKS & CLAY ROOFING TILES 488,000 Simpson 27,387 WALL JOINT MAKER 638,000 Florida Rock Industries 26,904 CONCRETE & AGGREGATES 380,000 Daito Trust Construction (Japan) 14,612 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) (b) 8,634 LOW/MEDIUM INCOME HOME BUILDER 750,000 McCarthy & Stone (United Kingdom) 7,925 BUILDER OF RETIREMENT APARTMENTS 290,000 Dominion Homes (b) 6,699 OHIO/KENTUCKY HOME BUILDER ---------------------------------------------------------------------------- 119,634 >STEEL: 1.0% 1,900,000 Gibraltar Steel (c) 62,358 STEEL PROCESSING 750,000 Tenaris (Argentina) 24,563 STEEL PIPE FOR OIL WELLS & PIPELINES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 1,050,000 Worthington Industries $ 21,557 STEEL PROCESSING 95,000 Vallourec (France) 9,339 SEAMLESS TUBES ---------------------------------------------------------------------------- 117,817 >OTHER INDUSTRIAL SERVICES: 0.9% 1,500,000 Clark/Bardes Consulting (b)(c) 27,825 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 825,000 Mobile Mini (b)(c) 23,438 LEASES PORTABLE STORAGE UNITS 550,000 G&K Services 22,104 UNIFORM RENTAL 1,125,000 Ushio (Japan) 20,353 INDUSTRIAL LIGHT SOURCES 60,000 Schindler (Switzerland) 17,238 ELEVATOR MANUFACTURER & SERVICE PROVIDER 185,000 Jaakko Poyry (Finland) 4,673 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY ---------------------------------------------------------------------------- 115,631 >OUTSOURCING SERVICES & Training: 0.6% 1,800,000 Labor Ready (b) 27,900 TEMPORARY MANUAL LABOR 525,000 Bilfinger Berger (Germany) 18,167 CONSTRUCTION & RELATED SERVICES 9,500,000 Li & Fung (Hong Kong) 13,928 SOURCING OF CONSUMER GOODS 640,000 United Services Group (Netherlands) 10,443 TEMPORARY STAFFING SERVICES 600,000 GP Strategies (b) 3,954 TRAINING PROGRAMS ---------------------------------------------------------------------------- 74,392 >CONGLOMERATES: 0.3% 737,560 Aalberts Industrie (Netherlands) 22,086 FLOW CONTROL & HEAT TREATMENT 5,550 Pargesa (Switzerland) 14,945 INDUSTRIAL & MEDIA HOLDINGS ---------------------------------------------------------------------------- 37,031 >INDUSTRIAL SUPPLIERS: 0.2% 1,800,000 Xstrata (United Kingdom) 24,118 DIVERSIFIED MINING HOLDING COMPANY ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 1,655,761 ---------------------------------------------------------------------------- FINANCE: 12.3% >BANKS: 5.1% 1,751,000 TCF Financial 101,646 GREAT LAKES BANK 2,412,000 Associated Banc-Corp 71,468 MIDWEST BANK 1,638,000 BOK Financial (b) 64,324 OKLAHOMA BANK 2,187,000 Glacier Bancorp (c) 61,608 MOUNTAIN STATES BANK 1,300,000 Texas Regional Bancshares 59,683 SOUTH TEXAS BANK 1-800-922-6769 26 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BANKS--CONTINUED 3,300,000 Anglo Irish Bank (Ireland) $ 51,693 SMALL BUSINESS & MIDDLE MARKET BANKING 1,320,000 West Coast Bancorp (c) 28,301 PORTLAND SMALL BUSINESS LENDER 1,850,000 Depfa Bank (Ireland) 27,005 INTERNATIONAL PUBLIC SECTOR FINANCE 1,698,000 Republic 23,602 MICHIGAN BANK 605,000 Chittenden 21,266 VERMONT & WESTERN MASSACHUSETTS BANK 2,800,000 Den Norske Bank (Norway) 19,099 LARGEST NORWEGIAN BANK 370,000 Cullen Frost Bankers 16,557 TOP SAN ANTONIO BANK 145,000 Komercni Banka (Czech Republic) 16,266 LEADING CZECH UNIVERSAL BANK 455,000 Great Southern Bancorp 13,309 MISSOURI REAL ESTATE LENDER 360,000 CityBank Lynnwood 11,527 SEATTLE REAL ESTATE LENDER 400,000 CorpBanca (Chile) (b)(d) 9,560 CHILE'S 3RD LARGEST LOCAL BANK 231,000 Bank of the Ozarks 5,382 ARKANSAS BANK 82,000 BankFirst 4,899 OKLAHOMA COMMUNITY BANK 170,000 Midwest Bank 3,791 CHICAGO BANK 82,000 First Financial BankShares 3,438 WEST TEXAS COMMUNITY BANK 188,000 Cascade Financial 3,290 SEATTLE COMMUNITY BANK 125,000 First Mutual Bancshares 3,156 SEATTLE COMMUNITY BANK 210,000 Credito Emiliano (Italy) 1,727 ITALIAN REGIONAL BANK 47,000 West Bancorporation 822 DES MOINES SMALL BUSINESS BANK ---------------------------------------------------------------------------- 623,419 >INSURANCE: 2.6% 1,320,000 HCC Insurance Holdings 44,101 AVIATION INSURANCE 720,000 Philadelphia Consolidated Holding (b) 43,250 SPECIALTY INSURANCE 826,000 Leucadia National 41,052 INSURANCE HOLDING COMPANY 995,000 Protective Life 38,477 LIFE INSURANCE 138,000 Markel (b) 38,295 SPECIALTY INSURANCE 1,000,000 RLI 36,500 SPECIALTY INSURANCE 400,000 Selective Insurance Group 15,952 COMMERCIAL & PERSONAL LINES INSURANCE 650,000 Scottish Re Group 15,113 LIFE REINSURER 1,992,000 Jardine Lloyd Thompson (United Kingdom) 14,851 BUSINESS INSURANCE BROKER NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 210,000 StanCorp Financial $ 14,070 GROUP LIFE, DISABILITY & 401K 700,000 United National Group (b) 10,577 SPECIALTY INSURANCE 245,000 Stewart Information Services 8,274 TITLE COMPANY ---------------------------------------------------------------------------- 320,512 >SAVINGS & LOANS: 2.3% 3,276,000 Peoples Bank Bridgeport 102,047 CONNECTICUT SAVINGS & LOAN 1,227,000 Downey Financial 65,338 CALIFORNIA HOME LENDER 1,178,000 Anchor Bancorp Wisconsin (c) 31,146 WISCONSIN THRIFT 700,000 First Federal Capital 19,481 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 19,131 PREMIER MORTGAGE LENDER IN INDIA 709,000 Washington Federal 17,016 OLD FASHIONED MORTGAGE LENDER 959,400 Irish Life & Permanent (Ireland) 14,787 SAVINGS PRODUCTS 200,000 Bankinter (Spain) 7,621 MORTGAGE LENDER 74,000 Imperial Thrift & Loan (b) 3,002 SAN DIEGO SPECIALTY LENDER ---------------------------------------------------------------------------- 279,569 >FINANCE COMPANIES: 1.4% 5,831,000 AmeriCredit (b) 113,879 AUTO LENDING 1,820,000 World Acceptance (b)(c) 33,361 PERSONAL LOANS 784,000 Northgate (United Kingdom) 9,878 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 500,000 Intermediate Capital (United Kingdom) 9,815 EUROPEAN PROVIDER OF MEZZANINE CAPITAL ---------------------------------------------------------------------------- 166,933 >MONEY MANAGEMENT: 0.8% 2,390,000 SEI Investments 69,406 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT 855,000 Eaton Vance 32,670 SPECIALTY MUTUAL FUNDS 200,000 The Investment Company of China (China) (d) 90 CLOSED-END FUND ---------------------------------------------------------------------------- 102,166 >BROKERAGE: 0.1% 1,215,000 Investment Technology Group (b) 15,540 ELECTRONIC TRADING ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 1,508,139 ---------------------------------------------------------------------------- HEALTH CARE: 9.1% >SERVICES: 3.2% 5,586,000 First Health (b)(c) 87,197 PPO NETWORK 2,491,000 Lincare Holdings (b) 81,854 HOME HEALTH CARE SERVICES 27 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SERVICES--CONTINUED 2,592,000 NDCHealth Group (c) $ 60,134 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 640,000 Charles River Laboratories (b) 31,277 PHARMACEUTICAL RESEARCH 3,070,000 Gambro (Sweden) 29,798 PRODUCTS/SERVICES FOR RENAL CARE 510,000 OPG Groep (Netherlands) 27,296 PHARMACEUTICAL WHOLESALER & RETAILER 1,333,000 Dendrite International (b) 24,767 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 450,000 Accredo Health (b) 17,527 SPECIALTY PHARMACY 296,000 Omega Pharma (Belgium) 15,019 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 550,000 Serologicals (b) 10,995 BLOOD COLLECTION & ANTIBODY PRODUCTION 440,000 Medquist (b) 5,038 MEDICAL TRANSCRIPTION SERVICES ---------------------------------------------------------------------------- 390,902 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.8% 1,629,000 Edwards Lifesciences (b) 56,771 HEART VALVES 1,239,000 Diagnostic Products 54,442 IMMUNODIAGNOSTIC KITS 2,910,000 Smith & Nephew (United Kingdom) 31,402 MEDICAL EQUIPMENT & SUPPLIES 1,900,000 CTI Molecular Imaging (b) 26,942 MEDICAL DIAGNOSTIC DEVICES 1,000,000 VISX (b) 26,720 LASER EYE SURGERY EQUIPMENT 583,000 Orthofix International (b) 24,912 BONE FIXATION & STIMULATION DEVICES 365,000 Essilor International (France) 23,845 EYEGLASS LENSES 200,000 Synthes-Stratec (Switzerland) 22,820 PRODUCTS FOR ORTHOPEDIC SURGERY 670,000 ICU Medical (b) 22,465 INTRAVENOUS THERAPY PRODUCTS 875,000 Viasys Healthcare (b) 18,296 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 1,000,000 Sola International (b) 17,230 SPECIALTY EYEGLASS LENSES 350,000 Haemonetics (b) 10,377 BLOOD & PLASMA COLLECTION EQUIPMENT 190,000 Hogy Medical (Japan) 9,549 DISPOSABLE SURGICAL PRODUCTS ---------------------------------------------------------------------------- 345,771 >BIOTECHNOLOGY/DRUG DELIVERY: 2.4% 519,000 Martek Biosciences (b) 29,152 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 775,000 Par Pharmaceuticals (b) 27,288 GENERICS 1,250,000 Ligand Pharmaceuticals (b) 21,725 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 1,055,000 Nektar Therapeutics (b) 21,058 DRUG DELIVERY TECHNOLOGIES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 360,000 Neurocrine Biosciences (b) $ 18,666 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 776,000 NPS Pharmaceuticals (b) 16,296 SMALL MOLECULE DRUGS 1,165,000 DOV Pharmaceutical (b)(c) 16,263 DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION 789,000 Atherogenics (b) 15,015 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 1,876,000 Lexicon Genetics (b) 14,708 DRUG DISCOVERY 2,000,000 Medarex (b) 14,580 HUMANIZED ANTIBODIES 1,708,000 Ciphergen Biosystems (b)(c) 12,503 PROTEIN CHIPS USED FOR DRUG TARGET DISCOVERY 1,709,000 Pozen (b)(c) 11,690 DRUGS FOR MIGRAINES 608,000 Protein Design Labs (b) 11,631 MONOCLONAL ANTIBODIES 1,700,000 Sangamo Biosciences (b)(c) 10,234 DRUG DISCOVERY 1,150,000 Bioveris (b) 9,568 IMMUNODIAGNOSTIC TECHNOLOGY 3,500,000 La Jolla Pharmaceutical (b)(c) 8,505 LUPUS TREATMENT 460,000 Myriad Genetics (b) 6,863 GENE DISCOVERY & DIAGNOSTIC PRODUCTS 635,000 Maxygen (b) 6,712 MOLECULAR BREEDING 638,000 Diversa (b) 6,463 MOLECULAR BREEDING 304,000 Alexion Pharmaceuticals (b) 5,654 MONOCLONAL ANTIBODIES 865,000 Arena Pharmaceuticals (b) 4,723 NOVEL DRUG TARGETING TECHNOLOGY 2,800,000 Sequenom (b)(c) 4,088 HIGH SPEED DNA ANALYSIS INSTRUMENTS 1,875 Locus Discovery, Series D, Pfd. (d) 3,750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 461,000 SYRRX, Series C (d) 2,305 X-RAY CRYSTALLOGRAPHY 1,249,999 Perlegen Sciences (d) 1,950 LARGE SCALE GENE SEQUENCING 359,944 Microdose (d) 180 DRUG INHALERS ---------------------------------------------------------------------------- 301,570 >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) 29,807 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 16,835 DISTRIBUTION OF MEDICAL SUPPLIES ---------------------------------------------------------------------------- 46,642 >HOSPITAL MANAGEMENT: 0.2% 500,000 Rhoen-Klinikum (Germany) 26,875 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- 1-800-922-6769 28 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >PHARMACEUTICALS: 0.1% 138,000 Yuhan (South Korea) $ 8,482 ETHICAL DRUG PRODUCER 2,000,000 United Drug (Ireland) 6,811 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER ---------------------------------------------------------------------------- 15,293 ----------- HEALTH CARE: TOTAL 1,127,053 ---------------------------------------------------------------------------- ENERGY/MINERALS: 9.1% >OIL/GAS PRODUCERS: 5.6% 7,275,000 XTO Energy 216,722 NATURAL GAS PRODUCER 2,800,000 Western Gas 90,944 OIL PRODUCER & COAL SEAM GAS PRODUCER 2,350,000 Ultra Petroleum (b) 87,726 NATURAL GAS PRODUCER 3,000,000 Talisman Energy (Canada) 65,227 OIL & GAS PRODUCER 1,300,000 Southwestern Energy (b) 37,271 NATURAL GAS PRODUCER 925,000 Nexen (Canada) 35,938 OIL & GAS PRODUCER 15,400,000 Tullow Oil (United Kingdom) 34,399 OIL & GAS PRODUCER 465,000 Quicksilver (b) 31,188 NATURAL GAS & COAL SEAM GAS PRODUCER 814,000 Denbury Resources (b) 17,053 OIL PRODUCER USING CO2 INJECTION 915,000 McMoRan Exploration (b)(c) 14,256 NATURAL GAS PRODUCERS & LNG DEVELOPER 582,000 Petrokazakhstan (Canada) (b) 15,842 OIL PRODUCER & REFINER IN KAZAKHSTAN 916,000 Range Resources 13,374 OIL & GAS PRODUCER 440,000 Clayton Williams Energy (b)(d) 9,675 40,000 Clayton Williams Energy (b) 956 OIL & GAS PRODUCER 3,458,200 Esprit Exploration (Canada) (b) 9,018 NATURAL GAS PRODUCER 2,265,000 Tipperary (b)(c) 8,086 COAL SEAM GAS PRODUCER ---------------------------------------------------------------------------- 687,675 >OIL SERVICES: 2.0% 2,300,000 FMC Technologies (b) 66,240 OIL & GAS WELL HEAD MANUFACTURER 730,000 Carbo Ceramics 49,822 NATURAL GAS WELL STIMULANTS 4,750,000 Newpark Resources (b)(c) 29,450 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 333,000 Fugro (Netherlands) 21,459 SURVEY & GPS SERVICES 700,000 Chicago Bridge & Iron 19,495 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 2,000,000 Key Energy Services (b) 18,880 OIL & GAS WELL WORKOVER SERVICES 2,000,000 Saipem (Italy) 18,226 OFFSHORE CONSTRUCTION & DRILLING 1,050,000 Enerflex Systems (Canada) 16,475 NATURAL GAS COMPRESSOR NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 800,000 Hanover Compressor (b) $ 9,520 NATURAL GAS COMPRESSOR RENTAL ---------------------------------------------------------------------------- 249,567 >DISTRIBUTION/MARKETING/REFINING: 1.2% 1,600,000 Equitable Resources 82,736 NATURAL GAS UTILITY & PRODUCER 1,900,000 Oneok 41,781 NATURAL GAS UTILITY, MARKETING & PROCESSING 761,000 Atmos Energy 19,482 NATURAL GAS UTILITY ---------------------------------------------------------------------------- 143,999 >INDEPENDENT POWER: 0.2% 1,470,000 Gamesa (Spain) 21,712 SPANISH WIND TURBINES 314,000 Millennium Cell (b) 584 FUEL CELL TECHNOLOGY ---------------------------------------------------------------------------- 22,296 >MINING: 0.1% 700,000 Noranda (Canada) 11,998 DIVERSIFIED NON-FERROUS METALS MINER ---------------------------------------------------------------------------- ----------- Energy/Minerals: Total 1,115,535 ---------------------------------------------------------------------------- OTHER INDUSTRIES: 3.6% >REAL ESTATE: 2.6% 825,000 The Rouse Company 39,188 REGIONAL SHOPPING MALLS 1,320,000 General Growth Properties 39,032 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 36,942 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 650,000 SL Green Realty 30,420 MANHATTAN OFFICE BUILDINGS 635,000 Macerich Company 30,397 REGIONAL SHOPPING MALLS 620,000 Mills 28,954 REGIONAL SHOPPING MALLS 575,000 Federal Realty Investment Trust 23,914 SHOPPING CENTERS 1,375,000 Crescent Real Estate Equities 22,165 CLASS A OFFICE BUILDINGS 650,000 United Dominion Realty 12,857 APARTMENTS 1,240,000 Highland Hospitality (b) 12,462 HOTEL REAL ESTATE INVESTMENT TRUST 1,352,600 Sponda (Finland) 11,490 OFFICE & WAREHOUSE PROPERTY COMPANY 1,000,000 Diamondrock Hospitality (b) 10,000 HOTEL REAL ESTATE INVESTMENT TRUST 190,000 Consolidated Tomoka 7,174 FLORIDA LAND OWNER 686,111 Am NV (Netherlands) 6,428 PROPERTY DEVELOPER 194,827 Security Capital European Realty (Luxembourg) (d) 3,112 SELF STORAGE PROPERTIES ---------------------------------------------------------------------------- 314,535 29 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >REGULATED UTILITIES: 0.4% 1,650,000 Northeast Utilities $ 32,125 REGULATED ELECTRIC UTILITY 799,800 Red Electrica (Spain) 13,618 SPANISH POWER GRID ---------------------------------------------------------------------------- 45,743 >TRANSPORTATION: 0.3% 140,000 Kobenhavns Lufthavne (Denmark) 20,416 COPENHAGEN AIRPORT AUTHORITY 620,000 Grupo Aeroportaurio Del Sureste (Mexico) 11,470 CANCUN & COZUMEL AIRPORT OPERATOR 15,000,000 Comfort Group (Singapore) 10,742 TAXI SERVICE ---------------------------------------------------------------------------- 42,628 >WASTE MANAGEMENT: 0.3% 1,275,000 Waste Connections (b) 37,817 SOLID WASTE MANAGEMENT ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES: TOTAL 440,723 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 94.3% 11,592,161 (COST: $7,214,239) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 5.6% Yield 1.04% - 1.30% Due 7/01/04 - 8/05/04 $ 77,000 General Electric Capital $ 76,939 76,000 Bayer 75,980 72,000 Citigroup 71,934 71,000 Bell South 70,942 70,000 Cargill 69,955 63,980 Campbell Soup 63,950 60,000 Household Finance 59,970 55,000 Coca Cola Enterprises 54,978 40,000 Virginia Electric & Power 39,993 40,000 Toyota Credit de Puerto Rico 39,951 30,000 Toyota Motors 29,978 30,000 John Hancock Finance 29,970 2,506 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation, Notes, Maturing 2/15/05, Market Value $2,560 (Repurchase proceeds: $2,506) 2,506 ---------------------------------------------------------------------------- (AMORTIZED COST: $687,046) 687,046 ----------- TOTAL INVESTMENTS (e): 99.9% 12,279,207 (COST: $7,901,285) (a) ----------- CASH AND OTHER ASSETS LESS LIABILITIES: 0.1% 10,343 ----------- TOTAL NET ASSETS: 100% $12,289,550 ============================================================================ 1-800-922-6769 30 -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $4,377,922 consisting of gross unrealized appreciation of $4,722,467 and gross unrealized depreciation of $344,545. (b) Non-income producing security. (c) An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting securities. On June 30, 2004, the Fund held five percent or more of the outstanding voting securities of the following companies: Christopher & Banks 10.26% AnswerThink Consulting 10.23% World Acceptance 9.84% Indus International 9.81% New Horizons Worldwide 9.81% Actuate 9.75% Gibraltar Steel 9.71% Analysts International 9.50% MAPICS 9.25% Seachange International 9.11% Skillsoft Publishing 9.02% Igate Capital 8.96% Glacier Bancorp 8.93% E.Piphany 8.82% West Coast Bancorp 8.79% BSQUARE 8.71% Monarch Casino & Resort 8.59% Nuco2 8.41% MRO Software 8.18% Esco Technologies 8.12% Clark/Bardes Consulting 8.06% Spartech 7.94% Cable Design Technologies 7.66% Concurrent Computer 7.58% JDA Software Group 7.57% First Years 7.20% NDCHealth Group 7.20% AFC Enterprises 7.13% Sequenom 7.06% Action Performance 6.96% Bally Total Fitness 6.90% Sangamo Biosciences 6.76% Watsco 6.66% Witness Systems 6.55% Navigant International 6.52% Gaiam 6.46% DOV Pharmaceutical 6.45% Princeton Review 6.38% Steve Madden 6.21% First Health 6.10% Coinstar 6.05% Pozen 5.93% Vital Stream, Cl. C 5.92% Hub Group 5.89% Ciphergen Biosystems 5.87% Orbitz 5.79% La Jolla Pharmaceutical 5.77% Tipperary 5.76% Mobile Mini 5.75% Radiant Systems 5.71% Newpark Resources 5.67% Clarcor 5.51% Pegasus Systems 5.44% Alliance Gaming 5.43% Pinnacle Entertainment 5.42% Saga Communications 5.38% McMoRan Exploration 5.31% Insight Communications 5.29% Kronos 5.23% Excel Technologies 5.19% Ciber 5.14% Micros Systems 5.13% American Woodmark 5.13% Anchor Bancorp Wisconsin 5.13% Monaco Coach 5.10% Avid Technology 5.06% Cuno 5.05% InfoUSA 5.03% The aggregate cost and value of these companies at June 30, 2004, was $1,459,400 and $2,055,516 respectively. Investments in affiliate companies represent 16.73% of total net assets at June 30, 2004. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2004 were as follows: Dividend Income $ 3,333 Net realized gain or loss $ 62,019 Change in unrealized gain or loss $ 4,005 Purchases $ 182,823 Proceeds from sales $ 214,679 In addition, additional purchases of existing portfolio holdings that were not considered affiliates in prior years, resulted in the Fund owning more than 5% of the outstanding shares of certain issues at June 30, 2004. Therefore, the cost and market value of the affiliate disclosure amounts include both acquisitions of new investments in affiliates during the period, as well as prior period investment holdings that became affiliates during the current period. 31 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities, except for CorpBanca, are valued in good faith by the Board of Trustees. At June 30, 2004, these securities amounted to $33,632, which represents 0.27% of total net assets. Additional information on these securities is as follows:
ACQUISITION SHARES/ SECURITY DATES PAR (000) COST (000) VALUE (000) -------- ----------------- -------- --------- ---------- CorpBanca 11/19/03 400 $ 10,290 $ 9,560 Clayton Williams Energy 05/25/04 440 10,120 9,675 Gadzooks 5.00% Convertible 10/07/08 10/08/03 $ 6,000 6,000 2,941 Locus Discovery, Series D, Pfd. 09/05/01 1,875 7,500 3,750 Microdose 11/24/00 360 2,005 180 NeoPlanet, Series A 02/12/99 250 2,000 51 NeoPlanet, Series B 02/17/00 53 641 18 Perlegen Sciences 03/30/01 1,250 4,500 1,950 Security Capital European Realty 08/20/98-11/12/99 195 3,897 3,112 SYRRX, Series C, Pfd. 01/08/01 461 2,997 2,305 The Investment Company of China 10/22/92-03/15/00 200 1,690 90 --------- ---------- $ 51,640 $ 33,632 ========= ==========
(e) On June 30, 2004, the market value of foreign securities represents 15.0% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT ------------ ----------- Canada $ 247,544 2.0% United Kingdom 216,072 1.8 Ireland 173,634 1.4 Japan 155,653 1.3 Switzerland 121,548 1.0 Netherlands 117,167 1.0 France 81,909 0.7 Singapore 55,635 0.5 Germany 53,952 0.4 Italy 53,367 0.4 Hong Kong 51,301 0.4 Sweden 49,821 0.4 Australia 45,338 0.4 Spain 44,070 0.4 Denmark 40,721 0.3 Norway 37,231 0.3 VALUE PERCENT ------------ ----------- China $ 36,404 0.3% Finland 35,444 0.3 South Korea 29,198 0.3 Austria 27,473 0.2 Argentina 24,563 0.2 Luxembourg 24,559 0.2 Mexico 20,104 0.1 India 19,131 0.1 Czech Republic 16,266 0.1 New Zealand 15,143 0.1 Belgium 15,019 0.1 Taiwan 10,517 0.1 Chile 9,560 0.1 Brazil 8,042 0.1 Greece 5,485 0.0 ------------ ----------- Total Foreign Portfolio $ 1,841,871 15.0% ============ =========== 1-800-922-6769 32 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Business Post 810,000 1,050,000 Exel 1,500,000 1,750,000 Jardine Lloyd Thompson 800,000 1,593,000 Jurys Doyle Hotel (Ireland) 740,000 810,000 Northgate 0 473,000 Rank Group 0 230,800 RPS Group 5,800,000 6,158,000 Tullow Oil 8,000,000 9,200,000 >NETHERLANDS Fugro 200,000 278,800 Koninklijke Ten Cate 0 157,947 >GERMANY/AUSTRIA Wienerberger (Austria) 420,000 472,500 Wincor Nixdorf 0 66,000 >FRANCE Camaieu 35,000 54,000 Metropole TV 200,000 300,000 >SPAIN Gamesa 380,000 850,000 Gestevision Telecinco 0 132,000 Prosegur 400,000 550,000 >SWEDEN Hexagon 293,000 368,000 >ITALY Amplifon 90,000 216,000 Credit Emiliano 0 210,000 >LUXEMBOURG SES Global 1,280,000 1,880,000 >CZECH REPUBLIC Komercni Banka 0 100,000 >POLAND Central European Distribution 159,900 207,450 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- ASIA >JAPAN Ain Pharmaciez 0 155,200 Bank of Fukuoka 0 1,500,000 Bank of Yokohama 0 1,400,000 Chiyoda Integre 150,000 234,900 Daito Trust Construction 346,300 480,100 Hogy Medical 186,000 226,000 Olympus Optical 0 325,000 Otsuke Kagu 0 326,900 Sugi Pharmacy 270,000 330,000 Wacoal 0 1,500,000 >HONG KONG/CHINA Global Bio-Chem Technology Group (China) 15,842,000 23,000,000 >TAIWAN ASE Test 1,130,000 1,230,000 Bank of Kaohsiung 5,320,000 7,700,000 Phoenixtec Power 8,539,000 11,540,000 Springsoft Systems 435,000 3,200,000 ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA Pacific Brands 0 5,000,000 >SOUTH AFRICA Edgars Consolidated Stores 0 252,000 ---------------------------------------------------------------------------- LATIN AMERICA >MEXICO URBI Desarrollo 0 690,000 >ARGENTINA Tenaris 400,000 440,000 >BRAZIL Natura Cosmetics 0 517,000 33 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED), CONTINUED NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Bunzl 1,400,000 1,000,000 Depfa Bank (Ireland) 1,200,000 1,000,000 (INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT) Euro Money Institutional Investor 1,200,000 0 Grafton Group (Ireland) 2,900,000 2,750,000 Hit Entertainment 3,000,000 0 Irish Life & Permanent (Ireland) 800,000 767,600 McCarthy & Stone 450,000 0 >NETHERLANDS IM Tech 545,000 400,000 Vopak 792,000 581,886 >FRANCE Essilor International 230,000 140,000 Euronext 300,000 0 Fininfo 476,000 404,000 Groupe Bourbon 40,000 0 Neopost 549,400 429,400 >SWITZERLAND BKW Energie 15,000 0 Givaudan 25,000 15,000 Kaba Holdings 30,000 0 >SPAIN Cortefiel 800,000 0 Red Electrica 600,000 420,000 >SWEDEN Intrum Justitia 2,980,000 2,630,000 Munters 80,000 0 >NORWAY Orkla 291,000 221,000 >DENMARK Kobenhavns Lufthavne 100,000 65,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ---------------------------------------------------------------------------- ASIA >JAPAN ARRK 360,000 280,000 Bellsystem 24 35,000 0 Fast Retailing 263,000 220,000 Nissin Healthcare 390,000 0 Park 24 370,000 210,000 Shimano 650,000 442,500 Taisei Lamick 100,000 0 USS 190,000 0 >HONG KONG Lianhua Supermarket 5,000,000 930,000 TVB 2,000,000 108,300 >INDIA Gas Authority of India 660,000 0 >THAILAND Airports of Thailand 1,357,800 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Corus Entertainment 825,000 500,000 Nexen 400,000 0 Noranda 500,000 400,000 Patheon 1,112,000 0 Power Financial 200,000 0 Shawcor 392,000 0 1-800-922-6769 34 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 96.8% ---------------------------------------------------------------------------- EUROPE: 57.0% >UNITED KINGDOM/IRELAND: 19.0% 2,350,000 Anglo Irish Bank (Ireland) $ 36,812 SMALL BUSINESS & MIDDLE MARKET BANKING 1,750,000 Exel 24,402 GLOBAL LOGISTICS & FREIGHT FORWARDING 1,100,000 Kerry (Ireland) 23,302 FOOD INGREDIENTS 2,750,000 Grafton Group (Ireland) 21,943 BUILDERS, WHOLESALERS & DIY RETAILING 9,200,000 Tullow Oil 20,550 OIL & GAS PRODUCER 1,450,000 Smith & Nephew 15,647 MEDICAL EQUIPMENT & SUPPLIES 600,000 Cobham 15,220 AEROSPACE 1,000,000 Depfa Bank (Ireland) 14,597 INTERNATIONAL PUBLIC SECTOR FINANCE 6,158,000 RPS Group 14,555 ENVIRONMENTAL CONSULTING 1,700,000 Burberry 12,630 APPAREL RETAILER 2,400,000 Expro International 11,981 OFFSHORE OIL FIELD SERVICES 1,593,000 Jardine Lloyd Thompson 11,876 BUSINESS INSURANCE BROKER 767,600 Irish Life & Permanent (Ireland) 11,831 SAVINGS PRODUCTS 1,200,000 Spectris 10,883 ELECTRONIC INSTRUMENTATION & CONTROLS 810,000 Jurys Doyle Hotel (Ireland) 10,264 HOTEL GROUP 750,000 Xstrata 10,049 DIVERSIFIED MINING HOLDING COMPANY 2,950,000 United Drug (Ireland) 10,046 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER 500,000 Intermediate Capital 9,815 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 1,050,000 Business Post 9,355 PARCEL & EXPRESS MAIL SERVICE 1,000,000 Bunzl 8,348 DISTRIBUTION OF DISPOSABLE PRODUCTS TO FOOD INDUSTRY 1,000,000 Kensington 7,995 NON-CONFORMING MORTGAGE COMPANY 473,000 Northgate 5,960 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 1,200,000 BBA Group 5,942 AVIATION SUPPORT SERVICES 200,000 Surfcontrol (b) 2,222 INTERNET FILTERING SOFTWARE 230,800 Rank Group 1,258 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 327,483 >NETHERLANDS: 7.4% 278,800 Fugro 17,966 SURVEY & GPS SERVICES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 327,000 OPG Groep $ 17,502 PHARMACEUTICAL WHOLESALER & RETAILER 353,000 Hunter Douglas 17,186 DECORATIVE WINDOW COVERINGS 569,390 Aalberts Industrie 17,050 FLOW CONTROL & HEAT TREATMENT 684,000 United Services Group 11,161 TEMPORARY STAFFING SERVICES 400,000 IM Tech 10,962 TECHNICAL ENGINEERING 339,928 Sligro Food Group 10,838 FOOD SERVICE & WHOLESALING 581,886 Vopak 9,594 OIL & CHEMICAL STORAGE 157,947 Koninklijke Ten Cate 8,638 ADVANCED TEXTILES & INDUSTRIAL FABRICS 686,111 Am NV 6,428 PROPERTY DEVELOPER ---------------------------------------------------------------------------- 127,325 >GERMANY/AUSTRIA: 6.9% 315,000 Rhoen-Klinikum Pfd. 17,310 300,000 Rhoen-Klinikum 16,125 HOSPITAL MANAGEMENT 472,500 Wienerberger (Austria) 16,484 BRICKS & CLAY ROOFING TILES 550,000 Hugo Boss Designs 12,467 FASHION APPAREL 300,000 Bilfinger Berger 10,381 CONSTRUCTION & RELATED SERVICES 300,000 Kali & Salz 10,179 POTASH PRODUCTS, FERTILIZERS, SALT & WASTE MANAGEMENT 250,000 GFK 8,734 MARKET RESEARCH SERVICES 1,000,000 Takkt 8,335 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 300,000 Zapf Creation 7,062 TOY MANUFACTURER 75,000 Beru 5,752 AUTO PARTS & ELECTRONICS 66,000 Wincor Nixdorf (b) 3,637 MANUFACTURES ATM MACHINES & RETAIL POS SYSTEMS 260,000 Deutsche Beteiligungs (b) 3,376 PRIVATE EQUITY INVESTMENT MANAGEMENT ---------------------------------------------------------------------------- 119,842 >FRANCE/BELGIUM: 6.3% 429,400 Neopost 25,411 POSTAGE METERS 244,000 Omega Pharma (Belgium) 12,380 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 150,000 Bacou Dalloz 11,136 SAFETY EQUIPMENT 404,000 Fininfo 11,095 DATA FEEDS FOR FRENCH BANKS & BROKERS 160,000 Imerys 9,328 INDUSTRIAL MINERALS PRODUCER 140,000 Essilor International 9,146 EYEGLASS LENSES 90,000 Vallourec 8,847 SEAMLESS TUBES 35 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FRANCE/BELGIUM--CONTINUED 90,000 Bonduelle $ 8,541 PRODUCER OF CANNED, FROZEN & FRESH VEGETABLES 300,000 Metropole TV 8,481 TELEVISION BROADCASTER 54,000 Camaieu 4,826 WOMEN'S APPAREL RETAILER ---------------------------------------------------------------------------- 109,191 >SWITZERLAND: 4.6% 25,000 Geberit International 16,666 PLUMBING SUPPLIES 130,000 Synthes-Stratec 14,833 PRODUCTS FOR ORTHOPEDIC SURGERY 24,000 Sika 13,213 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 40,000 Schindler 11,492 ELEVATOR MANUFACTURER & SERVICE PROVIDER 15,000 Givaudan 8,696 INDUSTRIAL FRAGRANCES & FLAVORS 3,000 Pargesa 8,079 INDUSTRIAL & MEDIA CONGLOMERATE 110,000 Bachem 6,286 PEPTIDES ---------------------------------------------------------------------------- 79,265 >SPAIN: 3.0% 2,000,000 Abengoa 17,762 ENGINEERING & CONSTRUCTION 850,000 Gamesa 12,554 WIND TURBINES 550,000 Prosegur 8,467 SECURITY GUARDS 420,000 Red Electrica 7,151 SPANISH POWER GRID 120,000 Bankinter 4,573 MORTGAGE LENDER 132,000 Gestevision Telecinco (b) 1,970 SPAIN'S SECOND LARGEST BROADCASTER ---------------------------------------------------------------------------- 52,477 >SWEDEN: 2.2% 2,630,000 Intrum Justitia (b) 15,394 RECEIVABLES MANAGEMENT & DEBT COLLECTION 368,000 Hexagon 12,371 DIVERSIFIED ENGINEERING 860,000 Nobia 10,130 KITCHEN INTERIORS MANUFACTURING & DISTRIBUTION ---------------------------------------------------------------------------- 37,895 >ITALY: 2.1% 1,130,000 Autogrill (b) 16,035 RESTAURANTS & CATERING FOR TRAVELERS 212,000 Davide Campari 10,464 BEVERAGES 216,000 Amplifon 7,694 HEARING AID RETAILER 210,000 Credit Emiliano 1,727 REGIONAL BANK ---------------------------------------------------------------------------- 35,920 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FINLAND: 1.7% 438,300 Jaakko Poyry $ 11,071 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 185,000 Amer Group 9,640 BRANDED SPORTING GOODS 950,000 Sponda 8,070 OFFICE & WAREHOUSE PROPERTY COMPANY ---------------------------------------------------------------------------- 28,781 >NORWAY: 1.0% 1,210,000 Den Norske Bank 8,253 LARGEST NORWEGIAN BANK 221,000 Orkla 5,527 DIVERSIFIED CONSUMER GOODS 220,000 Ekornes 4,312 NICHE FURNITURE MANUFACTURER ---------------------------------------------------------------------------- 18,092 >LUXEMBOURG: 0.9% 1,880,000 SES Global 15,893 SATELLITE BROADCASTING SERVICES ---------------------------------------------------------------------------- >CZECH REPUBLIC: 0.7% 100,000 Komercni Banka 11,218 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- >DENMARK: 0.5% 65,000 Kobenhavns Lufthavne 9,479 COPENHAGEN AIRPORT AUTHORITY ---------------------------------------------------------------------------- >GREECE: 0.4% 465,000 Intralot 7,393 LOTTERY & GAMING SYSTEMS & SERVICES ---------------------------------------------------------------------------- >POLAND: 0.3% 207,450 Central European Distribution (b) 5,375 SPIRITS & WINE DISTRIBUTION ---------------------------------------------------------------------------- ----------- EUROPE: TOTAL 985,629 ---------------------------------------------------------------------------- ASIA: 28.9% >JAPAN: 15.6% 480,100 Daito Trust Construction 18,461 APARTMENT BUILDER 220,000 Fast Retailing 17,876 APPAREL RETAILER 1,500,000 Wacoal 15,947 WOMEN'S SPECIALTY APPAREL 800,000 Ushio 14,474 INDUSTRIAL LIGHT SOURCES 358,000 Eneserve 14,268 POWER GENERATORS 1,181,000 Toyo Technica 13,942 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 201,000 Kappa Create 13,930 201,000 Kappa Create New Shares 13,484 SUSHI CHAIN RESTAURANT OPERATOR 330,000 Sugi Pharmacy 13,506 DRUGSTORES 1-800-922-6769 36 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >JAPAN--CONTINUED 5,200 Dentsu $ 13,440 ADVERTISING AGENCY 817,500 NIFCO 12,936 MOLDED PLASTIC COMPONENTS 280,000 ARRK 12,265 PROTOTYPES & MOLDS FOR NEW PRODUCT DEVELOPMENT 226,000 Hogy Medical 11,359 DISPOSABLE SURGICAL PRODUCTS 75,000 Funai Electric 11,323 CONSUMER ELECTRONICS 442,500 Shimano 10,529 BICYCLE COMPONENTS & FISHING TACKLE 326,900 Otsuke Kagu 10,206 FURNITURE RETAILER 1,500,000 Bank of Fukuoka 8,921 REGIONAL BANK 1,400,000 Bank of Yokohama 8,769 REGIONAL BANK 172,000 Uni-Charm 8,569 INFANT HYGIENE & FEMININE CARE PRODUCTS 210,000 Park 24 7,988 PARKING LOT OPERATOR 234,900 Chiyoda Integre 7,232 PLASTIC COMPONENTS FOR CONSUMER ELECTRONICS 325,000 Olympus Optical 6,158 MEDICAL EQUIPMENT & CAMERAS 155,200 Ain Pharmaciez 2,716 DISPENSING PHARMACY/DRUGSTORE OPERATOR 112,000 Hiroshima Bank 599 REGIONAL BANK ---------------------------------------------------------------------------- 268,898 >HONG KONG/CHINA: 5.1% 23,000,000 Global Bio-Chem Technology Group (China) 16,705 1,875,000 Global Bio-Chem Technology Group Warrant (China) (b) 123 CHINESE REFINER OF CORN-BASED COMMODITIES 6,000,000 Techtronic Industries 9,587 POWER TOOLS 2,000,000 Esprit Holdings 8,992 GLOBAL APPAREL BRAND MANAGER 4,000,000 Hong Kong Exchanges & Clearing 8,246 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 9,815,000 Hainan Meilan Airport (China) 7,507 CHINESE AIRPORT OPERATOR 20,000,000 Sinotrans (China) 7,203 INTEGRATED LOGISTICS IN CHINA 17,674,000 Linmark 6,531 SOURCING OF CONSUMER GOODS 12,000,000 Jiangsu Expressway (China) 5,767 TOLL ROAD BUILDER & OPERATOR 8,000,000 Zhejiang Expressway (China) 5,720 TOLL ROAD BUILDER & OPERATOR 14,500,000 Ngai Lik Industrial 5,562 CHINA BASED ELECTRONICS CONTRACT MANUFACTURER 27,969,225 Lerado Group 4,958 BABY PARAPHERNALIA NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 930,000 Lianhua Supermarket $ 941 Chinese Supermarket Chain 108,300 TVB 467 TELEVISION PROGRAMMING & BROADCASTING ---------------------------------------------------------------------------- 88,309 >TAIWAN: 2.5% 11,540,000 Phoenixtec Power 11,367 UNINTERRUPTIBLE POWER SUPPLIES 1,230,000 ASE Test (b) 9,065 SEMICONDUCTOR PACKAGING & TEST SERVICES 3,200,000 Springsoft Systems 7,343 ELECTRONIC DESIGN AUTOMATION SOFTWARE 5,000,000 Wah Lee Industrial 6,671 DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT 7,700,000 Bank of Kaohsiung 5,473 COMMERCIAL BANKING 3,010,000 Taiwan Fu Hsing 2,783 DOOR LOCK MANUFACTURER ---------------------------------------------------------------------------- 42,702 >SINGAPORE: 2.3% 1,920,000 Venture 20,184 ELECTRONIC CONTRACT MANUFACTURER 15,000,000 Comfort Group 10,742 TAXI SERVICE 9,000,000 Sembcorp Logistics 9,637 LOGISTIC SERVICES FOR MARINE TRANSPORT ---------------------------------------------------------------------------- 40,563 >SOUTH KOREA: 2.0% 355,000 Hyundai Mobis 15,815 AUTO PARTS 165,000 Yuhan 10,142 ETHICAL DRUG PRODUCER 100,000 Samsung Fire & Marine 6,410 NON-LIFE INSURANCE 252,100 Samyoung Heat Exchange (b) 2,253 POWER PLANT RELATED MACHINERY ---------------------------------------------------------------------------- 34,620 >INDIA: 1.0% 1,500,000 Housing Development Finance 16,880 PREMIER MORTGAGE LENDER IN INDIA ---------------------------------------------------------------------------- >INDONESIA: 0.3% 40,000,000 PT Perusahaan Gas Negara 6,185 GAS PIPELINE OPERATOR ---------------------------------------------------------------------------- >THAILAND: 0.1% 4,000,000 Thai Union Frozen Products 2,005 CANNED TUNA FISH ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 500,162 ---------------------------------------------------------------------------- OTHER COUNTRIES: 7.8% >CANADA: 3.9% 995,000 Talisman Energy 21,634 OIL & GAS PRODUCER 5,000,000 Esprit Exploration (b) 13,038 NATURAL GAS PRODUCER 37 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CANADA--CONTINUED 500,000 Corus Entertainment $ 9,694 TELEVISION PROGRAMMING & RADIO STATIONS 340,000 Masonite International (b) 8,769 DOOR MANUFACTURER 450,000 Intrawest 7,178 OWNER/OPERATOR OF SKI RESORTS 400,000 Noranda 6,856 DIVERSIFIED NON-FERROUS METALS MINER ---------------------------------------------------------------------------- 67,169 >AUSTRALIA/NEW ZEALAND: 3.6% 3,000,000 Billabong International 17,219 SURFWEAR APPAREL MANUFACTURER 4,000,000 Sky City Entertainment (New Zealand) 12,114 CASINO/ENTERTAINMENT COMPLEX 2,500,000 Lion Nathan 11,778 AUSTRALIAN BEER BREWER/DISTRIBUTOR 350,000 Perpetual Trustees 11,429 AUSTRALIAN MUTUAL FUND MANAGER 5,000,000 Pacific Brands (b) 9,274 DOMINANT AUSTRALIAN APPAREL BRAND MANAGER ---------------------------------------------------------------------------- 61,814 >SOUTH AFRICA: 0.3% 252,000 Edgars Consolidated Stores 5,986 LEADING RETAIL CONGLOMERATE ---------------------------------------------------------------------------- ----------- OTHER: TOTAL 134,969 ---------------------------------------------------------------------------- LATIN AMERICA: 3.1% >MEXICO: 1.4% 660,000 Grupo Aeroportuario 12,210 MEXICAN AIRPORT AUTHORITY 3,000,000 Consorcio (b) 8,634 LOW/MEDIUM INCOME HOUSE BUILDER 690,000 URBI Desarrollo (b) 2,228 AFFORDABLE HOUSING BUILDER ---------------------------------------------------------------------------- 23,072 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- >ARGENTINA: 0.8% 440,000 Tenaris $ 14,410 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- >BRAZIL: 0.5% 517,000 Natura Cosmetics (b) 8,315 DIRECT SALES OF HIGH-END COSMETICS ---------------------------------------------------------------------------- >CHILE: 0.4% 300,000 CorpBanca (c) 7,170 CHILE'S 3RD LARGEST LOCAL BANK ---------------------------------------------------------------------------- ----------- LATIN AMERICA: TOTAL 52,967 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 96.8% 1,673,727 (COST: $1,193,325) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.2% Yield 1.17% - 1.22% Due 7/6/04 - 7/7/04 $ 30,000 SBC International 29,995 25,000 American General Finance 24,995 ---------------------------------------------------------------------------- (AMORTIZED COST: $54,990) 54,990 ----------- TOTAL INVESTMENTS (d): 100.0% 1,728,717 (COST: $1,248,315) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (531) ----------- TOTAL NET ASSETS: 100% $ 1,728,186 ============================================================================ -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purpose cost of investments was $1,249,530 and net unrealized appreciation was $479,187 consisting of gross unrealized appreciation of $512,988 and gross unrealized depreciation of $33,801. (b) Non-income producing security. (c) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. This security amounted to $7,170, which represents 0.40% of total net assets. Additional information on this security is as follows: ACQUISITION SECURITY DATE SHARES (000) COST (000) VALUE (000) -------------- ----------- ----------- --------- ---------- CorpBanca 11/19/03 300 $ 7,564 $ 7,170 (d) On June 30, 2004, the Fund's total investments were denominated in currencies as follows: CURRENCY VALUE % OF NET ASSETS -------- ---------- ---------------- Euro $ 625,619 36.2% Japanese Yen 268,898 15.6 British Pounds 198,688 11.5 US Dollar 103,220 5.9 Hong Kong Dollar 88,309 5.1 Other currencies less than 5% of total net assets 443,983 25.7 ---------- ---------------- $1,728,717 100.0% ========== ================ 1-800-922-6769 38 COLUMBIA ACORN INTERNATIONAL >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2004, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 103,277 5.8% Industrial Materials 81,897 4.7 Outsourcing and Training Services 61,139 3.5 Conglomerates 55,262 3.2 Electrical Components 49,480 2.9 Construction 37,728 2.2 Machinery 27,664 1.6 Steel 23,257 1.3 Industrial Distribution 21,943 1.3 Specialty Chemicals 21,909 1.3 ---------------------------------------------------------------------------- 480,556 27.8 >CONSUMER GOODS/SERVICES Retail 85,373 4.9 Apparels 61,438 3.6 Food 50,213 2.9 Restaurants 43,449 2.5 Furniture and Textiles 40,397 2.3 Durables Goods 25,868 1.5 Beverage 22,242 1.3 Leisure Products 17,955 1.0 Travel 17,442 1.0 Casinos 13,372 0.8 Other Consumer Services 12,946 0.8 Consumer Electronics 11,323 0.7 Nondurables 8,569 0.5 Gaming 7,393 0.4 Other Entertainment 7,062 0.4 Consumer Goods Distribution 5,375 0.3 ---------------------------------------------------------------------------- 430,417 24.9 >FINANCE Banks 103,539 6.0 Other Finance Companies 39,164 2.3 Insurance 30,117 1.7 Savings and Loans 21,453 1.2 Money Management 14,805 0.9 ---------------------------------------------------------------------------- 209,078 12.1 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Business Information and Marketing Services $ 34,384 2.0% Contract Manufacturing 25,746 1.5 Instrumentation 24,825 1.4 Satellite Broadcasting Services 15,893 0.9 Computer Hardware and Related Equipment 15,004 0.9 Advertising 13,440 0.8 Television Broadcasting 10,918 0.6 Television Programming 9,694 0.6 Business Software 9,565 0.5 Semiconductors and Related Equipment 9,065 0.5 Financial Processors 8,246 0.5 Electronics Distribution 6,671 0.4 ---------------------------------------------------------------------------- 183,451 10.6 >HEALTH CARE Medical Equipment 45,784 2.6 Hospital Management 33,435 1.9 Services 29,882 1.7 Pharmaceuticals 20,188 1.2 Hospital/ Laboratory Supplies 11,359 0.7 Biotechnology/ Drug Delivery 6,286 0.4 ---------------------------------------------------------------------------- 146,934 8.5 >ENERGY/MINERALS Oil/Gas Producers 55,222 3.2 Oil Services 29,947 1.7 Agricultural Commodities 16,828 1.0 Independent Power 14,268 0.8 Non-Ferrous Metals 10,049 0.6 Mining 6,856 0.4 Refining/Marketing/Distribution 6,185 0.4 ---------------------------------------------------------------------------- 139,355 8.1 >OTHER INDUSTRIES Transportation 51,425 3.0 Real Estate 25,360 1.4 Regulated Utilities 7,151 0.4 ---------------------------------------------------------------------------- 83,936 4.8 TOTAL COMMON STOCKS AND ---------------------------- OTHER EQUITY-LIKE SECURITIES 1,673,727 96.8 SHORT-TERM OBLIGATIONS 54,990 3.2 ---------------------------- TOTAL INVESTMENTS 1,728,717 100.0 CASH AND OTHER ASSETS LESS LIABILITIES (531) 0.0 ---------------------------- NET ASSETS $ 1,728,186 100.0% ============================================================================ 39 COLUMBIA ACORN USA >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION Entravision Communications 0 510,000 Unova 180,000 260,000 ValueClick 140,000 285,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 290,500 435,750 Ann Taylor 75,000 187,500 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Brookstone 12,750 129,900 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) HNI 0 40,000 ITT Educational Services 376,000 396,000 NBTY 0 37,000 Sports Authority 0 70,000 Weight Watchers 0 60,000 ---------------------------------------------------------------------------- HEALTH CARE Atherogenics 0 260,000 Diagnostic Products 66,300 141,300 Lexicon Genetics 0 281,200 Ligand Pharmaceuticals 0 415,000 Par Pharmaceuticals 0 192,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Chicago Bridge & Iron 0 160,000 Clayton Williams Energy 0 95,000 Oneok 95,000 245,000 Range Resources 0 73,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Genlyte Group 0 17,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- INFORMATION DoubleClick 925,600 460,600 Kronos 331,650 296,650 Micros Systems 347,600 287,600 Telephone & Data Systems 40,000 10,000 Zebra Technologies 186,000 166,000 ---------------------------------------------------------------------------- HEALTH CARE Applera Celera Genomics 245,000 0 Enzon 311,500 0 Nektar Therapeutics 720,000 360,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Insurance Auto Auctions 206,900 41,900 1-800-922-6769 40 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 92.0% ---------------------------------------------------------------------------- INFORMATION: 33.9% >BUSINESS/CONSUMER SOFTWARE: 9.9% 287,600 Micros Systems (b) $ 13,796 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 974,000 JDA Software (b) 12,828 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 296,650 Kronos (b) 12,222 LABOR MANAGEMENT SOLUTIONS 1,330,000 Novell (b) 11,159 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 473,500 MRO Software (b) 6,444 ENTERPRISE MAINTENANCE SOFTWARE 304,991 PeopleSoft (b) 5,642 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 206,000 Group 1 Software (b) 4,728 ADDRESS VERIFICATION SOFTWARE 653,200 E.Piphany (b) 3,155 CRM SOFTWARE 140,000 SPSS (b) 2,516 STATISTICAL ANALYSIS SOFTWARE 64,000 THQ (b) 1,466 ENTERTAINMENT SOFTWARE 100,000 Aspect Communications (b) 1,420 CALL CENTER SOFTWARE 65,000 MAPICS (b) 686 MID MARKET ERP SOFTWARE ---------------------------------------------------------------------------- 76,062 >COMPUTER HARDWARE/SEMICONDUCTORS/ RELATED EQUIPMENT: 6.1% 166,000 Zebra Technologies (b) 14,442 BAR CODE PRINTERS 365,300 Integrated Circuit Systems (b) 9,922 SILICON TIMING DEVICES 424,100 Seachange International (b) 7,159 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 260,000 Unova (b) 5,265 BARCODE & WIRELESS LAN SYSTEMS 70,000 Littelfuse (b) 2,969 LITTLE FUSES 40,000 Rogers (b) 2,796 PCB LAMINATES & HIGH PERFORMANCE FOAMS 200,000 Cable Design Technologies (b) 2,120 NETWORKING & SPECIALTY CABLES 50,000 Avocent (b) 1,837 COMPUTER CONTROL SWITCHES ---------------------------------------------------------------------------- 46,510 >MOBILE COMMUNICATIONS: 5.5% 927,000 Western Wireless (b) 26,800 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 14,824 COMMUNICATION TOWERS IN USA & UK 10,000 Telephone & Data Systems 712 CELLULAR & TELEPHONE SERVICES ---------------------------------------------------------------------------- 42,336 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TELECOMMUNICATIONS/WIRELINE COMMUNICATIONS: 3.2% 333,800 Commonwealth Telephone (b) $ 14,944 RURAL PHONE FRANCHISES & CLEC 480,000 Andrew (b) 9,605 WIRELESS INFRASTRUCTURE EQUIPMENT ---------------------------------------------------------------------------- 24,549 >BROADCASTING: 2.7% 315,800 Salem Communications (b) 8,568 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 695,000 Spanish Broadcasting (b) 6,470 SPANISH LANGUAGE RADIO STATIONS 510,000 Entravision Communications (b) 3,917 SPANISH LANGUAGE TV, RADIO & OUTDOOR 138,500 Gray Television 1,924 MID MARKET AFFILIATED TV STATIONS ---------------------------------------------------------------------------- 20,879 >TRANSACTION PROCESSORS: 1.7% 211,640 Global Payments 9,528 CREDIT CARD PROCESSOR 143,100 Pegasus Systems (b) 1,878 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 80,000 Euronet Worldwide (b) 1,850 ATM PROCESSOR ---------------------------------------------------------------------------- 13,256 >COMPUTER SERVICES: 1.5% 1,005,500 AnswerThink Consulting (b) 5,761 IT INTEGRATOR FOR FORTUNE 2000 786,000 RCM Technologies (b)(c) 4,990 TECHNOLOGY ENGINEERING SERVICES 200,000 Igate Capital (b) 796 TECHNOLOGY STAFFING SERVICES ---------------------------------------------------------------------------- 11,547 >INTERNET: 0.9% 460,600 DoubleClick (b) 3,579 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 285,000 ValueClick (b) 3,414 INTERNET ADVERTISING ---------------------------------------------------------------------------- 6,993 >BUSINESS INFORMATION/MARKETING SERVICES/PUBLISHING: 0.8% 102,800 Getty Images (b) 6,168 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA ---------------------------------------------------------------------------- >TELEVISION PROGRAMMING: 0.6% 600,000 Mediacom Communications (b) 4,692 CABLE TELEVISION FRANCHISES ---------------------------------------------------------------------------- >TELECOMMUNICATION EQUIPMENT: 0.4% 300,000 Symmetricom (b) 2,670 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- >INSTRUMENTATION: 0.3% 90,000 Trimble Navigation (b) 2,501 GPS-BASED INSTRUMENTS ---------------------------------------------------------------------------- 41 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >Contract Manufacturing: 0.3% 140,000 Plexus (b) $ 1,890 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 260,053 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 15.4% >RETAIL: 7.0% 435,750 Aeropostale (b) 11,726 MALL BASED TEEN RETAILER 116,600 Urban Outfitters (b) 7,102 MULTI CHANNEL LIFESTYLE RETAILER 343,750 Christopher & Banks 6,088 WOMEN'S APPAREL RETAILER 187,500 Ann Taylor (b) 5,434 WOMEN'S APPAREL RETAILER 710,000 Winn Dixie Stores 5,112 SUPERMARKETS IN THE SOUTHEAST US 130,000 Abercrombie & Fitch 5,037 TEEN APPAREL RETAILER 95,000 Petco Animal Supplies (b) 3,060 PET SUPPLIES & SERVICES 50,000 Michaels Stores 2,750 CRAFT & HOBBY SPECIALTY RETAILER 129,900 Brookstone (b) 2,604 SPECIALTY CONSUMER PRODUCT RETAILER 70,000 Sports Authority (b) 2,513 SPORTING GOODS STORES 95,000 Genesco (b) 2,245 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER ---------------------------------------------------------------------------- 53,671 >CONSUMER SERVICES: 4.0% 396,000 ITT Educational Services (b) 15,056 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 9,557 OWNER/OPERATOR OF COIN COUNTING MACHINES 181,700 Central Parking 3,396 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 60,000 Weight Watchers 2,348 WEIGHT LOSS PROGRAMS ---------------------------------------------------------------------------- 30,357 >NONDURABLES: 1.4% 167,200 Scotts Company (b) 10,681 CONSUMER LAWN & GARDEN PRODUCTS ---------------------------------------------------------------------------- >APPAREL: 1.2% 197,600 Steven Madden (b) 3,946 WHOLESALER/RETAILER OF FASHION FOOTWEAR 64,000 Coach (b) 2,892 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 59,200 Oxford Industries 2,579 BRANDED & PRIVATE LABEL APPAREL ---------------------------------------------------------------------------- 9,417 >FURNITURE: 1.0% 85,000 Herman Miller 2,460 OFFICE FURNITURE NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 30,000 American Woodmark $ 1,795 KITCHEN CABINETS 40,000 HNI 1,693 OFFICE FURNITURE & FIREPLACES 20,000 Mohawk Industries (b) 1,467 CARPET & FLOORING ---------------------------------------------------------------------------- 7,415 >ENTERTAINMENT/LEISURE PRODUCTS: 0.7% 91,300 International Speedway Motors 4,441 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 50,000 Leapfrog Enterprises (b) 994 EDUCATIONAL TOYS ---------------------------------------------------------------------------- 5,435 >FOOD & BEVERAGES: 0.1% 37,000 NBTY (b) 1,087 VITAMINS & SUPPLEMENTS ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 118,063 ---------------------------------------------------------------------------- HEALTH CARE: 15.1% >MEDICAL EQUIPMENT: 6.5% 573,000 Edwards Lifesciences (b) 19,970 HEART VALVES 415,000 Ligand Pharmaceuticals (b) 7,213 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 141,300 Diagnostic Products 6,209 IMMUNODIAGNOSTIC KITS 220,000 Viasys Healthcare (b) 4,600 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 170,600 VISX (b) 4,558 LASER EYE SURGERY 111,700 ICU Medical (b) 3,745 INTRAVENOUS THERAPY PRODUCTS 245,000 CTI Molecular Imaging (b) 3,474 MEDICAL DIAGNOSTIC DEVICES ---------------------------------------------------------------------------- 49,769 >SERVICES: 4.3% 744,000 First Health (b) 11,614 PPO NETWORK 423,800 NDCHealth Group 9,832 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 246,800 Lincare Holdings (b) 8,110 HOME HEALTH CARE SERVICES 40,000 Charles River Laboratories (b) 1,955 PHARMACEUTICAL RESEARCH 100,000 Dendrite International (b) 1,858 SOFTWARE FOR PHARMACEUTICAL SALES FORCE ---------------------------------------------------------------------------- 33,369 >BIOTECHNOLOGY/DRUG DELIVERY: 3.0% 360,000 Nektar Therapeutics (b) 7,186 DRUG DELIVERY TECHNOLOGIES 192,000 Par Pharmaceuticals (b) 6,760 GENERICS 260,000 Atherogenics (b) 4,948 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 1-800-922-6769 42 NUMBER OF SHARES VALUE (000) -------------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 281,200 Lexicon Genetics (b) $ 2,205 DRUG DISCOVERY 154,000 SYRRX, Series C (b)(d) 770 X-RAY CRYSTALLOGRAPHY 375,000 Locus Discovery, Series D, Pfd. (b)(d) 750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 75,000 Bioveris (b) 624 IMMUNODIAGNOSTIC TECHNOLOGY 363,636 Metabolex, Series F (b)(d) 53 DRUGS FOR DIABETES ---------------------------------------------------------------------------- 23,296 >MEDICAL SUPPLIES: 1.3% 222,800 Techne (b) 9,681 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ---------------------------------------------------------------------------- ----------- Health Care: Total 116,115 ---------------------------------------------------------------------------- ENERGY/MINERALS: 10.3% >OIL & GAS PRODUCERS: 4.6% 305,000 Quicksilver (b) 20,456 NATURAL GAS & COAL SEAM GAS PRODUCER 272,000 Western Gas 8,835 OIL & COAL SEAM GAS PRODUCER 82,100 Southwestern Energy (b) 2,354 NATURAL GAS PRODUCER 95,000 Clayton Williams Energy (b) 2,270 OIL & GAS PRODUCER 73,000 Range Resources 1,066 OIL & GAS PRODUCER 43,300 McMoRan Exploration (b) 675 NATURAL GAS PRODUCERS & LNG DEVELOPER ---------------------------------------------------------------------------- 35,656 >OIL SERVICES: 3.6% 401,700 FMC Technologies (b) 11,569 OIL & GAS WELL HEAD MANUFACTURER 941,000 Newpark Resources (b) 5,834 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 160,000 Chicago Bridge & Iron 4,456 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 61,000 Carbo Ceramics 4,163 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,274 OIL & GAS WELL WORKOVER SERVICES ---------------------------------------------------------------------------- 27,296 >DISTRIBUTION/MARKETING/REFINING: 2.1% 115,600 Equitable Resources 5,978 NATURAL GAS UTILITY & PRODUCER 245,000 Oneok 5,388 NATURAL GAS UTILITY, MARKETING & PROCESSING 193,000 Atmos Energy 4,941 NATURAL GAS UTILITY ---------------------------------------------------------------------------- 16,307 ----------- Energy/Minerals: Total 79,259 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- FINANCE: 9.8% >FINANCE COMPANIES: 4.0% 1,091,500 AmeriCredit (b) $ 21,317 AUTO LENDING 520,200 World Acceptance (b) 9,535 PERSONAL LOANS ---------------------------------------------------------------------------- 30,852 >INSURANCE: 2.9% 430,000 HCC Insurance Holdings 14,367 AVIATION INSURANCE 16,500 Markel (b) 4,579 SPECIALTY INSURANCE 35,000 Philadelphia Consolidated Holding (b) 2,102 SPECIALTY INSURANCE 91,000 United National Group (b) 1,375 SPECIALTY INSURANCE ---------------------------------------------------------------------------- 22,423 >BANKS: 1.7% 131,500 TCF Financial 7,634 GREAT LAKES BANK 158,125 Chittenden 5,558 VERMONT & WEST MASSACHUSETTS BANK ---------------------------------------------------------------------------- 13,192 >SAVINGS & LOAN: 1.2% 110,000 Downey Financial 5,857 CALIFORNIA HOME LENDER 116,400 Anchor Bancorp Wisconsin 3,078 WISCONSIN THRIFT ---------------------------------------------------------------------------- 8,935 ----------- FINANCE: TOTAL 75,402 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 6.7% >MACHINERY: 3.3% 282,000 Esco Technologies (b) 15,047 FILTRATION & TEST EQUIPMENT 194,000 Pentair 6,526 PUMPS, WATER TREATMENT & TOOLS 110,000 Ametek 3,399 AEROSPACE/INDUSTRIAL INSTRUMENTS ---------------------------------------------------------------------------- 24,972 >LOGISTICS: 1.3% 286,000 Hub Group (b) 9,753 TRUCK & RAIL FREIGHT FORWARDER ---------------------------------------------------------------------------- >WATER: 0.9% 134,000 Cuno (b) 7,149 FILTRATION & FLUIDS CLARIFICATION ---------------------------------------------------------------------------- >INDUSTRIAL SERVICES: 0.3% 95,000 Clark/Bardes Consulting (b) 1,762 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 41,900 Insurance Auto Auctions (b) 712 AUTO SALVAGE SERVICES ---------------------------------------------------------------------------- 2,474 43 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.3% 95,000 Spartech $ 2,464 PLASTICS DISTRIBUTION & COMPOUNDING ---------------------------------------------------------------------------- >INDUSTRIAL DISTRIBUTION: 0.3% 100,000 Nuco2 (b) 1,970 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS ---------------------------------------------------------------------------- >CONSTRUCTION: 0.2% 45,000 Florida Rock Industries 1,898 CONCRETE & AGGREGATES ---------------------------------------------------------------------------- >INDUSTRIAL GOODS: 0.1% 17,000 Genlyte Group (b) 1,069 COMMERCIAL LIGHTING FIXTURES ---------------------------------------------------------------------------- ----------- Industrial Goods/Services: Total 51,749 ---------------------------------------------------------------------------- OTHER INDUSTRIES: 0.8% >REAL ESTATE: 0.6% 47,000 The Rouse Company 2,232 REGIONAL SHOPPING MALLS 100,000 Crescent Real Estate Equities 1,612 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality (b) 352 HOTEL REAL ESTATE INVESTMENT TRUST ---------------------------------------------------------------------------- 4,196 >REGULATED UTILITIES: 0.2% 90,000 Northeast Utilities 1,752 REGULATED ELECTRIC UTILITY ---------------------------------------------------------------------------- ----------- Other Industries: Total 5,948 ----------- Total Common Stocks: 92.0% 706,589 (Cost: $486,876) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 8.0% Yield 1.12% - 1.17% Due 7/6/04 - 7/7/04 $ 20,000 SBC International $ 19,997 20,000 Prudential Funding 19,996 21,514 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $21,945 (Repurchase proceeds: $21,515) 21,514 ---------------------------------------------------------------------------- (AMORTIZED COST: $61,507) 61,507 ----------- TOTAL INVESTMENTS: 100.0% 768,096 (COST: $548,383) (a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (180) ----------- TOTAL NET ASSETS: 100% $ 767,916 ============================================================================ 1-800-922-6769 44 -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $219,713 consisting of gross unrealized appreciation of $242,584 and gross unrealized depreciation of $22,871. (b) Non-income producing security. (c) An affiliate may include any company in which the Fund owns five percent or more of its outstanding voting securities. On June 30, 2004, the Fund held five percent or more of the outstanding voting securities of the following company: RCM Technologies 6.95% The aggregate cost and value of this company at June 30, 2004, was $5,636 and $4,990 respectively. Investments in affiliate companies represent 0.65% of total net assets at June 30, 2004. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2004 were as follows: Dividend Income $ -- Net realized gain or loss $ (3,800) Change in unrealized gain or loss $ (2,712) Purchases $ -- Proceeds from sales $ 562 (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. These securities are valued in good faith by the Board of Trustees. At June 30, 2004, these securities amounted to $1,573, which represents 0.20% of total net assets. Additional information on these securities is as follows:
ACQUISITION SECURITY DATES SHARES (000) COST (000) VALUE (000) -------- ----------- ----------- --------- ---------- SYRRX, Series C 01/08/01 154 $1,101 $770 Locus Discovery, Series D, Pfd. 09/05/01 375 1,500 750 Metabolex, Series F 05/11/00 364 2,000 53 --------- ---------- $4,601 $1,573 ========= ==========
45 COLUMBIA ACORN INTERNATIONAL SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM British Sky Broadcasting 35,000 70,000 Exel 80,000 135,000 >CZECH REPUBLIC Komercni Banka 0 12,000 ---------------------------------------------------------------------------- ASIA >JAPAN Daito Trust Construction 26,100 38,000 Olympus Optical 0 23,000 Sugi Pharmacy 23,000 32,300 Uni-Charm 20,500 25,100 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Kinross Gold 0 80,000 ---------------------------------------------------------------------------- LATIN AMERICA >ARGENTINA Tenaris 19,200 39,200 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 Sales ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM BG Group 350,000 270,000 >FRANCE Essilor International 18,000 12,000 Neopost 33,600 25,100 >SWEDEN Gambro 58,000 0 ---------------------------------------------------------------------------- ASIA >JAPAN Fast Retailing 19,500 11,500 Nidec 12,900 0 USS 11,700 0 >HONG KONG/CHINA Esprit Holdings 200,000 0 Sinotrans (China) 2,000,000 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Power Financial 20,000 0 Talisman Energy 72,000 52,000 (includes the effect of a 3 for 1 stock split) 1-800-922-6769 46 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 96.8% ---------------------------------------------------------------------------- EUROPE: 56.3% >UNITED KINGDOM/IRELAND: 29.7% 161,486 Anglo Irish Bank (Ireland) $ 2,530 SMALL BUSINESS & MIDDLE MARKET BANKING 135,000 Exel 1,882 GLOBAL LOGISTICS & FREIGHT FORWARDING 270,000 BG Group 1,667 OIL & GAS PRODUCER 88,000 Depfa Bank (Ireland) 1,285 INTERNATIONAL PUBLIC SECTOR FINANCE 40,000 Cobham 1,015 AEROSPACE 120,000 Grafton Group (Ireland) 957 BUILDERS, WHOLESALERS & DIY RETAILING 70,000 British Sky Broadcasting (b) 792 DIGITAL SATELLITE BROADCASTING 100,000 Jardine Lloyd Thompson 745 BUSINESS INSURANCE BROKER 120,000 Compass Group 735 INTERNATIONAL CONCESSION & CONTRACT CATERER 75,000 Burberry 557 APPAREL RETAILER 25,000 Kerry (Ireland) 530 FOOD INGREDIENTS 46,000 Smith & Nephew 496 MEDICAL EQUIPMENT & SUPPLIES 15,400 Rank Group 84 GAMING & MEDIA SERVICES ---------------------------------------------------------------------------- 13,275 >SWITZERLAND: 7.2% 4,000 Schindler 1,149 ELEVATOR MANUFACTURER & SERVICE PROVIDER 7,000 Swatch Group 913 WATCH & ELECTRONICS MANUFACTURER 1,000 Givaudan 580 INDUSTRIAL FRAGRANCES & FLAVORS 5,000 Synthes-Stratec 570 PRODUCTS FOR ORTHOPEDIC SURGERY ---------------------------------------------------------------------------- 3,212 >FRANCE: 6.1% 25,100 Neopost 1,485 POSTAGE METERS 12,000 Essilor International 784 EYEGLASS LENSES 8,000 Imerys 466 INDUSTRIAL MINERALS PRODUCER ---------------------------------------------------------------------------- 2,735 >NORWAY: 3.2% 209,500 Den Norske Bank 1,429 LARGEST NORWEGIAN BANK ---------------------------------------------------------------------------- >CZECH REPUBLIC: 3.0% 12,000 Komercni Banka 1,346 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >GERMANY: 2.5% 20,000 Rhoen-Klinikum $ 1,099 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- >SPAIN: 1.8% 43,000 Red Electrica 732 SPANISH POWER GRID 6,000 Gestevis Telecino (b) 90 SPAIN'S SECOND LARGEST BROADCASTER ---------------------------------------------------------------------------- 822 >LUXEMBOURG: 1.7% 90,000 SES Global 761 SATELLITE BROADCASTING SERVICES ---------------------------------------------------------------------------- >ITALY: 1.1% 34,000 Autogrill (b) 482 RESTAURANTS & CATERING FOR TRAVELERS ---------------------------------------------------------------------------- ----------- Europe: Total 25,161 ---------------------------------------------------------------------------- ASIA: 29.4% >JAPAN: 25.8% 9,700 Funai Electric 1,464 CONSUMER ELECTRONICS 38,000 Daito Trust Construction 1,461 APARTMENT BUILDER 32,300 Sugi Pharmacy 1,322 DRUGSTORES 12,400 Hoya 1,301 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 71,000 Ushio 1,285 INDUSTRIAL LIGHT SOURCES 25,100 Uni-Charm 1,251 INFANT HYGIENE & FEMININE CARE PRODUCTS 51,500 Shimano 1,225 BICYCLE COMPONENTS & FISHING TACKLE 11,500 Fast Retailing 934 APPAREL RETAILER 310 Dentsu 801 ADVERTISING AGENCY 23,000 Olympus Optical 436 MEDICAL EQUIPMENT & CAMERAS 11,000 Hiroshima Bank 59 REGIONAL BANK ---------------------------------------------------------------------------- 11,539 >SINGAPORE: 2.0% 83,000 Venture 873 ELECTRONIC CONTRACT MANUFACTURER ---------------------------------------------------------------------------- >HONG KONG: 1.6% 500,000 Li & Fung 733 SOURCING OF CONSUMER GOODS ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 13,145 47 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED)C0UNTIED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- OTHER COUNTRIES: 8.2% >CANADA: 5.5% 52,000 Talisman Energy $ 1,131 OIL & GAS PRODUCER 50,000 Noranda 857 DIVERSIFIED NON-FERROUS METALS MINER 80,000 Kinross Gold (b) 444 GOLD MINING ---------------------------------------------------------------------------- 2,432 >AUSTRALIA: 2.7% 260,000 Lion Nathan 1,225 BEER BREWER/DISTRIBUTOR ---------------------------------------------------------------------------- ----------- OTHER COUNTRIES: TOTAL 3,657 ---------------------------------------------------------------------------- LATIN AMERICA: 2.9% >ARGENTINA: 2.9% 39,200 Tenaris 1,284 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- ----------- LATIN AMERICA: TOTAL 1,284 ----------- TOTAL COMMON STOCKS: 96.8% 43,247 (COST: $32,172) PRINCIPAL AMOUNT(000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.7% $1,663 Repurchase Agreement with State Street Bank & Trust Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $1,698 (Repurchase proceeds: $1,663) $1,663 ---------------------------------------------------------------------------- (COST: $1,663) 1,663 ----------- TOTAL INVESTMENTS (C): 100.5% 44,910 (COST: $33,835) (A) CASH AND OTHER ASSETS LESS LIABILITIES: (0.5%) (208) ----------- TOTAL NET ASSETS: 100% $44,702 ============================================================================ -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purpose cost of investments was the same and net unrealized appreciation was $11,075 consisting of gross unrealized appreciation of $11,840 and gross unrealized depreciation of $765. (b) Non-income producing security. (c) On June 30, 2004, the Fund's total investments were denominated in currencies as follows: CURRENCY VALUE % OF NET ASSETS ================================================================ Japanese Yen $ 11,539 25.8% Euro 11,201 25.1 British Pounds 7,974 17.8 Swiss Franc 3,212 7.2 US Dollar 2,946 6.6 Canadian Dollar 2,432 5.5 Other currencies less than 5% of total net assets 5,606 12.5 --------- --------------- $ 44,910 100.5% ========= =============== 1-800-922-6769 48 COLUMBIA ACORN INTERNATIONAL SELECT >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2004, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $3,031 6.8% Electrical Components 2,300 5.2 Machinery 1,485 3.3 Construction 1,461 3.3 Steel 1,284 2.9 Industrial Distribution 957 2.1 Outsourcing and Training Services 733 1.6 Specialty Chemicals 580 1.3 Industrial Materials 466 1.0 ---------------------------------------------------------------------------- 12,297 27.5 >CONSUMER GOODS/SERVICES Retail 2,813 6.3 Durable Goods 2,138 4.8 Consumer Electronics 1,464 3.3 Nondurables 1,251 2.8 Beverage 1,225 2.7 Restaurants 1,217 2.7 Food 530 1.2 Casinos 84 0.2 ---------------------------------------------------------------------------- 10,722 24.0 >FINANCE Banks 6,649 14.9 Insurance 745 1.7 ---------------------------------------------------------------------------- 7,394 16.6 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION TECHNOLOGY Semiconductors and Related Equipment $1,301 2.9% Television Broadcasting 882 2.0 Contract Manufacturing 873 1.9 Advertising 801 1.8 Satellite Broadcasting Services 761 1.7 ---------------------------------------------------------------------------- 4,618 10.3 >ENERGY/MINERALS Oil/Gas Producers 2,798 6.3 Mining 857 1.9 Non-Ferrous Metals 444 1.0 ---------------------------------------------------------------------------- 4,099 9.2 >HEALTH CARE Medical Equipment 2,286 5.1 Hospital Management 1,099 2.5 ---------------------------------------------------------------------------- 3,385 7.6 >OTHER INDUSTRIES Regulated Utilities 732 1.6 ---------------------------------------------------------------------------- 732 1.6 ---------------------------- TOTAL COMMON STOCKS 43,247 96.8 SHORT-TERM OBLIGATIONS 1,663 3.7 ---------------------------- TOTAL INVESTMENTS 44,910 100.5 CASH AND OTHER ASSETS LESS LIABILITIES (208) (0.5) ---------------------------- NET ASSETS $44,702 100.0% ============================================================================ 49 COLUMBIA ACORN SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 ADDITIONS ---------------------------------------------------------------------------- INFORMATION McAfee 2,200,000 2,750,000 PeopleSoft 1,800,000 2,135,000 Skillsoft Publishing 0 2,063,700 Tellabs 0 3,400,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Abercrombie & Fitch 660,000 855,000 Safeway 1,050,000 1,500,000 ---------------------------------------------------------------------------- FINANCE SEI Investments 600,000 729,500 ---------------------------------------------------------------------------- HEALTH CARE Lincare Holdings 660,000 835,000 NUMBER OF SHARES ---------------------------- 03/31/04 06/30/04 SALES ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Weight Watchers 1,040,000 728,000 ---------------------------------------------------------------------------- FINANCE TCF Financial 1,160,000 985,000 ---------------------------------------------------------------------------- HEALTH CARE Guidant 355,000 0 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Expeditors International of Washington 720,000 620,000 1-800-922-6769 50 COLUMBIA ACORN SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2004 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 90.5% ---------------------------------------------------------------------------- INFORMATION: 34.0% >BUSINESS SOFTWARE: 12.8% 2,750,000 McAfee (b) $49,858 SECURITY SOFTWARE & SERVICES 2,135,000 PeopleSoft (b) 39,498 HR, ERP, CRM & SUPPLY CHAIN SOFTWARE 1,300,000 Synopsys (b) 36,959 SOFTWARE FOR DESIGNING SEMICONDUCTOR CHIPS ---------------------------------------------------------------------------- 126,315 >BUSINESS INFORMATION: 6.1% 470,000 Moody's 30,390 CREDIT RATING SERVICE 900,000 Fair Isaac 30,042 CREDIT SCORING & DECISION ANALYTIC SOFTWARE ---------------------------------------------------------------------------- 60,432 >ADVERTISING: 3.8% 2,700,000 Interpublic Group (b) 37,071 ADVERTISING ---------------------------------------------------------------------------- >INSTRUMENTATION: 3.4% 1,000,000 Tektronix 34,020 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- >CONSUMER SOFTWARE: 3.3% 600,000 Electronic Arts (b) 32,730 ENTERTAINMENT SOFTWARE ---------------------------------------------------------------------------- >TELECOMMUNICATION EQUIPMENT: 3.0% 3,400,000 Tellabs (b) 29,716 TELECOMMUNICATIONS & CABLE EQUIPMENT --------------------------------------------------------------------------- >INTERNET: 1.6% 2,063,700 Skillsoft Publishing (b) 15,684 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 335,968 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 32.8% >RETAIL: 10.3% 1,500,000 Safeway (b) 38,010 RETAIL FOOD & DRUG STORES 855,000 Abercrombie & Fitch 33,131 TEEN APPAREL RETAILER 750,000 Costco 30,802 WAREHOUSE SUPERSTORES ---------------------------------------------------------------------------- 101,943 >CONSUMER SERVICES: 7.7% 1,250,000 ITT Educational Services (b) 47,525 TECHNOLOGY-ORIENTED POST SECONDARY DEGREE PROGRAMS 728,000 Weight Watchers (b) 28,494 WEIGHT LOSS PROGRAMS ---------------------------------------------------------------------------- 76,019 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FURNITURE & MANUFACTURERS: 6.3% 1,160,000 Herman Miller $33,570 OFFICE FURNITURE 630,000 Coach (b) 28,470 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES ---------------------------------------------------------------------------- 62,040 >LEISURE VEHICLES: 6.3% 1,000,000 Harley-Davidson 61,940 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- >ENTERTAINMENT: 2.2% 460,000 International Speedway Motors 22,374 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 324,316 ---------------------------------------------------------------------------- FINANCE: 13.5% >BANKS: 8.0% 985,000 TCF Financial 57,179 GREAT LAKES BANK 750,000 Associated Banc-Corp 22,223 MIDWEST BANK ---------------------------------------------------------------------------- 79,402 >INSURANCE: 3.4% 120,000 Markel (b) 33,300 SPECIALTY INSURANCE ---------------------------------------------------------------------------- >MONEY MANAGEMENT: 2.1% 729,500 SEI Investments 21,185 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 133,887 ---------------------------------------------------------------------------- HEALTH CARE: 7.1% >SERVICES: 7.1% 2,750,000 First Health (b) 42,928 PPO NETWORK 835,000 Lincare Holdings (b) 27,438 HOME HEALTH CARE SERVICES ---------------------------------------------------------------------------- 70,366 ----------- HEALTH CARE: TOTAL 70,366 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 3.1% >LOGISTICS: 3.1% 620,000 Expeditors International of Washington 30,634 INTERNATIONAL FREIGHT FORWARDER ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 30,634 ----------- TOTAL COMMON STOCKS: 90.5% 895,171 (COST: $768,527) 51 COLUMBIA ACORN SELECT >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 9.6% Yield 1.00% - 1.30% Due 7/1/04 - 7/8/04 $35,000 Virginia Electric $ 34,991 30,000 Prudential Funding 29,999 25,000 Coca Cola Enterprises 25,000 4,668 Repurchase Agreement with State Street Bank & Trust Dated 6/03/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation Notes, Maturing 2/15/05, Market Value $4,765 (Repurchase proceeds: $4,668) 4,668 ---------------------------------------------------------------------------- (AMORTIZED COST: $94,658) 94,658 ----------- TOTAL INVESTMENTS: 100.1% 989,829 (COST: $863,185) (A) CASH AND OTHER ASSETS LESS LIABILITIES: (0.1%) (848) ----------- TOTAL NET ASSETS: 100% $ 988,981 ---------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $126,644, consisting of gross unrealized appreciation of $158,975 and gross unrealized depreciation of $32,331. (b) Non-income producing security. 1-800-922-6769 52 COLUMBIA ACORN FAMILY OF FUNDS > STATEMENTS OF ASSETS AND LIABILITIES > STATEMENTS OF OPERATIONS > STATEMENTS OF CHANGES IN NET ASSETS > FINANCIAL HIGHLIGHTS > NOTES TO FINANCIAL STATEMENTS 53 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN JUNE 30, 2004 FUND INTERNATIONAL USA ------------- -------------------- ------------------- ----------------- (IN THOUSANDS) ASSETS Unaffiliated investments, at Cost $ 6,441,885 $ 1,248,315 $ 542,747 Affiliated investments, at Cost (See Note 4) 1,459,400 -- 5,636 -------------------- ------------------- ----------------- Unaffiliated investments, at Value $ 10,223,691 $ 1,728,717 $ 763,106 Affiliated investments, at Value (See Note 4) 2,055,516 -- 4,990 Cash -- -- 1 Foreign currency (cost: Columbia Acorn Fund $12,413; Columbia Acorn International $3,802; Columbia Acorn International Select $94) 12,404 3,794 -- Receivable for: Investments sold 11,447 21,118 -- Fund shares sold 25,309 928 1,378 Dividends and interest 6,289 3,910 92 Expense reimbursement due from Advisor -- -- -- Deferred Trustees' Compensation Investments 1,155 440 79 Other assets 691 612 89 -------------------- ------------------- ----------------- Total Assets 12,336,502 1,759,519 769,735 LIABILITIES Payable to custodian bank -- 18,587 -- Payable for: Investments purchased 30,626 6,414 17 Fund shares redeemed 11,305 5,528 1,562 Custodian -- -- 2 Management fee -- 3 -- 12b-1 Service & Distribution fees 2,661 71 118 Legal & audit fees 37 -- -- Reports to shareholders -- -- -- Deferred Trustees' fees 1,155 440 79 Transfer agent fees 441 99 41 Trustees' fees -- -- -- Registration & blue sky fees 60 16 -- Foreign capital gains tax 667 175 -- -------------------- ------------------- ----------------- Total Liabilities 46,952 31,333 1,819 -------------------- ------------------- ----------------- NET ASSETS $ 12,289,550 $ 1,728,186 $ 767,916 ==================== =================== ================= COMPOSITION OF NET ASSETS Paid in capital $ 7,481,497 $ 1,386,259 $ 555,632 Undistributed net investment income (Accumulated net investment loss) 9,339 13,761 (3,256) Accumulated net realized gain (loss) 421,428 (150,889) (4,173) Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 4,377,922 479,187 219,713 Foreign currency transactions 31 43 -- Foreign capital gains tax (667) (175) -- -------------------- ------------------- ----------------- NET ASSETS $ 12,289,550 $ 1,728,186 $ 767,916 ==================== =================== ================= Net asset value per share-- Class A (a) $ 24.11 $ 24.20 $ 22.74 (Net assets/shares) ($2,317,581/96,128) ($55,692/2,302) ($103,174/4,538) Maximum offering price per share-- Class A (b) $ 25.58 $ 25.68 $ 24.13 (Net asset value per share/ front-end sales charge) ($24.11/0.9425) ($24.20/0.9425) ($22.74/0.9425) Net asset value and offering price per share-- Class B (a) $ 23.54 $ 23.81 $ 22.23 (Net assets/shares) ($1,302,614/55,347) ($45,081/1,894) ($70,114/3,153) Net asset value and offering price per share-- Class C (a) $ 23.54 $ 23.82 $ 22.25 (Net assets/shares) ($981,925/41,721) ($25,023/1,051) ($38,992/1,753) Net asset value, offering and redemption price per share-- Class Z $ 24.56 $ 24.39 $ 23.08 (Net assets/shares) ($7,687,430/313,049) ($1,602,390/65,709) ($555,636/24,074)
COLUMBIA COLUMBIA ACORN ACORN JUNE 30, 2004 INTERNATIONAL SELECT SELECT ------------- -------------------- ------------------- (IN THOUSANDS) ASSETS Unaffiliated investments, at Cost $ 33,835 $ 863,185 Affiliated investments, at Cost (See Note 4) -- -- -------------------- ------------------- Unaffiliated investments, at Value $ 44,910 $ 989,829 Affiliated investments, at Value (See Note 4) -- -- Cash -- 1 Foreign currency (cost: Columbia Acorn Fund $12,413; Columbia Acorn International $3,802; Columbia Acorn International Select $94) 93 -- Receivable for: Investments sold 29 -- Fund shares sold 83 4,435 Dividends and interest 46 84 Expense reimbursement due from Advisor 8 -- Deferred Trustees' Compensation Investments -- -- Other assets 1 72 -------------------- ------------------- Total Assets 45,170 994,421 LIABILITIES Payable to custodian bank -- -- Payable for: Investments purchased 392 3,225 Fund shares redeemed 28 1,791 Custodian -- 2 Management fee -- -- 12b-1 Service & Distribution fees 5 326 Legal & audit fees 8 11 Reports to shareholders 11 -- Deferred Trustees' fees -- -- Transfer agent fees 9 79 Trustees' fees 1 -- Registration & blue sky fees 14 6 Foreign capital gains tax -- -- -------------------- ------------------- Total Liabilities 468 5,440 -------------------- ------------------- NET ASSETS $ 44,702 $ 988,981 ==================== =================== COMPOSITION OF NET ASSETS Paid in capital $ 67,136 $ 819,743 Undistributed net investment income (Accumulated net investment loss) 41 (4,253) Accumulated net realized gain (loss) (33,551) 46,847 Net unrealized appreciation (depreciation) on: Investments (net of unrealized PFIC gains of $1,215 for Columbia Acorn International) 11,075 126,644 Foreign currency transactions 1 -- Foreign capital gains tax -- -- -------------------- ------------------- NET ASSETS $ 44,702 $ 988,981 ==================== =================== Net asset value per share-- Class A (a) $ 15.50 $ 19.30 (Net assets/shares) ($3,194/206) ($384,079/19,897) Maximum offering price per share-- Class A (b) $ 16.45 $ 20.48 (Net asset value per share/ front-end sales charge) ($15.50/0.9425) ($19.30/0.9425) Net asset value and offering price per share-- Class B (a) $ 15.12 $ 18.84 (Net assets/shares) ($3,928/260) ($156,718/8,320) Net asset value and offering price per share-- Class C (a) $ 15.15 $ 18.84 (Net assets/shares) ($2,094/138) ($89,703/4,762) Net asset value, offering and redemption price per share-- Class Z $ 15.63 $ 19.55 (Net assets/shares) ($35,486/2,271) ($358,481/18,336)
(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. 1-800-922-6769 54 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004
COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN (IN THOUSANDS) FUND INTERNATIONAL USA -------------- -------------------- ------------------- ----------------- INVESTMENT INCOME: Dividend income $ 62,690 $ 26,029 $ 1,080 Dividend income from affiliates (See Note 4) 3,333 -- -- Interest income 3,970 231 255 -------------------- ------------------- ----------------- 69,993 26,260 1,335 Foreign taxes withheld (3,122) (2,608) (1) -------------------- ------------------- ----------------- Total Investment Income 66,871 23,652 1,334 EXPENSES: Management fee 38,885 7,073 3,299 Administration fee 2,939 430 181 12b-1 Service and Distribution fees: Class A 3,815 98 171 Class B 6,333 214 343 Class C 4,738 124 189 Transfer agent fees: Class A 1,663 53 83 Class B 1,571 76 88 Class C 1,019 30 39 Class Z 1,421 591 119 Custody fees 634 520 16 Trustees' fees 209 34 13 Registration & blue sky fees 302 49 55 Reports to shareholders 834 148 87 Legal & audit fees 669 75 29 Non-recurring costs (See Note 7) 135 20 8 Other expenses 118 21 7 -------------------- ------------------- ----------------- Total expenses 65,285 9,556 4,727 Less custody fees paid indirectly (16) --* (1) Less reimbursement of expenses by Advisor (647) (93) (36) Non-recurring costs reimbursed (See Note 7) (135) (20) (8) -------------------- ------------------- ----------------- Net Expenses 64,487 9,443 4,682 -------------------- ------------------- ----------------- Net Investment Income (Loss) 2,384 14,209 (3,348) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 362,021 87,220 12,979 Affiliated investments (See Note 4) 62,019 -- (3,800) Foreign currency transactions (41) 416 -- -------------------- ------------------- ----------------- Net realized gain 423,999 87,636 9,179 ==================== =================== ================= Net change in net unrealized appreciation/ depreciation on: Unaffiliated investments 553,555 40,841 64,025 Affiliated investments (See Note 4) 4,005 -- (2,712) Foreign currency transactions 1,560 518 -- Foreign capital gains tax (667) (175) -- -------------------- ------------------- ----------------- Net change in unrealized appreciation/ depreciation 558,453 41,184 61,313 ==================== =================== ================= Net realized and unrealized gain 982,452 128,820 70,492 -------------------- ------------------- ----------------- Net Increase in Net Assets resulting from Operations $ 984,836 $ 143,029 $ 67,144 ==================== =================== =================
COLUMBIA COLUMBIA ACORN ACORN (IN THOUSANDS) INTERNATIONAL SELECT SELECT -------------- -------------------- ------------------- INVESTMENT INCOME: Dividend income $ 458 $ 2,238 Dividend income from affiliates (See Note 4) -- -- Interest income 7 427 -------------------- ------------------- 465 2,665 Foreign taxes withheld (48) -- -------------------- ------------------- Total Investment Income 417 2,665 EXPENSES: Management fee 210 4,008 Administration fee 11 223 12b-1 Service and Distribution fees: Class A 5 583 Class B 17 700 Class C 17 397 Transfer agent fees: Class A 4 283 Class B 9 214 Class C 4 101 Class Z 33 162 Custody fees 22 13 Trustees' fees 3 8 Registration & blue sky fees 38 113 Reports to shareholders 31 113 Legal & audit fees 12 34 Non-recurring costs (See Note 7) 1 10 Other expenses 3 9 -------------------- ------------------- Total expenses 420 6,971 Less custody fees paid indirectly --* --* Less reimbursement of expenses by Advisor (58) (64) Non-recurring costs reimbursed (See Note 7) (1) (10) -------------------- ------------------- Net Expenses 361 6,897 -------------------- ------------------- Net Investment Income (Loss) 56 (4,232) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 4,798 47,083 Affiliated investments (See Note 4) -- -- Foreign currency transactions (3) -- -------------------- ------------------- Net realized gain 4,795 47,083 ==================== =================== Net change in net unrealized appreciation/ depreciation on: Unaffiliated investments (1,679) 16,432 Affiliated investments (See Note 4) -- -- Foreign currency transactions (13) -- Foreign capital gains tax -- -- -------------------- ------------------- Net change in unrealized appreciation/ depreciation (1,692) 16,432 ==================== =================== Net realized and unrealized gain 3,103 63,515 -------------------- ------------------- Net Increase in Net Assets resulting from Operations $ 3,159 $ 59,283 ==================== ===================
* Rounds to less than $500. See accompanying notes to financial statements. 55 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, --------------------------------- -------------- -------------- -------------- -------------- (IN THOUSANDS) 2004 2003 2004 2003 OPERATIONS: Net investment income (loss) $ 2,384 $ (9,911) $ 14,209 $ 15,934 Net realized gain (loss) on investments and foreign currency transactions 423,999 90,682 87,636 (7,144) Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 558,453 2,974,675 41,184 561,990 -------------- -------------- -------------- -------------- Net Increase from Operations 984,836 3,055,446 143,029 570,780 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (356) (106) Net realized gain -- Class A (2,709) (1,752) -- -- Net investment income -- Class B -- -- (75) -- Net realized gain -- Class B (1,570) (1,116) -- -- Net investment income -- Class C -- -- (42) -- Net realized gain -- Class C (1,182) (813) -- -- Net investment income -- Class Z -- -- (16,468) (5,829) Net realized gain -- Class Z (8,844) (6,236) -- -- -------------- -------------- -------------- -------------- Total Distribution to Shareholders (14,305) (9,917) (16,941) (5,935) SHARE TRANSACTIONS: Subscriptions -- Class A 394,994 1,041,782 9,334 45,279 Distributions reinvested -- Class A 2,456 1,584 288 80 Redemptions -- Class A (237,930) (259,438) (10,981) (42,948) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class A 159,520 783,928 (1,359) 2,411 Subscriptions -- Class B 55,758 364,144 5,820 11,463 Distributions reinvested -- Class B 1,433 1,018 66 -- Redemptions -- Class B (75,752) (88,744) (3,800) (5,639) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class B (18,561) 276,418 2,086 5,824 Subscriptions -- Class C 77,410 375,513 4,006 14,870 Distributions reinvested -- Class C 972 673 35 -- Redemptions -- Class C (70,493) (73,548) (3,818) (13,396) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class C 7,889 302,638 223 1,474 Subscriptions -- Class Z 873,722 1,682,204 95,148 220,802 Distributions reinvested -- Class Z 7,792 5,443 14,698 5,336 Redemptions -- Class Z (880,158) (667,986) (187,093) (434,204) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class Z 1,356 1,019,661 (77,247) (208,066) -------------- -------------- -------------- -------------- Net Increase (Decrease) from Share Transactions 150,204 2,382,645 (76,297) (198,357) -------------- -------------- -------------- -------------- Redemption Fees -- -- 63 400 -------------- -------------- -------------- -------------- Total Increase in Net Assets 1,120,735 5,428,174 49,854 366,888 NET ASSETS: Beginning of period 11,168,815 5,740,641 1,678,332 1,311,444 -------------- -------------- -------------- -------------- End of period $ 12,289,550 $ 11,168,815 $ 1,728,186 $ 1,678,332 ============== ============== ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ 9,339 $ 6,955 $ 13,761 $ 16,493 ============== ============== ============== ==============
COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, --------------------------------- -------------- -------------- -------------- -------------- (IN THOUSANDS) 2004 2003 2004 2003 OPERATIONS: Net investment income (loss) $ (3,348) $ (4,408) $ 56 $ 136 Net realized gain (loss) on investments and foreign currency transactions 9,179 7,301 4,795 (425) Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 61,313 172,313 (1,692) 12,936 -------------- -------------- -------------- -------------- Net Increase from Operations 67,144 175,206 3,159 12,647 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (6) -- Net realized gain -- Class A -- -- -- -- Net investment income -- Class B -- -- -- -- Net realized gain -- Class B -- -- -- -- Net investment income -- Class C -- -- -- -- Net realized gain -- Class C -- -- -- -- Net investment income -- Class Z -- -- (151) (19) Net realized gain -- Class Z -- -- -- -- -------------- -------------- -------------- -------------- Total Distribution to Shareholders -- -- (157) (19) SHARE TRANSACTIONS: Subscriptions -- Class A 17,327 60,457 821 2,350 Distributions reinvested -- Class A -- -- 5 -- Redemptions -- Class A (12,605) (23,188) (380) (3,212) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class A 4,722 37,269 446 (862) Subscriptions -- Class B 3,084 19,327 762 1,577 Distributions reinvested -- Class B -- -- -- -- Redemptions -- Class B (5,153) (8,053) (239) (989) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class B (2,069) 11,274 523 588 Subscriptions -- Class C 3,376 13,056 445 3,211 Distributions reinvested -- Class C -- -- -- -- Redemptions -- Class C (3,355) (4,575) (2,222) (3,564) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class C 21 8,481 (1,777) (353) Subscriptions -- Class Z 116,241 221,496 2,488 23,389 Distributions reinvested -- Class Z -- -- 146 18 Redemptions -- Class Z (111,417) (83,975) (3,534) (25,393) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class Z 4,824 137,521 (900) (1,986) -------------- -------------- -------------- -------------- Net Increase (Decrease) from Share Transactions 7,498 194,545 (1,708) (2,613) -------------- -------------- -------------- -------------- Redemption Fees -- -- 2 39 -------------- -------------- -------------- -------------- Total Increase in Net Assets 74,642 369,751 1,296 10,054 NET ASSETS: Beginning of period 693,274 323,523 43,406 33,352 -------------- -------------- -------------- -------------- End of period $ 767,916 $ 693,274 $ 44,702 $ 43,406 ============== ============== ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ (3,256) $ 92 $ 41 $ 142 ============== ============== ============== ==============
COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS YEAR ENDED INCREASE (DECREASE) IN NET ASSETS ENDED JUNE 30, DECEMBER 31, --------------------------------- -------------- -------------- (IN THOUSANDS) 2004 2003 OPERATIONS: Net investment income (loss) $ (4,232) $ (4,419) Net realized gain (loss) on investments and foreign currency transactions 47,083 8,643 Net change in net unrealized appreciation (depreciation) of investments and foreign currency transactions 16,432 95,023 -------------- -------------- Net Increase from Operations 59,283 99,247 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- Net realized gain -- Class A -- (1,172) Net investment income -- Class B -- -- Net realized gain -- Class B -- (563) Net investment income -- Class C -- -- Net realized gain -- Class C -- (301) Net investment income -- Class Z -- -- Net realized gain -- Class Z -- (2,145) -------------- -------------- Total Distribution to Shareholders -- (4,181) SHARE TRANSACTIONS: Subscriptions -- Class A 147,794 237,520 Distributions reinvested -- Class A -- 1,096 Redemptions -- Class A (50,572) (30,378) -------------- -------------- Net Increase (Decrease) -- Class A 97,222 208,238 Subscriptions -- Class B 39,146 78,641 Distributions reinvested -- Class B -- 507 Redemptions -- Class B (9,370) (9,321) -------------- -------------- Net Increase (Decrease) -- Class B 29,776 69,827 Subscriptions -- Class C 28,340 50,838 Distributions reinvested -- Class C -- 257 Redemptions -- Class C (7,816) (4,391) -------------- -------------- Net Increase (Decrease) -- Class C 20,524 46,704 Subscriptions -- Class Z 110,515 301,467 Distributions reinvested -- Class Z -- 1,920 Redemptions -- Class Z (68,958) (150,913) -------------- -------------- Net Increase (Decrease) -- Class Z 41,557 152,474 -------------- -------------- Net Increase (Decrease) from Share Transactions 189,079 477,243 -------------- -------------- Redemption Fees -- -- -------------- -------------- Total Increase in Net Assets 248,362 572,309 NET ASSETS: Beginning of period 740,619 168,310 -------------- -------------- End of period $ 988,981 $ 740,619 ============== ============== UNDISTRIBUTED NET INVESTMENT INCOME (ACCUMULATED NET INVESTMENT LOSS) $ (4,253) $ (21) ============== ==============
See accompanying notes to financial statements. 1-800-922-6769 56-57 Spread COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ---------------------------------------- -------------- -------------- -------------- -------------- (IN THOUSANDS) 2004 2003 2004 2003 Subscriptions -- Class A 16,980 56,202 396 2,734 Shares issued in reinvestment and capital gains -- Class A 105 73 13 5 Less shares redeemed -- Class A (10,239) (14,204) (462) (2,590) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class A 6,846 42,071 (53) 149 Subscriptions -- Class B 2,448 20,371 252 653 Shares issued in reinvestment and capital gains -- Class B 63 48 3 -- Less shares redeemed -- Class B (3,332) (5,154) (164) (343) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class B (821) 15,265 91 310 Subscriptions -- Class C 3,397 20,690 173 911 Shares issued in reinvestment and capital gains -- Class C 43 32 2 -- Less shares redeemed -- Class C (3,096) (4,207) (166) (833) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class C 344 16,515 9 78 Subscriptions -- Class Z 36,993 89,984 4,001 13,104 Shares issued in reinvestment and capital gains -- Class Z 327 249 625 313 Less shares redeemed -- Class Z (37,398) (36,502) (7,872) (25,027) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class Z (78) 53,731 (3,246) (11,610) -------------- -------------- -------------- -------------- Net Increase (Decrease) in Shares of Beneficial Interest 6,291 127,582 (3,199) (11,073) -------------- -------------- -------------- --------------
COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ENDED JUNE 30, DECEMBER 31, ---------------------------------------- -------------- -------------- -------------- -------------- (IN THOUSANDS) 2004 2003 2004 2003 Subscriptions -- Class A 795 3,345 54 216 Shares issued in reinvestment and capital gains -- Class A -- -- -- -- Less shares redeemed -- Class A (579) (1,309) (25) (294) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class A 216 2,036 29 (78) Subscriptions -- Class B 144 1,087 52 137 Shares issued in reinvestment and capital gains -- Class B -- -- -- -- Less shares redeemed -- Class B (241) (512) (16) (95) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class B (97) 575 36 42 Subscriptions -- Class C 158 724 30 311 Shares issued in reinvestment and capital gains -- Class C -- -- -- -- Less shares redeemed -- Class C (157) (279) (153) (339) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class C 1 445 (123) (28) Subscriptions -- Class Z 5,262 12,184 163 2,239 Shares issued in reinvestment and capital gains -- Class Z -- -- 10 2 Less shares redeemed -- Class Z (5,074) (4,772) (233) (2,435) -------------- -------------- -------------- -------------- Net Increase (Decrease) -- Class Z 188 7,412 (60) (194) -------------- -------------- -------------- -------------- Net Increase (Decrease) in Shares of Beneficial Interest 308 10,468 (118) (258) -------------- -------------- -------------- --------------
COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ---------------------------------------- -------------- -------------- (IN THOUSANDS) 2004 2003 Subscriptions -- Class A 7,899 14,227 Shares issued in reinvestment and capital gains -- Class A -- 63 Less shares redeemed -- Class A (2,702) (1,869) -------------- -------------- Net Increase (Decrease) -- Class A 5,197 12,421 Subscriptions -- Class B 2,138 4,854 Shares issued in reinvestment and capital gains -- Class B -- 30 Less shares redeemed -- Class B (512) (601) -------------- -------------- Net Increase (Decrease) -- Class B 1,626 4,283 Subscriptions -- Class C 1,549 3,102 Shares issued in reinvestment and capital gains -- Class C -- 15 Less shares redeemed -- Class C (428) (271) -------------- -------------- Net Increase (Decrease) -- Class C 1,121 2,846 Subscriptions -- Class Z 5,839 18,117 Shares issued in reinvestment and capital gains -- Class Z -- 108 Less shares redeemed -- Class Z (3,641) (8,676) -------------- -------------- Net Increase (Decrease) -- Class Z 2,198 9,549 -------------- -------------- Net Increase (Decrease) in Shares of Beneficial Interest 10,142 29,099 -------------- --------------
See accompanying notes to financial statements. 1-800-922-6769 58-59 Spread COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS
(UNAUDITED) SIX MONTHS COLUMBIA ACORN FUND CLASS Z ENDED JUNE 30, ------------------- ----------- -------------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.56 $ 15.50 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.04 0.03 Net realized and unrealized gain (loss) 1.99 7.05 -------------- ----------- Total from Investment Operations 2.03 7.08 -------------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- From net realized gains (0.03) (0.02) -------------- ----------- Total Distributions Declared to Shareholders (0.03) (0.02) ============== =========== NET ASSET VALUE, END OF PERIOD $ 24.56 $ 22.56 ============== =========== Total Return (b) 8.99%(c)(d) 45.68% ============== =========== RATIOS TO AVERAGE NET ASSETS Expenses (e) 0.79%(f) 0.80% Net investment income (e) 0.35%(f) 0.17% Reimbursement 0.01%(f) -- Portfolio turnover rate 11%(d) 10% Net assets at end of period (in millions) $ 7,687 $ 7,065
COLUMBIA ACORN FUND YEARS ENDED DECEMBER 31, ------------------- ------------------------------ ----------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.88 $ 17.21 $ 18.53 $ 16.85 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.02 0.05 0.10 0.09 Net realized and unrealized gain (loss) (2.40) 1.01 1.55 5.22 ----------- -------------- ----------- ----------- Total from Investment Operations (2.38) 1.06 1.65 5.31 ----------- -------------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.04) (0.11) (0.09) From net realized gains -- (0.35) (2.86) (3.54) ----------- -------------- ----------- ----------- Total Distributions Declared to Shareholders -- (0.39) (2.97) (3.63) =========== ============== =========== =========== NET ASSET VALUE, END OF PERIOD $ 15.50 $ 17.88 $ 17.21 $ 18.53 =========== ============== =========== =========== Total Return (b) (13.31)% 6.14% 10.06% 33.40% =========== ============== =========== =========== RATIOS TO AVERAGE NET ASSETS Expenses (e) 0.82% 0.82% 0.83% 0.85% Net investment income (e) 0.15% 0.28% 0.55% 0.49% Reimbursement -- -- -- -- Portfolio turnover rate 13% 20% 29% 34% Net assets at end of period (IN MILLIONS) $ 4,022 $ 4,220 $ 3,983 $ 3,921
(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 Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized.
(UNAUDITED) SIX MONTHS COLUMBIA ACORN INTERNATIONAL CLASS Z ENDED JUNE 30, ---------------------------- ----------- -------------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 22.66 $ 15.40 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.20 0.21 Net realized and unrealized gain (loss) 1.78 7.13 -------------- ----------- Total from Investment Operations 1.98 7.34 -------------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.25) (0.08) From net realized gains -- -- -------------- ----------- Total Distributions Declared to Shareholders (0.25) (0.08) ============== =========== NET ASSET VALUE, END OF PERIOD $ 24.39 $ 22.66 ============== =========== Total Return (b) 8.78%(c)(d) 47.80% ============== =========== RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.03%(f) 1.05% Net investment income (e) 1.72%(f) 1.19% Reimbursement 0.01%(f) -- Portfolio turnover rate 25%(d) 40% Net assets at end of period (IN MILLIONS) $ 1,602 $ 1,563
COLUMBIA ACORN INTERNATIONAL YEARS ENDED DECEMBER 31, ---------------------------- ------------------------------ ----------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 18.47 $ 23.85 $ 35.33 $ 20.82 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.14 0.12 0.01 0.83 Net realized and unrealized gain (loss) (3.10) (5.11) (6.73) 15.45 ----------- -------------- ----------- ----------- Total from Investment Operations (2.96) (4.99) (6.72) 16.28 ----------- -------------- ----------- ----------- Less Distributions Declared to Shareholders From net investment income (0.11) -- (0.66) (0.22) From net realized gains -- (0.39) (4.10) (1.55) ----------- -------------- ----------- ----------- Total Distributions Declared to Shareholders (0.11) (0.39) (4.76) (1.77) =========== ============== =========== =========== NET ASSET VALUE, END OF PERIOD $ 15.40 $ 18.47 $ 23.85 $ 35.33 =========== ============== =========== =========== Total Return (b) (16.10)% (21.11)% (20.02)% 79.20% =========== ============== =========== =========== RATIOS TO AVERAGE NET ASSETS Expenses (e) 1.06% 1.06% 1.05% 1.11% Net investment income (e) 0.80% 0.62% 0.02% 0.12% Reimbursement -- -- -- -- Portfolio turnover rate 52% 45% 63% 46% Net assets at end of period (IN MILLIONS) $ 1,241 $ 1,613 $ 2,459 $ 2,868
(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 Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized.
(UNAUDITED) SIX MONTHS COLUMBIA ACORN USA CLASS Z ENDED JUNE 30, ------------------ ----------- -------------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 21.01 $ 14.28 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) (0.08) (0.13) Net realized and unrealized gain (loss) 2.15 6.86 -------------- ----------- Total from Investment Operations 2.07 6.73 -------------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- From net realized gains -- -- -------------- ----------- Total Distributions Declared to Shareholders -- -- ============== =========== NET ASSET VALUE, END OF PERIOD $ 23.08 $ 21.01 ============== =========== Total Return (c) 9.85%(d)(e) 47.13% ============== =========== RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.06%(g) 1.11% Net investment income (loss) (f) (0.69)%(g) (0.72)% Reimbursement 0.01%(g) -- Portfolio turnover rate 11%(e) 7% Net assets at end of period (IN MILLIONS) $ 556 $ 502
COLUMBIA ACORN USA YEARS ENDED DECEMBER 31, ------------------ ------------------------------ ----------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.52 $ 14.90 $ 16.75 $ 14.80 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) (0.10) (0.08) (0.05) 0.00(b) Net realized and unrealized gain (loss) (3.14) 2.94 (1.48) 3.32 ----------- -------------- ----------- ----------- Total from Investment Operations (3.24) 2.86 (1.53) 3.32 ----------- -------------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.00)(b) -- From net realized gains -- (0.24) (0.32) (1.37) ----------- -------------- ----------- ----------- Total Distributions Declared to Shareholders -- (0.24) (0.32) (1.37) =========== ============== =========== =========== NET ASSET VALUE, END OF PERIOD $ 14.28 $ 17.52 $ 14.90 $ 16.75 =========== ============== =========== =========== Total Return (c) (18.49)% 19.25% (8.99)% 23.00% =========== ============== =========== =========== RATIOS TO AVERAGE NET ASSETS Expenses (f) 1.17% 1.17% 1.15% 1.15% Net investment income (loss) (f) (0.64)% (0.46)% (0.32)% 0.00%(h) Reimbursement -- -- -- -- Portfolio turnover rate 31% 24% 45% 49% Net assets at end of period (IN MILLIONS) $ 235 $ 229 $ 222 $ 371
(a) Per share data was calculated using average shares outstanding during the period. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody fees paid indirectly had no impact. (g) Annualized. (h) Rounds to less than 0.01%. See accompanying notes to financial statements. 1-800-922-6769 60-61 Spread COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS
(UNAUDITED) SIX MONTHS COLUMBIA ACORN INTERNATIONAL SELECT CLASS Z ENDED JUNE 30, ----------------------------------- ----------- -------------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 14.58 $ 10.29 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) 0.03 0.06 Net realized and unrealized gain (loss) 1.09 4.24 -------------- ----------- Total from Investment Operations 1.12 4.30 -------------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.07) (0.01) From net realized gains -- -- -------------- ----------- Total Distributions Declared to Shareholders (0.07) (0.01) ============== =========== NET ASSET VALUE, END OF PERIOD $ 15.63 $ 14.58 ============== =========== Total Return (b) 7.68%(c)(d) 41.79%(c) ============== =========== RATIOS TO AVERAGE NET ASSETS Expenses 1.45%(e)(f) 1.45%(e) Net investment income (loss) 0.42%(e)(f) 0.56%(e) Reimbursement 0.21%(f) 0.42% Portfolio turnover rate 46%(d) 69% Net assets at end of period (IN MILLIONS) $ 35 $ 34
COLUMBIA ACORN INTERNATIONAL SELECT YEARS ENDED DECEMBER 31, ----------------------------------- --------------------------------- ----------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 12.09 $ 17.15 $ 19.93 $ 11.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) 0.03 (0.05) (0.11) (0.02) Net realized and unrealized gain (loss) (1.83) (4.92) (2.53) 8.98 ----------- -------------- ----------- ----------- Total from Investment Operations (1.80) (4.97) (2.64) 8.96 ----------- -------------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.01) (0.04) -- From net realized gains -- (0.08) (0.10) (0.03) ----------- -------------- ----------- ----------- Total Distributions Declared to Shareholders -- (0.09) (0.14) (0.03) =========== ============== =========== =========== NET ASSET VALUE, END OF PERIOD $ 10.29 $ 12.09 $ 17.15 $ 19.93 =========== ============== =========== =========== Total Return (b) (14.89)%(c) (29.05)%(c) (13.35)% 81.60%(c) =========== ============== =========== =========== RATIOS TO AVERAGE NET ASSETS Expenses 1.45%(e) 1.45%(e) 1.33%(e) 1.48%(g) Net investment income (loss) 0.26%(e) (0.32)%(e) (0.42)%(e) (0.17)%(g) Reimbursement 0.33% 0.01% -- 0.09% Portfolio turnover rate 102% 82% 79% 60% Net assets at end of period (IN MILLIONS) $ 26 $ 37 $ 130 $ 107
(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 Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment loss to average daily net assets net of custody fees paid indirectly would have been 1.45% and (0.14)%, respectively for the year ended December 31, 1999.
(UNAUDITED) SIX MONTHS COLUMBIA ACORN SELECT CLASS Z ENDED JUNE 30, --------------------- ----------- -------------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 18.20 $ 14.04 INCOME FROM INVESTMENT OPERATIONS Net investment loss (a) (0.05) (0.10) Net realized and unrealized gain (loss) 1.40 4.39 -------------- ----------- Total from Investment Operations 1.35 4.29 -------------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- From net realized gains -- (0.13) -------------- ----------- Total Distributions Declared to Shareholders -- (0.13) ============== =========== NET ASSET VALUE, END OF PERIOD $ 19.55 $ 18.20 ============== =========== Total Return (b) 7.42%(c)(d) 30.61% ============== =========== RATIOS TO AVERAGE NET ASSETS Expenses 1.10%(e)(f) 1.12%(e) Net investment loss (0.50)%(e)(f) (0.63)%(e) Reimbursement 0.01%(f) -- Portfolio turnover rate 19%(d) 16% Net assets at end of period (IN MILLIONS) $ 358 $ 294
COLUMBIA ACORN SELECT YEARS ENDED DECEMBER 31, --------------------- ------------------------------- ---------- ----------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2002 2001 2000 1999 NET ASSET VALUE, BEGINNING OF PERIOD $ 15.23 $ 14.13 $ 13.70 $ 10.71 INCOME FROM INVESTMENT OPERATIONS Net investment loss (a) (0.10) (0.05) (0.07) (0.08) Net realized and unrealized gain (loss) (1.09) 1.18 1.59 3.21 ----------- -------------- ----------- ----------- Total from Investment Operations (1.19) 1.13 1.52 3.13 ----------- -------------- ----------- ----------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- (0.01) -- From net realized gains -- (0.03) (1.08) (0.14) ----------- -------------- ----------- ----------- Total Distributions Declared to Shareholders -- (0.03) (1.09) (0.14) =========== ============== =========== =========== NET ASSET VALUE, END OF PERIOD $ 14.04 $ 15.23 $ 14.13 $ 13.70 =========== ============== =========== =========== Total Return (b) (7.81)%(c) 8.00%(c) 11.68% 29.30%(c) =========== ============== =========== =========== RATIOS TO AVERAGE NET ASSETS Expenses 1.26%(e) 1.35% 1.34%(g) 1.37%(g) Net investment loss (0.67)%(e) (0.44)% (0.52)%(g) (0.62)%(g) Reimbursement 0.01% 0.03% -- 0.04% Portfolio turnover rate 40% 82% 116% 101% Net assets at end of period (IN MILLIONS) $ 93 $ 70 $ 67 $ 68
(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 Advisor not reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized. (g) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment loss to average daily net assets net of custody fees paid indirectly would have been 1.32% and (0.50)%, respectively for the year ended December 31, 2000 and 1.35% and (0.60)%, respectively for the year ended December 31, 1999. See accompanying notes to financial statements. 1-800-922-6769 62-63 Spread COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS, (UNAUDITED) 1. Nature of Operations Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select (the "Funds") are series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. The investment objective of each Fund is to seek long-term growth of capital. The Funds may issue an unlimited number of shares. The Funds offer four classes of shares: Class A, Class B, Class C and Class Z. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") is assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a CDSC. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a CDSC on redemptions made 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. Generally, you may exchange your Class Z or Class A shares of the Fund for shares of another fund at no additional charge. However, if you exchange Class Z shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less for Class Z shares of a fund distributed by Columbia Funds Distributor, Inc., that does not have a redemption fee (including Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select), the Fund will charge you a redemption fee of 2% of the redemption proceeds. Exchanges between Columbia Acorn International and Columbia Acorn International Select (or a fund distributed by Columbia Funds Distributor, Inc. that has a redemption fee) will not be subject to the 2% redemption fee. In addition, if you redeem shares of Columbia Acorn International of Columbia Acorn International Select that you have owned 60 days or less, the Fund will charge you a redemption fee of 2% of redemption proceeds, with certain exceptions. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. The financial highlights for Class A, Class B and Class C shares are presented in a separate semi-annual report. The semi-annual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begin on page 70 of this report. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are borne pro rata on the basis of the relative net assets of all classes, except each class bears certain expenses unique to that class such as distribution services, transfer agent, and certain other class specific expenses. Differences in class expenses may result in payment of different dividend distributions for each class. All the share classes of the Trust have equal rights with respect to voting subject to class specific arrangements. 2. Significant Accounting Policies >Security valuation Securities of the Funds are valued at marked value or, if a market quotation for a security is not readily available or is deemed not to be reliable because of events or circumstances that have occurred between the market quotation and the time as of which the security is to be valued, the security is valued at a fair value determined in accordance with procedures established by the Board of Trustees. Securities traded on securities exchanges or in over-the-counter markets in which transaction prices are reported are valued at the last sales price at the time of valuation. If a security is traded principally on the Nasdaq Stock Market Inc., the Nasdaq Official Closing Price will be applied. Securities for which there are no reported sales on the valuation date are valued at the latest bid quotation. Short-term debt obligations having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximate fair value. Securities for which quotations are not available are valued at a fair value as determined in good faith by the Board of Trustees. The Funds may use a systematic fair valuation model provided by an independent third party to value securities principally traded in foreign markets in order to adjust for possible stale pricing that may occur between the close of the foreign exchanges and the time for valuation. If a security is valued at a "fair value", that value is likely to be different from the last quoted market price for the security. >Repurchase agreements The Funds may engage in repurchase agreement transactions. The Funds, through their custodians, receive delivery of underlying securities collateralizing repurchase agreements. The Funds' investment advisor determines that the 1-800-922-6769 64 value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Foreign currency translations Values of investments denominated in foreign currencies are converted into U.S. dollars using the spot market rate of exchange at the time of valuation. Purchases and sales of investments and dividend and interest income are translated into U.S. dollars using the spot market rate of exchange prevailing on the respective dates of such transactions. The gain or loss resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate. >Security transactions and investment income Security transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Funds. Interest income is recorded on the accrual basis and includes amortization of discounts on short-term debt obligations and long-term debt obligations when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost. If the Funds no longer own the applicable securities, the proceeds are recorded as realized gains. The Funds estimate components of distributions from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of the cost of the related investments. Results of operations for the year reflect a change in estimate of these components using more current tax reporting received from REIT investments. The change in estimate had no impact on each of the Fund's net assets. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Financial instruments Each Fund may purchase or sell exchange-traded financial futures contracts, which are contracts that obligate that Fund to make or take delivery of a financial instrument or the cash value of a securities index at a specified future date at a specified price. The Funds enter into such contracts to hedge a portion of their portfolio. Gains and losses are reflected as "Net Realized Gain (Loss) on Futures" in the Statements of Operations. Additionally, each Fund, except for Columbia Acorn USA and Columbia Acorn Select, may engage in portfolio hedging with respect to changes in foreign currency exchange rates by entering into forward foreign currency contracts to purchase or sell foreign currencies. The Statements of Operations reflect gains and losses as realized for closed forward foreign currency contracts and unrealized for open contracts. The Funds bear the market risk that arises from changes in the value of financial instruments and securities indices (futures contracts) or from changes in foreign currency rates (forward foreign currency contracts) and the credit risk should a counterparty fail to perform under such contracts. None of the Funds entered into any futures contracts or forward foreign currency contracts during the six months ended June 30, 2004. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than the Class A, Class B and Class C 12b-1 service and distribution fees, and Class A, Class B, Class C and Class Z shares Transfer Agent fees) and realized and unrealized gains (losses) of a fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. Redemption fees are allocated to paid-in-capital of each class proportionately for the purposes of determining net asset value of each class. >Custody fees Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. >Federal income taxes The Funds have complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distribute all their taxable income, as well as any net realized gain on sales of investments and foreign currency transactions 65 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Foreign capital gains taxes Realized gains in certain countries may be subject to foreign taxes at the fund level, at rates ranging from approximately 10% to 30%. The Funds accrue for such foreign taxes on net realized and unrealized gains at the appropriate rate for each jurisdiction. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. Federal Tax Information The tax character of distributions paid during the year ended December 31, 2003 was as follows: LONG- TERM ORDINARY CAPITAL DECEMBER 31, 2003 INCOME GAINS ---------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ -- $ 9,917 Columbia Acorn International 5,935 -- Columbia Acorn USA -- -- Columbia Acorn International Select 19 -- Columbia Acorn Select 736 3,445 For the year ended December 31, 2003, the following capital loss carryforwards are available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: YEAR OF COLUMBIA ACORN COLUMBIA ACORN EXPIRATION INTERNATIONAL USA ---------------------------------------------------------------------------- (IN THOUSANDS) 2009 $ 111,479 $ 3,035 2010 76,335 10,064 2011 48,476 -- ---------------------------------------------------------------------------- TOTAL $ 236,290 $ 13,099 COLUMBIA ACORN YEAR OF INTERNATIONAL EXPIRATION SELECT ---------------------------------------------------------------------------- (IN THOUSANDS) 2009 $ 23,084 2010 12,528 2011 2,488 ---------------------------------------------------------------------------- TOTAL $ 38,100 Columbia Acorn Fund and Columbia Acorn International have elected to mark-to-market their investments in Passive Foreign Investment Companies ("PFIC's") for federal income tax purposes. Gains and losses relating to PFIC's are treated as ordinary income for federal income tax purposes. A summary of transactions relating to PFIC's is as follows (in thousands): COLUMBIA ACORN FUND ---------------------------------------------------------------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 409 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 -- Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (409) ----------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ -- ----------- COLUMBIA ACORN INTERNATIONAL ---------------------------------------------------------------------------- Cumulative unrealized appreciation on PFIC's recognized in prior years at December 31, 2002 $ 7,225 Unrealized appreciation (depreciation) on PFIC's recognized for federal income tax purposes during 2003 1,215 Unrealized appreciation recognized in prior years on PFIC's sold during 2003 (7,225) ----------- Cumulative unrealized appreciation on PFIC's carried forward at December 31, 2003 $ 1,215 ----------- 4. Transactions with Affiliates Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes continuing investment supervision to the Funds and is responsible for the overall management of the Funds' business affairs. Prior to April 1, 2004, Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA. Under the Funds' investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rates shown in the table below for each fund. COLUMBIA ACORN FUND ---------------------------------------------------------------------------- Net asset value: On the first $700 million 0.75% Next $1.3 billion 0.70% Net assets in excess of $2 billion 0.65% 1-800-922-6769 66 COLUMBIA ACORN INTERNATIONAL ---------------------------------------------------------------------------- Net asset value: On the first $100 million 1.20% Next $400 million 0.95% Net assets in excess of $500 million 0.75% COLUMBIA ACORN USA ---------------------------------------------------------------------------- Net asset value: On the first $200 million 0.95% Net assets in excess of $200 million 0.90% COLUMBIA ACORN INTERNATIONAL SELECT ---------------------------------------------------------------------------- On average daily net assets: 0.95% COLUMBIA ACORN SELECT ---------------------------------------------------------------------------- On average daily net assets: 0.90% Effective August 1, 2004: Net asset value: On the first $700 million 0.90% Net assets in excess of $700 million 0.85% >Expense Limit Columbia WAM has voluntarily agreed to reimburse the ordinary operating expenses (exclusive of interest, taxes and extraordinary expenses, if any) exceeding 1.45% of the average annual net assets for Columbia Acorn International Select Class Z shares and 1.35% of the average annual net assets for Columbia Acorn Select Class Z shares. Columbia WAM also provides administrative services to each Fund at an annual rate of 0.05% of average daily net assets. Effective August 1, 2004 Columbia WAM will receive an administration fee from the Funds, based on the average daily net assets of the Trust, at the following annual rates: COLUMBIA ACORN TRUST ---------------------------------------------------------------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net assets in excess of $16 billion 0.03% Columbia Funds Distributor, Inc. ("CFDI"), an indirect wholly-owned subsidiary of BOA, is the Fund's principal underwriter and receives no compensation on the sale of Class Z shares. Each Fund has adopted a 12b-1 plan which requires it to pay CFDI a service and distribution fee on the net assets attributable to Class A, Class B and Class C shares. Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly-owned subsidiary of BOA, provides shareholder services to the Funds and receives account charges plus reimbursement for out of pocket expenses. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses paid by the Funds for the six months ended June 30, 2004 were as follows, including each Fund's portion of a special payment to the chairman of the board of $25,000 for extraordinary time and effort spent on board matters during 2003: ---------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $209 Columbia Acorn International 34 Columbia Acorn USA 13 Columbia Acorn International Select 3 Columbia Acorn Select 8 ============================================================================ The Trust provides a deferred compensation plan for its trustees. Under that plan, a trustee may elect to defer all or a portion of his or her compensation. Amounts deferred are retained by the Trust and represent an unfunded obligation of the Trust. The value of amounts deferred is determined by reference to the change in value of Class Z shares of one or more series of the Trust or a money market fund as specified by the trustee. Benefits under the deferred compensation plan are payable upon retirement. An affiliate may include any company in which a fund owns five percent or more of its outstanding voting securities. On June 30, 2004, Columbia Acorn Fund and Columbia Acorn USA each held five percent or more of the outstanding voting securities of one or more companies. Details of investments in those affiliated companies are presented on pages 31 and 45, respectively. During the six months ended June 30, 2004, the Funds engaged in purchase and sale transactions with funds that have a common investment advisor (or affiliated investment advisors), common Directors/Trustees, and/or common Officers. Those transactions complied with Rule 17a-7 under the Investment Company Act of 1940 and were as follows: FUNDS PURCHASES SALES ----------------------------------- ----------- --------- (IN THOUSANDS) Columbia Acorn Fund $ 27,980 $ 741 Columbia Acorn International 3,657 13,528 Columbia Acorn USA -- 1,111 Columbia Acorn International Select 608 4,794 Columbia Acorn Select -- -- 67 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the six months ended June 30, 2004. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2004 were: COLUMBIA ACORN FUND ---------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $1,694,313 Proceeds from sales 1,235,992 ============================================================================ COLUMBIA ACORN INTERNATIONAL ---------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $414,826 Proceeds from sales 486,377 ============================================================================ COLUMBIA ACORN USA ---------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $74,090 Proceeds from sales 78,807 ============================================================================ COLUMBIA ACORN INTERNATIONAL SELECT ---------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $19,664 Proceeds from sales 20,833 ============================================================================ COLUMBIA ACORN SELECT ---------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $296,012 Proceeds from sales 153,883 ============================================================================ 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General (the "NYAG") and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include CFDI, Columbia Management Advisors, Inc. ("CMA"), and Columbia WAM. CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where any of its affiliates were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the SEC filed a civil complaint in the United States District Court for the District of Massachusetts against CFDI and CMA, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the NYAG filed a civil complaint in New York Supreme Court, County of New York against CFDI and CMA alleging that CFDI and CMA had violated certain New York anti-fraud statutes. Both complaints are based on arrangements between 1998 and 2003 with nine investors for the trading of mutual fund shares. Neither complaint was filed against Columbia WAM nor the Columbia Acorn Family of Funds. However, the complaints against CFDI and CMA identified Columbia Acorn Fund, Columbia Acorn International and Columbia Acorn International Select as funds in which one or more of the nine investors invested. If either CFDI or CMA were unsuccessful in its defense of those proceedings, it could be barred from serving as a distributor or investment adviser for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"), which could prevent CFDI from serving as the Funds' distributor and could affect the ability of an affiliated person of CFDI or CMA to serve as a distributor or investment adviser for any registered investment company. The Funds have been informed by CFDI that, in such a situation, it will seek exemptive relief from the SEC to permit it to continue to serve as the Funds' distributor. There is no assurance that such exemptive relief would be granted. On March 15, 2004, CFDI and CMA entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, CFDI and CMA agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring CFDI and CMA to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and fiduciary duties; and retention of an independent consultant to review CFDI's and CMA's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, Columbia has agreed to reduce mutual fund fees by $80 million over a five-year period. 1-800-922-6769 68 The Trust and Columbia WAM are defendants in several derivative and class action lawsuits that allege, in summary, defendants permitted investors to engage in improper trading of shares of various funds in violation of certain federal and state laws. The Trust and Columbia WAM are also defendants in a class action lawsuit that alleges, in summary, that the Trust and Columbia WAM exposed shareholders of Columbia Acorn International Fund to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of that Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement the Fund's portfolio valuation and share pricing policies and procedures; and (c) failing to know and implement applicable rules and regulations concerning the calculation of NAV (the "Fair Valuation Lawsuit"). All of these lawsuits have been transferred to a federal court in Maryland, where they will be consolidated with similar suits in a Multi-District Litigation proceeding. The Trust and Columbia WAM are defendants in a class action lawsuit in Illinois state court similar to the Fair Valuation Lawsuit. Lastly, Columbia WAM is also defendant in a lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments to brokers as an incentive for the brokers to market the Funds over other mutual funds to investors. The complaint alleges Columbia WAM breached certain common law duties and federal laws. The Trust and Columbia WAM intend to defend these suits vigorously. The Trust does not believe that the pending actions will have a material adverse effect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse effect on its ability to perform under its contracts with the Funds. 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. In connection with the events described in detail above, various parties have filed suit against certain funds, their Boards and/or Fleet (and affiliated entities). These suits and certain regulatory investigations are ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. For the six months ended June 30, 2004, CMG has assumed consulting services and fees incurred by the Funds in connection with these matters as follows: ---------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 135 Columbia Acorn International 20 Columbia Acorn USA 8 Columbia Acorn International Select 1 Columbia Acorn Select 10 ============================================================================ 69 COLUMBIA THERMOSTAT FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2004 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- >BOND FUNDS: 49.8% 5,107 Columbia Intermediate Bond Fund, Class Z $45,657 2,604 Columbia Federal Securities Fund, Class Z 27,416 2,146 Columbia High Yield Fund, Class Z 18,221 ---------------------------------------------------------------------------- TOTAL BOND FUNDS (COST: $92,408) 91,294 >STOCK FUNDS: 49.7% 2,519 Columbia Growth Stock Fund, Class Z (b) 22,745 1,345 Columbia Growth & Income Fund, Class Z 22,736 746 Columbia Acorn Fund, Class Z 18,320 525 Columbia Mid-Cap Value Fund, Class Z (b) 13,694 699 Columbia Acorn Select, Class Z (b) 13,670 ---------------------------------------------------------------------------- TOTAL STOCK FUNDS (COST: $78,577) 91,165 >SHORT-TERM OBLIGATIONS: 0.5% $ 1,008 Repurchase Agreement with State Street Bank & Trust, Co. Dated 6/30/04, Due 7/01/04 at 1.30% Collateralized by Federal Home Loan Mortgage Corporation, Notes, Maturing 2/15/05, Market Value $1,031 (Repurchase proceeds: $1,008) 1,008 ---------------------------------------------------------------------------- (Cost: $1,008) 1,008 ----------- TOTAL INVESTMENTS: 100.0% 183,467 (Cost: $171,993) (a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.0%) (55) ----------- TOTAL NET ASSETS: 100% $183,412 ============================================================================ >Notes to Statement of Investments (in thousands) (a) At June 30, 2004, for federal income tax purposes cost of investments was the same and net unrealized appreciation was $11,474 consisting of gross unrealized appreciation of $12,704 and gross unrealized depreciation of $1,230. 1-800-922-6769 70 COLUMBIA THERMOSTAT FUND >STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2004 ------------------------------------------------------------------------------ (IN THOUSANDS) ASSETS Investments, at value (cost: $171,993) $183,467 Receivable for: Investments sold 463 Fund shares sold 1,023 Dividends and interest 347 Expense reimbursement due from Advisor 30 Other Assets 3 ---------------- Total Assets 185,333 LIABILITIES Payable for: Investments purchased 789 Fund shares redeemed 991 Transfer agent fees 16 Custody fees 4 Registration & blue sky fees 14 12b-1 Service & Distribution fees 100 Legal & audit fees 7 ---------------- Total Liabilities 1,921 ---------------- NET ASSETS $183,412 ================ COMPOSITION OF NET ASSETS Paid in capital $170,738 Undistributed net investment income 1,244 Accumulated net realized loss (44) Net unrealized appreciation on investments 11,474 ---------------- NET ASSETS $183,412 ================ Net asset value per share -- Class A (a) $12.61 (Net assets/shares) ($67,687/5,370) Maximum offering price per share -- Class A (b) $13.38 (Net asset value per share/front-end sales charge) ($12.61/0.9425) Net asset value and offering price per share -- Class B (a) $12.58 (Net assets/shares) ($69,753/5,543) Net asset value and offering price per share -- Class C (a) $12.58 (Net assets/shares) ($28,944/2,300) Net asset value, offering and redemption price per share -- Class Z $12.63 (Net assets/shares) ($17,028/1,348) (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. 71 COLUMBIA THERMOSTAT FUND >STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2004 (IN THOUSANDS) ------------------------------------------------------------------------------ INVESTMENT INCOME: Dividends from investment company shares $ 1,947 Interest income 5 ------- Total Investment Income 1,952 EXPENSES: Management fee 80 Administration fee 40 12b-1 Service and Distribution fees: Class A 98 Class B 312 Class C 127 Transfer agent fees: Class A 46 Class B 70 Class C 25 Class Z 15 Trustees fees 1 Custody fees 12 Registration & blue sky fees 59 Legal & audit fees 14 Non-recurring costs (See Note 7) 2 Other expenses 27 ------- Total expenses 928 Less custody fees paid indirectly --* Less fees waived by Distributor (28) Less reimbursement of expenses by Advisor (190) Non-recurring costs reimbursed (See Note 7) (2) ------- Net Expenses 708 ------- Net Investment Income 1,244 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on: Investments (28) Distributions from investment company shares 23 ------- Net realized loss (5) ------- Net change in net unrealized appreciation on investments 2,195 ------- Net realized and unrealized gain 2,190 ------- Net Increase in Net Assets resulting from Operations $ 3,434 ======= *Rounds to less than $500. See accompanying notes to financial statements. 1-800-922-6769 72 COLUMBIA THERMOSTAT FUND >STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED INCREASE IN NET ASSETS JUNE 30, DECEMBER 31, ---------------------- ----------- ------------ (IN THOUSANDS) 2004 2003 (a) OPERATIONS: Net investment income $1,244 $696 Net realized gain (loss) on investments and distributions from investment company shares (5) 272 Net change in net unrealized appreciation on investments 2,195 9,219 ----------- ------------ Net Increase from Operations 3,434 10,187 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- (395) Net realized gain -- Class A (89) (21) Net investment income -- Class B -- (108) Net realized gain -- Class B (94) (30) Net investment income -- Class C -- (43) Net realized gain -- Class C (40) (10) Net investment income -- Class Z -- (160) Net realized gain -- Class Z (22) (14) ----------- ------------ Total Distributions to Shareholders (245) (781) SHARE TRANSACTIONS: Subscriptions -- Class A 27,577 40,815 Distributions reinvested -- Class A 80 373 Redemptions -- Class A (3,455) (1,441) ----------- ------------ Net Increase -- Class A 24,202 39,747 Subscriptions -- Class B 20,217 48,741 Distributions reinvested -- Class B 86 125 Redemptions -- Class B (3,207) (1,176) ----------- ------------ Net Increase -- Class B 17,096 47,690 Subscriptions -- Class C 9,956 19,668 Distributions reinvested -- Class C 34 44 Redemptions -- Class C (1,584) (1,015) ----------- ------------ Net Increase -- Class C 8,406 18,697 Subscriptions -- Class Z 4,377 9,094 Distributions reinvested -- Class Z 22 166 Redemptions -- Class Z (1,809) (1,023) ----------- ------------ Net Increase -- Class Z 2,590 8,237 ----------- ------------ Net Increase from Share Transactions 52,294 114,371 ----------- ------------ Total Increase in Net Assets 55,483 123,777 ----------- ------------ NET ASSETS: Beginning of period 127,929 4,152 ----------- ------------ End of period $183,412 $127,929 =========== ============ UNDISTRIBUTED NET INVESTMENT INCOME $1,244 $-- =========== ============
(a) Class A, Class B and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. See accompanying notes to financial statements 73 COLUMBIA THERMOSTAT FUND >STATEMENT OF CHANGES IN NET ASSETS, CONTINUED
(UNAUDITED) SIX MONTHS ENDED PERIOD ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, ----------------------------------------- ----------- ------------ (IN THOUSANDS) 2004 2003 (a) Subscriptions -- Class A 2,219 3,529 Shares issued in reinvestment and capital gains -- Class A 7 31 Less shares redeemed -- Class A (293) (123) ----------- ------------ Net increase -- Class A 1,933 3,437 Subscriptions -- Class B 1,614 4,268 Shares issued in reinvestment and capital gains -- Class B 7 10 Less shares redeemed -- Class B (257) (99) ----------- ------------ Net increase -- Class B 1,364 4,179 Subscriptions -- Class C 793 1,712 Shares issued in reinvestment and capital gains -- Class C 3 4 Less shares redeemed -- Class C (127) (85) ----------- ------------ Net increase -- Class C 669 1,631 Subscriptions -- Class Z 349 821 Shares issued in reinvestment and capital gains -- Class Z 2 14 Less shares redeemed -- Class Z (146) (91) ----------- ------------ Net increase -- Class Z 205 744 ----------- ------------ Net increase in Shares of Beneficial Interest 4,171 9,991 ----------- ------------
(a) Class A, Class B and Class D commenced operations March 3, 2003. On October 13, 2003, Class D was redesignated Class C. See accompanying notes to financial statements 1-800-922-6769 74 COLUMBIA THERMOSTAT FUND >FINANCIAL HIGHLIGHTS
(UNAUDITED) INCEPTION SIX MONTHS SEPTEMBER 25, ENDED YEAR ENDED 2002 THROUGH CLASS Z JUNE 30, DECEMBER 31, DECEMBER 31, ------- ----------- ------------ ------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2004 2003 2002 NET ASSET VALUE, BEGINNING OF PERIOD $12.31 $10.41 $10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.14 0.19 0.04 Net realized and unrealized gain 0.20 1.87 0.37 ----------- ------------ ------------- Total from Investment Operations 0.34 2.06 0.41 ----------- ------------ ------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.16) -- From net realized gains (0.02) 0.00(b) -- ----------- ------------ ------------- Total Distributions Declared to Shareholders (0.02) (0.16) -- ----------- ------------ ------------- NET ASSET VALUE, END OF PERIOD $12.63 $12.31 $10.41 =========== ============ ============= Total Return (c)(d) 2.74%(e) 19.79% 4.10%(e) =========== ============ ============= RATIOS TO AVERAGE NET ASSETS Expenses (f) 0.25%(g)(h) 0.38%(g) 0.62%(h)(i) Net investment income 2.19%(g)(h) 1.64%(g) 1.41%(h)(i) Reimbursement 0.22%(h) 0.88% 19.94%(h) Portfolio turnover rate 32%(e) 61% 11%(e) Net assets at end of period (IN MILLIONS) $17 $14 $4
(a) Per share data was calculated using average shares outstanding during the period. Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. (b) Rounds to less than $0.01 per share. (c) Total return at net asset value assuming all distributions reinvested. (d) Had the Advisor not reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) Does not include expenses of the investment companies in which the Fund invests. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. (i) In accordance with a requirement of the Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances it maintains with the custodian ("custody fees paid indirectly"). The ratios of expenses to average daily net assets and net investment income to average daily net assets net of custody fees paid indirectly would have been 0.60% and 1.43%, respectively for the period ended December 31, 2002. See accompanying notes to financial statements 75 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust, commenced operations September 25, 2002. The Fund may issue an unlimited number of shares. The Fund currently offers four classes of shares: Class A, Class B, Class C and Class Z. On October 13, 2003, Class D was redesignated Class C. Class A shares are sold with a front-end sales charge. A contingent deferred sales charge ("CDSC") may be assessed to Class A shares purchased without an initial sales charge on redemptions made within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a CDSC. Class B shares will convert to Class A shares in three, four or eight years after purchase, depending on the program under which shares are purchased. Class C shares are subject to a CDSC on redemptions made 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. The financial highlights for Class A, Class B and Class C shares are presented in a separate semi-annual report. The semi-annual report for the other series of the Trust is also included in this report. The investment objective of the Fund is to provide long-term total return. The Fund pursues its investment objective by investing in shares of other mutual funds. As a 'fund of funds', under normal circumstances, the Fund allocates at least 95% of its net assets among a selected group of stock and bond mutual funds (the "Portfolio Funds") according to the current level of the Standard & Poor's 500 Stock Index in relation to predetermined ranges set by the Fund's investment adviser. As of June 30, 2004, the Fund invested in five stock Portfolio Funds (Columbia Acorn Fund, Columbia Acorn Select Fund, Columbia Growth & Income Fund, Columbia Mid Cap Value Fund and Columbia Growth Stock Fund) and three bond Portfolio Funds (Columbia Federal Securities Fund, Columbia Intermediate Bond Fund and Columbia High Yield Fund). The Fund may also invest up to 5% of its net assets plus any cash received that day in cash, repurchase agreements, high quality short-term paper and government securities. 2. Significant Accounting Policies >Security valuation Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. High quality short-term paper and government securities having a maturity of 60 days or less from the valuation date are valued on an amortized cost basis, which approximates fair value. >Repurchase agreements The Fund may engage in repurchase agreement transactions. The Fund, through its custodian, receives delivery of underlying securities collateralizing each repurchase agreement. The Fund's investment advisor determines that the value of the underlying securities is at all times at least equal to the resale price. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. >Security transactions and investment income Portfolio Fund transactions are accounted for on the trade date (date the order to buy or sell is executed). Dividend income and realized gain distributions from other funds are recorded on the ex-dividend date. Interest income is recorded on the accrual basis and includes amortization of discounts on short-term debt obligations when required for federal income tax purposes. Realized gains and losses from security transactions are reported on an identified cost basis. Awards from class action litigation may be recorded as a reduction of cost by Portfolio Funds. If the Portfolio Fund no longer owns the applicable securities, the proceeds are recorded as realized gains. >Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. >Fund share valuation Fund shares are sold and redeemed on a continuing basis at net asset value. Net asset value per share is determined daily as of the close of trading on the New York Stock Exchange on each day the Exchange is open for trading. All income, expenses (other than the Class A, Class B and Class C 12b-1 service and distribution fees, and Class A, Class B, Class C and Class Z Transfer Agent fees) and 1-800-922-6769 76 realized and unrealized gains (losses) of the Fund are allocated to each class proportionately on a daily basis for purposes of determining the net asset value of each class. >Custody fees The custody fees are reduced based on the Fund's cash balance maintained with the custodian. The amount is disclosed as a reduction of total expenses in the Statement of Operations. >Federal income taxes The Fund has complied with the special provisions of the Internal Revenue Code available to regulated investment companies and, in the manner provided therein, distributes all of its taxable income, as well as any net realized gain on sales of Portfolio Fund shares and any distributions of net realized gains received by the Fund from its Portfolio Funds, reportable for federal income tax purposes. Accordingly, the Fund paid no federal income taxes and no federal income tax provision was required. >Distributions to Shareholders Distributions to shareholders are recorded on the ex-date. 3. Federal Tax Information The tax character of distributions paid during the year ended December 31, 2003 was as follows: ORDINARY LONG-TERM INCOME CAPITAL GAINS ------------------------------------------------------- (IN THOUSANDS) $ 771 $ 10 4. Transactions with Affiliates Columbia Wanger Asset Management, L.P. ("Columbia WAM"), an indirect wholly-owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly-owned subsidiary of Bank of America Corporation ("BOA"), furnishes continuing investment supervision to the Fund and is responsible for the overall management of the Fund's business affairs. Prior to April 1, 2004, Columbia Management Group, Inc. was a wholly-owned subsidiary of Fleet National Bank, which in turn was a wholly-owned subsidiary of FleetBoston Financial Corporation ("Fleet"). On April 1, 2004, Fleet was acquired by BOA. Under the Fund's investment management agreement, fees are accrued daily and paid monthly to Columbia WAM at the annual rate of 0.10% of the Fund's average daily net assets. >Expense Limit Columbia WAM has agreed to voluntarily reimburse the direct operating expenses (exclusive of interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.60% of the average annual net assets of the Fund's Class Z shares. Effective August 1, 2003, Columbia WAM agreed to contractually reimburse the direct operating expenses (exclusive of interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) exceeding 0.25% of the average annual net assets of the Fund's Class Z shares. Columbia WAM also provides administrative services to the Fund at an annual rate of 0.05% of average daily net assets. Effective August 1, 2004 Columbia WAM will receive an administration fee from the Fund, based on the average daily total net assets of the Trust, at the following annual rates: COLUMBIA ACORN TRUST ------------------------------------------------------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net assets in excess of $16 billion 0.03% Columbia Funds Distributor, Inc. ("CFDI"), an indirect wholly-owned subsidiary of BOA, is the Fund's principal indirect underwriter and receives no compensation on the sale of Class Z shares. The Fund has adopted a 12b-1 plan which requires it to pay CFDI a service and/or distribution fee on net assets attributable to Class A, Class B and Class C shares. Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly-owned subsidiary of BOA, provides shareholder services to the Fund and receives account charges plus reimbursement for out of pocket expenses. Certain officers and trustees of the Trust are also officers of Columbia WAM. The Trust makes no direct payments 77 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED to its officers and trustees who are affiliated with Columbia WAM. Trustees' fees and expenses paid by the Fund for the six months ended June 30, 2004, including the Fund's portion of a special payment to the chairman of the board of $25,000 for extraordinary time and effort spent on board matters during 2003, were $1,240. 5. Borrowing Arrangements The Trust participates in a $150,000,000 credit facility, which was entered into to facilitate portfolio liquidity. No amounts have been borrowed under this facility for the six months ended June 30, 2004. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2004 were: ---------------------------------------------------------------------------- (IN THOUSANDS) Purchases $103,922 Proceeds from sales $50,510 ============================================================================ 7. Legal Proceedings The Securities and Exchange Commission (the "SEC"), the New York Attorney General (the "NYAG") and various other regulatory authorities are investigating late trading and market timing in mutual fund shares, and have sent information requests and subpoenas to certain affiliates of Columbia Management Group, Inc. ("CMG") (collectively, "Columbia"). These affiliates include CFDI, Columbia Management Advisors, Inc. ("CMA"), and Columbia WAM. CMA is the adviser to the Columbia Family of Funds, but is not the adviser to the Columbia Acorn Family of Funds. Columbia has not uncovered any instances where any of its affiliates were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the SEC filed a civil complaint in the United States District Court for the District of Massachusetts against CFDI and CMA, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the NYAG filed a civil complaint in New York Supreme Court, County of New York against CFDI and CMA alleging that CFDI and CMA had violated certain New York anti-fraud statutes. Both complaints are based on arrangements between 1998 and 2003 with nine investors for the trading of mutual fund shares. Neither complaint was filed against Columbia WAM nor the Columbia Acorn Family of Funds. However, the complaints against CFDI and CMA identified Columbia Acorn Fund, Columbia Acorn International and Columbia Acorn International Select as funds in which one or more of the nine investors invested. If either CFDI or CMA were unsuccessful in its defense of those proceedings, it could be barred from serving as a distributor or investment adviser for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"), which could prevent CFDI from serving as the Funds' distributor and could affect the ability of an affiliated person of CFDI or CMA to serve as a distributor or investment adviser for any registered investment company. The Funds have been informed by CFDI that, in such a situation, it will seek exemptive relief from the SEC to permit it to continue to serve as the Funds' distributor. There is no assurance that such exemptive relief would be granted. On March 15, 2004, CFDI and CMA entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, CFDI and CMA agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring CFDI and CMA to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and fiduciary duties; and retention of an independent consultant to review CFDI's and CMA's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, Columbia has agreed to reduce mutual fund fees by $80 million over a five-year period. The Trust and Columbia WAM are defendants in several derivative and class action lawsuits that allege, in summary, defendants permitted investors to engage in improper trading of shares of various funds in violation of certain federal 1-800-922-6769 78 and state laws. The Trust and Columbia WAM are also defendants in a class action lawsuit that alleges, in summary, that the Trust and Columbia WAM exposed shareholders of Columbia Acorn International Fund to trading by market timers by allegedly (a) failing to properly evaluate daily whether a significant event affecting the value of that Fund's securities had occurred after foreign markets had closed but before the calculation of the Fund's net asset value ("NAV"); (b) failing to implement the Fund's portfolio valuation and share pricing policies and procedures; and (c) failing to know and implement applicable rules and regulations concerning the calculation of NAV (the "Fair Valuation Lawsuit"). All of these lawsuits have been transferred to a federal court in Maryland, where they will be consolidated with similar suits in a Multi-District Litigation proceeding. The Trust and Columbia WAM are defendants in a class action lawsuit in Illinois state court similar to the Fair Valuation Lawsuit. Lastly, Columbia WAM is also defendant in a lawsuit alleging that Columbia WAM used Fund assets to make undisclosed payments to brokers as an incentive for the brokers to market the Funds over other mutual funds to investors. The complaint alleges Columbia WAM breached certain common law duties and federal laws. The Trust and Columbia WAM intend to defend these suits vigorously. The Trust does not believe that the pending actions will have a material adverse effect on the financial statements of any Fund, and Columbia WAM does not believe that the pending actions will have a material adverse effect on its ability to perform under its contracts with the Funds. 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 Fund. In connection with the events described in detail above, various parties have filed suit against certain funds, their Boards and/or Fleet (and affiliated entities). These suits and certain regulatory investigations are ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. For the six months ended June 30, 2004, CMG has assumed $1,830 consulting services and fees incurred by the Fund in connection with these matters. 79 CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Effective April 13, 2004, the audit committee of the Trust requested that Ernst & Young LLP ("E&Y") resign as the auditors of the Funds. Also effective July 14, 2004, upon the recommendation of the audit committee, the Trust selected PricewaterhouseCoopers LLP ("PWC") as independent registered public accounting firm to audit the books and records of each Fund for its fiscal year ending December 31, 2004. The cessation of the relationship with E&Y was based on the impairment of E&Y's independence resulting from the consummation of the merger of FleetBoston Financial Corporation and Bank of America Corporation and accordingly, E&Y's ability to provide audit services to the Funds. E&Y's report on the financial statements of each Fund for the past two years did not contain an adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period E&Y was engaged, there were no disagreements with E&Y on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to E&Y's satisfaction, would have caused it to make reference to that matter in connection with its report. 1-800-922-6769 80 COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARE INFORMATION MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN INTERNATIONAL SELECT, COLUMBIA ACORN SELECT, COLUMBIA THERMOSTAT FUND $1,000 $1,000 FOR AN IRA COLUMBIA ACORN FUND ACRNX Management Fee 0.66% 12b-1 Fee None Other Expenses 0.13% ------- Expense Ratio 0.79% COLUMBIA ACORN INTERNATIONAL ACINX Management Fee 0.82% 12b-1 Fee None Other Expenses 0.21% ------- Expense Ratio 1.03% COLUMBIA ACORN USA AUSAX Management Fee 0.91% 12b-1 Fee None Other Expenses 0.15% ------- Expense Ratio 1.06% MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN FUND AND COLUMBIA ACORN USA $50,000 MINIMUM SUBSEQUENT INVESTMENT $50 EXCHANGE FEE NONE COLUMBIA ACORN INTERNATIONAL SELECT ACFFX Management Fee 0.95% 12b-1 Fee None Other Expenses 0.50% ------- Net Expense Ratio 1.45% COLUMBIA ACORN SELECT ACTWX Management Fee 0.90% 12b-1 Fee None Other Expenses 0.20% ------- Expense Ratio 1.10% COLUMBIA THERMOSTAT FUND COTZX Management Fee 0.10% 12b-1 Fee None Other Expenses 0.15% ------- Net Expense Ratio 0.25%* Fees and expenses are for the six months ended June 30, 2004 and for Columbia Acorn International Select and Columbia Thermostat Fund include the effect of Columbia Wanger Asset Management's undertaking to reimburse those funds for any ordinary operating expenses, net of custody fees paid indirectly, exceeding 1.45% and 0.25% of their average net assets, respectively. The expense limitation for Columbia Acorn International Select is voluntary and can be terminated by either the Fund or Columbia Wanger Asset Management, L.P. on 30 days' notice. Columbia Thermostat Fund's reimbursement arrangement is contractual through April 30, 2005. The Fund's adviser and/or affiliates have contractually agreed to waive a portion of "other expenses" through April 30, 2005. *Does not include estimated fees and expenses of 0.94% incurred by the Fund from the underlying portfolio funds. 81 This page intentionally left blank. This page intentionally left blank. COLUMBIA ACORN -------------------------------------------------------------------------------- FAMILY OF FUNDS TRUSTEES Robert E. Nason CHAIRMAN Margaret Eisen Leo A. Guthart Jerome Kahn, Jr. Steven N. Kaplan David C. Kleinman Charles P. McQuaid Allan B. Muchin Ralph Wanger John A. Wing OFFICERS Charles P. McQuaid PRESIDENT Ben Andrews VICE PRESIDENT Michael G. Clarke ASSISTANT TREASURER J. Kevin Connaughton ASSISTANT TREASURER P. Zachary Egan VICE PRESIDENT Kenneth A. Kalina ASSISTANT TREASURER Bruce H. Lauer VICE PRESIDENT, SECRETARY AND TREASURER Louis J. Mendes VICE PRESIDENT Robert A. Mohn VICE PRESIDENT Todd M. Narter VICE PRESIDENT Christopher J. Olson VICE PRESIDENT Vincent P. Pietropaolo ASSISTANT SECRETARY Robert P. Scales CHIEF COMPLIANCE OFFICER, VICE PRESIDENT GENERAL COUNSEL AND CHIEF LEGAL OFFICER INVESTMENT ADVISER Columbia Wanger Asset Management, L.P. 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606 1-800-922-6769 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston, Massachusetts 02111-2621 TRANSFER AGENT, DIVIDEND DISBURSING AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston, Massachusetts 02266-8081 1-800-345-6611 LEGAL COUNSEL Bell, Boyd & Lloyd LLC Chicago, Illinois THIS REPORT, INCLUDING THE SCHEDULES OF INVESTMENTS, IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF COLUMBIA ACORN TRUST. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS. AN INVESTOR SHOULD CAREFULLY CONSIDER CHARGES AND EXPENSES BEFORE INVESTING. TO OBTAIN A PROSPECTUS CONTAINING THIS AND OTHER INFORMATION, PLEASE CALL (800) 922-6769 OR VISIT OUR WEBSITE (SHOWN BELOW). PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR SEND MONEY. A DESCRIPTION OF THE POLICIES AND PROCEDURES THAT THE FUNDS USE TO DETERMINE HOW TO VOTE PROXIES RELATING TO THEIR PORTFOLIO SECURITIES IS AVAILABLE (I) WITHOUT CHARGE, UPON REQUEST, BY CALLING 800-922-6769 AND (II) ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT http://www.sec.gov. FIND OUT WHAT'S NEW - VISIT OUR WEB SITE AT: www.columbiafunds.com OUR E-MAIL ADDRESS IS: serviceinquiries@columbiamanagement.com SHAREHOLDERS SHOULD NOT INCLUDE PERSONAL INFORMATION SUCH AS ACCOUNT NUMBERS, SOCIAL SECURITY NUMBERS OR TAXPAYER IDENTIFICATION NUMBERS IN E-MAIL. WE ARE UNABLE TO ACCEPT ACCOUNT TRANSACTIONS SENT VIA E-MAIL. 1-800-922-6769 84 DIRECTIONS TO THE 2004 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING FROM THE SOUTH: Take 1-57 (which merges with I-94, also known as the Dan Ryan Expressway). Take the Dan Ryan into Chicago. Follow the signs for the Kennedy (I-90/94) Expressway West. Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east to LaSalle Street and turn right (south). FROM THE NORTH: Take the Kennedy Expressway (I-90/94) south to Chicago. Exit at Jackson Boulevard. Turn left (east) from the exit onto Jackson Boulevard. Proceed east on Jackson to LaSalle Street. FROM THE WEST: Take the Eisenhower Expressway (I-290) from the west. This becomes Congress Parkway in the city. Bear right (south) off of Congress onto Franklin Street. Turn right (east) on Jackson Boulevard. Proceed east on Jackson to LaSalle Street. FROM THE SOUTHWEST: Take the Stevenson Expressway (I-55). Exit to the Kennedy Expressway (North-Wisconsin). Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east to LaSalle Street and turn right (south). PARKING INFORMATION There is no parking in the Bank of America Building but several public parking lots are located within two blocks of the building. The South Loop Self Park is located at 318 S. Federal Street. Traders Self Park is located at 326 S. Wells Street. Both lots are marked on the map on the inside front cover of this report. For directions using public transportation, call (312) 836-7000 for CTA travel information or visit the CTA website at www.transitchicago.com. For Metra information call (312) 322-6777 during business hours or find information at www.metrarail.com. Photo of: berries -------------------- PRESORTED FIRST-CLASS MAIL U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 -------------------- [EAGLE HEAD LOGO] COLUMBIAFUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 ACN-03/221S-0604 (8/04) 04/1812 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 Not applicable at this time. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant has not filed Schedule 14A subsequent to the effective date of that Schedule's Item 7(d)(2)(ii)(G). Although the registrant's investment adviser, Trustees, or shareholders may submit suggested candidates for Independent Trustees to the Governance Committee (the "Committee"), neither the Committee nor the Independent Trustees as a group shall consider those candidates on a preferential basis as opposed to other possible candidates. Any shareholders may submit the name of a candidate for consideration by the Committee by submitting the recommendation to the Trust's Secretary. The Secretary will forward any such recommendation to the Chairman of the Committee promptly upon receipt. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Acorn Trust ----------------------------------------------------------------- By (Signature and Title) /s/ Charles P. McQuaid ----------------------------------------------------- Charles P. McQuaid, President Date September 2, 2004 ------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ Charles P. McQuaid ----------------------------------------------------- Charles P. McQuaid, President Date September 2, 2004 ------------------------------------------------------------------------- By (Signature and Title) /s/ Bruce H. Lauer ----------------------------------------------------- Bruce H. Lauer, Treasurer Date September 2, 2004 -------------------------------------------------------------------------