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) One Financial Center, Boston, Massachusetts 02111 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Vincent Pietropaolo, Esq. Columbia Management Group, Inc. One Financial Center Boston, MA 02111 ------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 1-617-772-3698 Date of fiscal year end: 12/31/05 ------------------- Date of reporting period: 06/30/05 ------------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORTS TO STOCKHOLDERS. LOOK INSIDE FOR DETAILS ON THE 2005 COLUMBIA ACORN FUNDS ANNUAL SHAREHOLDER INFORMATION MEETING. [PHOTO OF ACORNS] COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARES SEMIANNUAL REPORT JUNE 30, 2005 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 AT THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING |_| September 27, 2005 9 a.m. - 10 a.m. Central time, immediately following the special meeting of shareholders |_| Bank One Auditorium, Plaza Level 38 South Dearborn Street Chicago, IL 60602 REFRESHMENTS WILL BE SERVED. |_| PLEASE RSVP BY SEPTEMBER 20 BY CALLING 800-922-6769 DIRECTIONS TO THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING The Bank One Auditorium is located on the Plaza Level of the Bank One building. The Bank One building is located in the center of the Loop, bordered by Dearborn Street on the east, Madison Street on the north, Clark Street on the west and Monroe Street on the south. 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 Expressway West. Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn. FROM THE NORTH: Take the Kennedy Expressway (I-90/94) south to Chicago. Exit in the city at Monroe Street. Turn left (east) from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn. FROM THE WEST: Take the Eisenhower Expressway (I-290) from the west. This becomes Congress Street in the city. Take Congress east to Dearborn Street. Turn left (north) on Dearborn to Monroe 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 on Monroe Street to Dearborn. SEE BACK INSIDE PAGE FOR PARKING --> COLUMBIA ACORN FAMILY OF FUNDS SEMIANNUAL REPORT 2005 TABLE OF CONTENTS Columbia Acorn Family of Funds Performance At A Glance 2 Squirrel Chatter: Discipline and Creativity 3 Understanding Your Expenses 6 COLUMBIA ACORN FUND In a Nutshell 8 At a Glance 9 Major Portfolio Changes 20 Statement of Investments 22 COLUMBIA ACORN INTERNATIONAL In a Nutshell 10 At a Glance 11 Major Portfolio Changes 34 Statement of Investments 36 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 66 Columbia Acorn Family of Funds Information 83 Management Fee Evaluation of the Senior Officer 85 >2005 MID-YEAR DISTRIBUTIONS The following table details the funds' mid-year distributions. The record date for Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn Select, Columbia Acorn International Select, and Columbia Thermostat was June 6, 2005. The ex-dividend date was June 7, 2005, and the payable date was June 8, 2005.
Long-term Short-term Ordinary Reinvestment Capital Gains Capital Gains Income Price ------------------------------------------------------------------------------------------------------------------- Columbia Acorn Fund $0.3609 $0.0255 None $26.26 ------------------------------------------------------------------------------------------------------------------- Columbia Acorn International None None $0.4280 $29.20 ------------------------------------------------------------------------------------------------------------------- Columbia Acorn USA $0.3640 None None $25.64 ------------------------------------------------------------------------------------------------------------------- Columbia Acorn Select $0.0919 $0.0353 None $20.54 ------------------------------------------------------------------------------------------------------------------- Columbia Acorn International Select None None $0.2843 $17.79 ------------------------------------------------------------------------------------------------------------------- Columbia Thermostat Fund $0.0927 $0.1562 None $13.03 -------------------------------------------------------------------------------------------------------------------
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 AVERAGE ANNUAL TOTAL RETURNS THROUGH 6/30/05
2nd Year to Life Quarter* Date* 1 year 3 years 5 years 10 years of Fund ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (6/10/70) 4.07% 2.78% 14.58% 17.80% 13.32% 15.77% 16.29% ----------------------------------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% 9.94% 11.88% ----------------------------------------------------------------------------------------------------------------------------- Russell 2500 4.52% 1.24% 12.73% 14.76% 7.42% 12.12% NA ----------------------------------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 3.07% -0.16% 9.67% 12.45% 7.25% 11.42% NA ----------------------------------------------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 3.13% 1.88% 11.47% 12.71% 3.92% 11.51% NA ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (9/23/92) -0.26% 2.97% 22.56% 17.80% 1.63% 10.73% 12.21% ----------------------------------------------------------------------------------------------------------------------------- S&P/Citigroup EMI Global ex-US -0.40% 2.79% 21.33% 21.26% 7.58% 7.17% 8.07% ----------------------------------------------------------------------------------------------------------------------------- MSCI EAFE -1.01% -1.17% 13.65% 12.06% -0.55% 5.22% 6.85% ----------------------------------------------------------------------------------------------------------------------------- Lipper Int'l Small- Cap Funds Index -0.22% 3.62% 20.72% 21.47% 6.20% NA NA ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (9/4/96) 5.48% 5.48% 15.82% 16.88% 14.56% -- 14.58% ----------------------------------------------------------------------------------------------------------------------------- Russell 2000 4.32% -1.25% 9.45% 12.81% 5.71% -- 9.08% ----------------------------------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 3.07% -0.16% 9.67% 12.45% 7.25% -- 10.22% ----------------------------------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% -- 8.69% ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (11/23/98) -0.96% 0.58% 15.96% 15.38% -1.40% -- 9.77% ----------------------------------------------------------------------------------------------------------------------------- S&P/Citigroup World ex-US Cap Range $2-10B -0.29% 0.79% 17.64% 17.54% 6.64% -- 8.75% ----------------------------------------------------------------------------------------------------------------------------- MSCI EAFE -1.01% -1.17% 13.65% 12.06% -0.55% -- 3.24% ----------------------------------------------------------------------------------------------------------------------------- Lipper International Funds Index -0.60% -0.65% 13.45% 11.16% -0.19% -- 4.50% ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (11/23/98) 5.45% -0.14% 10.23% 14.49% 10.71% -- 14.04% ----------------------------------------------------------------------------------------------------------------------------- S&P MidCap 400 4.26% 3.85% 14.03% 13.16% 8.49% -- 11.79% ----------------------------------------------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 3.14% -0.92% 7.31% 9.82% -7.03% -- 5.61% ----------------------------------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -2.37% -- 1.88% ----------------------------------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (9/25/02) 2.62% 1.44% 7.79% -- -- -- 12.39% ----------------------------------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% -- -- -- 16.57% ----------------------------------------------------------------------------------------------------------------------------- Lehman U.S. Credit Intermediate Bond Index 2.76% 1.56% 5.79% -- -- -- 5.67% ----------------------------------------------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index 1.18% -0.36% 6.70% -- -- -- 13.52% 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*Not annualized. PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. 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 AND MONTH-END UPDATES. NET ASSET VALUE (NAV) RETURNS DO NOT INCLUDE SALES CHARGES OR CONTINGENT DEFERRED SALES CHARGES (CDSC). CLASS Z SHARES ARE SOLD ONLY AT NAV WITH NO 12B-1 FEE. CLASS Z SHARES HAVE LIMITED ELIGIBILITY AND THE INVESTMENT MINIMUM REQUIREMENT MAY VARY. PLEASE SEE THE FUND'S PROSPECTUS FOR DETAILS. 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. S&P/ 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. S&P/CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the broad market selected by the index sponsor representing the mid-cap developed market 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. 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. It is not possible to invest directly in an index. 2 >SQUIRREL CHATTER: DISCIPLINE AND CREATIVITY [PHOTO OF RALPH WANGER] A popular new book by Tom Friedman, "The World Is Flat: A Brief History of the Twenty-First Century," recounts how developing countries such as India and China are using modern technology to compete with the United States in both manufacturing and services. He contrasts the success of China and India to the failure of the Arab states to participate in the modern world. He deplores the influence of Yamani, the former Saudi oil minister, who used oil as an economic weapon, and Osama bin Laden who uses terror as a political weapon. Friedman compares the stagnant current state of Arab culture with its peak in the 12th century. "What makes Yamanism and Bin Ladenism unfortunate as strategies for the Arabic world is that they ignore the examples within the Arab culture and civilization - when it was at its height - of discipline, hard work, knowledge, achievement, scientific inquiry, and pluralism." 1 The popular Susan Hockfield was just installed as president of MIT. In her inaugural speech she invoked her list of virtues. She said, "The value of engineering - the rigor; the unflappable curiosity; the discipline and creativity; the appetite for good, old fashioned hard work; the passionate, enthusiastic, can do, hands-on, fix-it-now attitude - these values are and always will be the values of MIT." The rules for success in the world don't seem to have changed very much. Twelfth century Cordoba and 21st century Cambridge are completely different in almost every way, but the characteristics that make you successful have not changed. Any financial analyst or serious investor should apply the engineer's characteristics of discipline, hard work, knowledge and enthusiasm to investing. President Hockfield's linking of discipline and creativity is interesting. It's widely believed that we should diversify and balance our investments. We balance stocks vs. bonds, growth stocks vs. value stocks, big-cap vs. small-cap stocks, and U.S. stocks vs. international, but it is unusual to think of the balance between discipline and creativity; yet this balance is what I believe brings good investment results. Discipline without creativity is sterile - you tend to get an index fund. Index funds run by computer algorithm are boring and backward looking - although they have a significant place in investment portfolios. Creativity without discipline tends to result in wild speculation and money-losing results. We all remember the dot.com's in 1999 when the market was dominated by speculators who ignored valuation in favor of science- fiction fantasies. The resulting bubble was a seductive, narcotic experience for a year or two but of course ended very badly. We believe the Columbia Acorn Funds have been successful because our analysts have been able to maintain a balance between discipline and creativity. WE ARE NOT MANUFACTURERS Organizations that are in the business of marketing mutual funds often prefer discipline and are made nervous by creativity. For instance, Raymond "Chip" Mason, chairman of Legg Mason, a major force in the mutual fund business, said recently, "For two years we've been looking to cross the line and become pure asset management. All the regulators have been pointing toward the need to separate the manufacturing and distribution businesses." 2 I have been in corporate meetings in which mutual fund portfolio management was called "manufacturing" but this is a strange and inapt metaphor. Manufacturers make products. Mutual funds are NOT a product. Cap'n Crunch cereal is a product. When you go to the store to buy a new box of Cap'n Crunch you expect the taste and nutrition performance to be exactly like the last box. Manufacturing cereal is very disciplined resulting in high quality and high reliability, so that every box is identical. Since you are a mutual fund shareholder you know that a mutual fund could be a lot better or a lot worse than you expected when you bought it. Investing involves forecasting the future, but forecasting is an uncertain and sloppy process. While discipline is important, you need a lot of creativity as well. Predicting the future does not require a fortune teller with a crystal ball. It is more like watching a skilled athlete. When you go to a baseball game and a batter hits a fly ball to left field, the fielder will see the ball heading his direction and, by experience, run to where the ball is going to land and make what looks like a routine catch. The fielder has to predict the flight of the ball, which for a physicist would require solving a complicated equation, but the player shows that it is not an impossible task. Like the outfielder, we have figured out where trends are likely going to land with reasonable success. As in baseball, the ball can elude the fielder and the batter 3 ends up on second base. Sometimes our analysts miss the ball too, but for the full season we tend to catch more balls than we miss. TWO WHEELS GOOD, FOUR WHEELS BAD Other teams haven't done so well. Forty years ago, major U.S. car makers were among the largest companies in the world and were highly profitable. Since then, the U.S. automotive industry has fallen into a long slump. Their corporate bonds have been downgraded in quality, which is a definite sign of financial problems. I believe that these companies were complacent and arrogant, so the German and Japanese car makers beat them up. A long time ago, perhaps 1966, I attended a meeting of the Chicago Science Analysts with the General Time Corporation. The company's main business was making name-brand clocks like Seth Thomas and Big Ben. It also made automobile clocks. The clocks were sold as accessories with the car. They were mechanical clocks because electronic clocks hadn't yet been invented. They worked for about three months and then broke. The U.S. automotive giant that bought the clocks from General Time paid $3.25 per clock and resold it to the customer for $21. I asked the president of General Time why his clocks didn't work better. I knew this was an impertinent question but I wanted to see how he would react. I expected him to take a defensive position retorting that the clocks were fine but weren't being used correctly. To my surprise he admitted that the clocks WERE lousy and he explained why. General Time couldn't make a good clock for $3.25. The clock needed an additional component that would have made it a sturdy, reliable device, but this improvement would have raised the selling price to $3.75. Its customer, the automobile manufacturer, was adamant about sticking to the lower price. Even to an inexperienced analyst, as I was in 1966, I did not see how the automaker could prosper if it was not delivering a high-quality car. Such a successful company could have paid $3.75 for a clock and sold it for a decent profit even if it kept the price at $21. While this would have been a less enormous markup, the car likely would have been a better vehicle. If the automaker was willing to sell a crummy clock, then I thought that customers would perceive that it was cutting corners on all the other components of the vehicle too. Bad clock, bad car. This willingness to forego quality for price made room for the imports. Why am I bringing up an anecdote from 40 years ago? I think there are some useful lessons here for financial analysts and investors. First, in a management meeting it is okay to ask tough questions. You get more meaningful answers that way. Second, you can find out a lot about a company by talking to its suppliers or customers. Company spokesmen will only give you their own corporate press release. Third, a long-term trend will take a long time to develop but it is enormously important. At the time of my 1966 meeting, U.S. automakers were riding high because foreign car imports were not yet a problem. In 1960, Japan exported only 39,000 vehicles. By 1970, the Japanese were starting to exploit the lower quality of U.S. cars and exported 1.1 million cars. In 1980, exports rose to 6 million and the Japanese were producing more vehicles than U.S. manufacturers. U.S. automotive companies had to react to the loss of market share from high-quality imports. However, once there is a loss of market share, it is not usually readily reversible. DAVID ALWAYS BEATS GOLIATH There are several lessons we can learn from the decline of Arab civilization and the problems of U.S. auto companies: (1) To operate a successful business, the world is too competitive to be complacent. Like baseball players, companies have to fight to keep their position on the team. Great U.S. businesses must constantly compete in the world market and it is darn tough. (2) Big companies are often just big targets. Small companies are hungry to succeed and are constantly focused on improving with the hope of taking some of the flabby giant's customers. (3) History provides a useful context. Discipline, creativity, hard work, knowledge, achievement, and a can-do, hands-on, fix-it-now attitude worked in the past and will work now. (4) We believe small-cap investing works if you can identify the hungry, small companies whose employees embrace our list of exemplary values. The core investment strategy of the Columbia Acorn Funds has always been to try to find small- and mid-cap companies that are on the way up. We don't want to own once-great companies that are now on their way down. This is partly a matter of personal taste, because we find following big, sick companies 4 to be depressing. Even though there are occasional turnarounds in these big companies, it seems to us that is not the way to bet. SO LONG AND BEST REGARDS! This is my final "Squirrel Chatter." I am retiring from Columbia Wanger Asset Management as of September 30, but I will still be a trustee of Acorn Investment Trust. While I considered writing a few more essays, current regulatory rules are not conducive to the free-ranging thought that was characteristic of these essays. I have great confidence in Chuck McQuaid and his team of analysts and portfolio managers to keep the performance of the Funds at a competitive level. Thank you, fellow shareholders, for your support over 35 years. I regard myself as truly fortunate to have been able to build a career in this exciting industry. I am especially proud that we have enabled thousands of our shareholders to pursue their economic goals by investing in our funds. COLUMBIA WAM NEWS We are pleased to announce that Ashish Kohli has joined our domestic analyst team to follow health care. Jason Selch, who followed energy, departed in May. We are searching for his replacement and continue to talk to some promising candidates. Your Columbia Acorn investment team includes 20 investment analysts and portfolio managers. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. -------------------------------------------------------------------------------- 1 Friedman, Thomas, THE WORLD IS FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST CENTURY, Farrar, Straus and Giroux, 2005. Page 405. 2 Raymond "Chip" Mason, chairman of Legg Mason, THE WALL STREET JOURNAL, June 27, 2005, page C1. 5 >UNDERSTANDING YOUR EXPENSES As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The information on this page is intended to help you understand your ongoing costs of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the Class Z shares of the Columbia Acorn Funds for the last six months. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using each fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column assumes that the return each year is 5% before expenses and then applies each fund's actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the reporting period. See the "Compare with other funds" information for details on using the hypothetical data. >JANUARY 1, 2005 - JUNE 30, 2005
ACCOUNT VALUE AT ACCOUNT VALUE AT THE BEGINNING OF THE END OF EXPENSES PAID FUND'S THE PERIOD ($) THE PERIOD ($) DURING PERIOD ($) ANNUALIZED ---------------------------------------------------------------------------------------- EXPENSE CLASS Z SHARES ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL RATIO (%)* ----------------------------------------------------------------------------------------------------------------------------------- Columbia Acorn Fund 1,000.00 1,000.00 1,027.82 1,021.03 3.82 3.81 0.76 ----------------------------------------------------------------------------------------------------------------------------------- Columbia Acorn International 1,000.00 1,000.00 1,029.70 1,019.84 5.08 5.06 1.01 ----------------------------------------------------------------------------------------------------------------------------------- Columbia Acorn USA 1,000.00 1,000.00 1,054.80 1,019.69 5.25 5.16 1.03 ----------------------------------------------------------------------------------------------------------------------------------- Columbia Acorn International Select 1,000.00 1,000.00 1,005.80 1,017.60 7.21 7.25 1.45 ----------------------------------------------------------------------------------------------------------------------------------- Columbia Acorn Select 1,000.00 1,000.00 998.61 1,019.84 4.96 5.01 1.00 ----------------------------------------------------------------------------------------------------------------------------------- Columbia Thermostat Fund 1,000.00 1,000.00 1,014.38 1,023.55 1.25 1.25 0.25 -----------------------------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365. Had the Investment Adviser and/or Transfer Agent not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the funds and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. Columbia Thermostat Fund's expenses do not include fees and expenses incurred by the Fund from the underlying portfolio funds. * For the six months ended 06/30/05. COMPARE WITH OTHER FUNDS Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the funds with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. 1-800-922-6769 6 ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at (800) 922-6769. o For shareholders who receive their account statements from their brokerage firm, contact your brokerage firm to obtain your account balance. 1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6. 2. In the section of the table titled "Expenses paid during the period," locate the amount for your fund. You will find this number is in the column labeled "actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. 7 COLUMBIA ACORN FUND >IN A NUTSHELL [PHOTO OF CHARLES P. MCQUAID] [PHOTO OF ROBERT A. MOHN] Columbia Acorn Fund was up 4.07% in the second quarter, slightly underperforming the Russell indexes but outperforming the Lipper Small- and Mid-Cap Funds indexes as well as the large-cap S&P 500 Index. In the first half of 2005, the Fund grew 2.78%, moderately beating all of its benchmarks. (See Page 2 performance data). Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. Columbia Acorn's domestic stocks rose 5.16% in the quarter, driven by good stock selections. Handbag designer Coach and women's apparel retailer Chico's FAS were the Fund's two top dollar winners, each ringing up gains of about 20%. Hobby goods retailer Michaels Stores and apparel retailer Abercrombie & Fitch also were among our top 10 dollar gainers, rising 14% and 20% respectively. All were up on better than expected earnings and outperformed their group in the quarter. We thank our consumer analyst, Susie Hultquist, for these fine stock picks. Esco Technologies, a producer of remotely read electric meters, jumped 25% on large orders and fine earnings (see sidebar for details). Filter maker Cuno surged 39% in the quarter when it agreed to sell. Our industrial analyst Rob Chalupnik found both of these winners. Southwestern Energy spurted up 66% in the quarter, as investors got excited about new drilling prospects. Communications tower company Crown Castle International transmitted a 26% gain, spurred by an attractive debt refinancing. Hospitality information system provider Micros Systems served a 22% return on better than expected earnings. Columbia Acorn's largest dollar losers were Navigant Consulting, off 35%, and Kronos, down 21%, both lower due to earnings estimate cuts. Harley-Davidson hit a speed bump, falling 14% on lower than expected production hikes. Columbia Acorn's foreign stocks rose 1.91% and ended the quarter representing 15% of the fund. Oil-pipe makers Vallourec and Tenaris continued their runs, each producing gains of more than 30%. Sweden-based kitchen cabinet maker Nobia fell 21% on lower revenues and manufacturing problems in its U.K. operations. The Fund's foreign stocks overall did fine against their benchmarks and were up nicely in local currencies, but dollar gains were slashed by currency movements. /s/Charles P. McQuaid /s/Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- METERING SUCCESS -------------------------------------------------------------------------------- We wrote about Esco Technologies in our second quarter 2004 shareholder report, citing the virtues of all three of its businesses - filters, remotely read electric meters, and radio frequency shielding products. Since the company's meter business is accelerating and the stock has continued to do well, we are providing more perspective. We had unsuccessfully invested in remote metering many years ago, so this time we did lots of homework. We talked to customers and competitors and visited trade shows. Our contacts confirmed that Esco's meters were reliable and cost effective, and could help manage peak electricity demand. Meter orders have surged and meters are now driving Esco's profits. The stock is up 252% from our first purchase and we think excellent growth can continue. -------------------------------------------------------------------------------- SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: COACH, 1.4%; CHICO'S FAS, 1.2%; MICHAELS STORES, 0.9%; ABERCROMBIE & Fitch, 0.6%; ESCO TECHNOLOGIES, 0.7%; CUNO, 0.4%; SOUTHWESTERN ENERGY, 0.3%; CROWN CASTLE INTERNATIONAL, 0.6%; MICROS SYSTEMS, 0.6%, NAVIGANT CONSULTING, 0.2%, KRONOS, 0.4%, HARLEY-DAVIDSON, 0.6%, VALLOUREC, 0.3%; TENARIS, 0.3%; NOBIA, 0.2%. 1-800-922-6769 8 COLUMBIA ACORN FUND >AT A GLANCE TICKER SYMBOL: ACRNX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------- YEAR TO DATE* 1 YEAR 5 YEARS 10 YEARS ---------------------------------------------- Returns before taxes 2.78% 14.58% 13.32% 15.77% -------------------------------------------------------------------------------- Returns after taxes 2.53 13.67 12.50 13.74 on distributions -------------------------------------------------------------------------------- Returns after taxes 2.07 10.43 11.30 12.98 on distributions and sale of fund shares -------------------------------------------------------------------------------- S&P 500 (pretax) -0.81 6.32 -2.37 9.94 -------------------------------------------------------------------------------- Russell 2500 (pretax) 1.24 12.73 7.42 12.12 -------------------------------------------------------------------------------- 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 tax impact of 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, 2005 [PIE CHART] Consumer Goods/Services 21.0% Industrial Goods/Services 15.4% Finance 12.1% Other* 11.6% Energy/Minerals 9.4% Health Care 8.6% Information 21.9% Software/Services 9.0% Computer Related Hardware 6.6% Telecommunications 3.9% Media 2.4% * Other includes short-term obligations, cash and other assets less liabilities of 7.6%. Foreign equities within the portfolio were 15.0% diversified by country as follows: 5.7% Europe ex-Ireland & UK; 2.9% Ireland & UK; 1.8% Canada; 0.5% Australia/New Zealand; 2.8% Latin America and Emerging Markets; 1.3% Japan. -------------------------------------------------------------------------------- THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS Z) -------------------------------------------------------------------------------- >June 10, 1970 through June 30, 2005 This graph compares the results of $50,000 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, and to an initial $158,883 investment in the Russell 2500, an index of the 2,500 smallest U.S. companies, on the index's December 31, 1978 inception date. The indexes are unmanaged and returns for both 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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV ON 06/30/05: $26.79 TOTAL NET ASSETS OF THE FUND: $14,502.8 MILLION AVERAGE ANNUAL TOTAL RETURN ------------------------------------------------ 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 14.58% 13.32% 15.77% 16.29% [MOUNTAIN CHART] COLUMBIA ACORN FUND S&P 500 RUSSELL 2500 ---------- ------- ------------ 6/10/1970 50000 50000 6/30/1970 48475 49099 52586 52875 56115 55405 9/30/1970 60114 57406 59581 56929 60847 59811 12/31/1970 63381 3/31/1971 6/30/1971 9/30/1971 12/31/1971 3/31/1972 6/30/1972 9/30/1972 12/31/1972 3/31/1973 6/30/1973 9/30/1973 12/31/1973 3/31/1974 64627 6/30/1974 62535 58591 61831 53108 55882 9/30/1974 48486 49444 60079 57757 57181 54935 12/31/1974 53421 54081 61857 60957 64478 64845 3/31/1975 65113 66494 6/30/1975 9/30/1975 12/31/1975 3/31/1976 6/30/1976 9/30/1976 12/31/1976 3/31/1977 6/30/1977 9/30/1977 12/31/1977 3/31/1978 6/30/1978 9/30/1978 12/31/1978 3/31/1979 3/31/1979 3/31/1979 3/31/1979 6/30/1979 6/30/1979 6/30/1979 6/30/1979 9/30/1979 9/30/1979 9/30/1979 9/30/1979 12/31/1979 12/31/1979 12/31/1979 12/31/1979 3/31/1980 3/31/1980 3/31/1980 3/31/1980 6/30/1980 6/30/1980 6/30/1980 6/30/1980 9/30/1980 9/30/1980 9/30/1980 9/30/1980 12/31/1980 12/31/1980 12/31/1980 12/31/1980 3/31/1981 3/31/1981 3/31/1981 3/31/1981 6/30/1981 6/30/1981 6/30/1981 6/30/1981 9/30/1981 9/30/1981 9/30/1981 9/30/1981 12/31/1981 12/31/1981 12/31/1981 12/31/1981 3/31/1982 3/31/1982 3/31/1982 3/31/1982 6/30/1982 6/30/1982 6/30/1982 6/30/1982 9/30/1982 9/30/1982 9/30/1982 9/30/1982 12/31/1982 12/31/1982 12/31/1982 12/31/1982 3/31/1983 3/31/1983 3/31/1983 3/31/1983 6/30/1983 6/30/1983 6/30/1983 6/30/1983 9/30/1983 9/30/1983 9/30/1983 9/30/1983 12/31/1983 12/31/1983 12/31/1983 12/31/1983 3/31/1984 3/31/1984 3/31/1984 3/31/1984 6/30/1984 6/30/1984 6/30/1984 6/30/1984 9/30/1984 9/30/1984 9/30/1984 9/30/1984 12/31/1984 12/31/1984 12/31/1984 12/31/1984 3/31/1985 3/31/1985 3/31/1985 3/31/1985 6/30/1985 6/30/1985 6/30/1985 6/30/1985 9/30/1985 9/30/1985 9/30/1985 9/30/1985 12/31/1985 12/31/1985 12/31/1985 12/31/1985 3/31/1986 3/31/1986 3/31/1986 3/31/1986 6/30/1986 6/30/1986 6/30/1986 6/30/1986 9/30/1986 9/30/1986 9/30/1986 9/30/1986 12/31/1986 12/31/1986 12/31/1986 12/31/1986 3/31/1987 3/31/1987 3/31/1987 3/31/1987 6/30/1987 6/30/1987 6/30/1987 6/30/1987 9/30/1987 9/30/1987 9/30/1987 9/30/1987 12/31/1987 12/31/1987 12/31/1987 12/31/1987 3/31/1988 3/31/1988 3/31/1988 3/31/1988 6/30/1988 6/30/1988 6/30/1988 6/30/1988 9/30/1988 9/30/1988 9/30/1988 9/30/1988 12/31/1988 12/31/1988 12/31/1988 12/31/1988 3/31/1989 3/31/1989 3/31/1989 3/31/1989 1004680 1040490 6/30/1989 6/30/1989 6/30/1989 1021120 1079720 1107110 9/30/1989 1017960 9/30/1989 1132470 1012910 1066790 960253 1087840 12/31/1989 967870 12/31/1989 1113410 972672 1041290 891533 1054260 3/31/1990 916537 3/31/1990 1086170 945681 1054780 910824 1130010 6/30/1990 982773 6/30/1990 1148430 982856 1131900 947585 979516 9/30/1990 833577 9/30/1990 875407 766844 854794 730332 888714 12/31/1990 792594 12/31/1990 918371 827947 973073 894017 1052590 3/31/1991 985091 3/31/1991 1095160 1039160 1130410 1036920 1183700 6/30/1991 1084690 6/30/1991 1132670 1037420 1185000 1085940 1229880 9/30/1991 1126750 9/30/1991 1231020 1126920 1269930 1152580 1233860 12/31/1991 1106630 12/31/1991 1353200 1216170 1425780 1276360 1477750 3/31/1992 1310060 3/31/1992 1467300 1267920 1422880 1242750 1428980 6/30/1992 1254010 6/30/1992 1394140 1210210 1446560 1255250 1423400 9/30/1992 1222220 9/30/1992 1448620 1242750 1525140 1280090 1614190 12/31/1992 1364370 12/31/1992 1681050 1411900 1753390 1445760 1748520 3/31/1993 1425480 3/31/1993 1843050 1478710 1796850 1436650 1944870 6/30/1993 1494440 6/30/1993 1967050 1510010 1957060 1519700 2086230 9/30/1993 1587010 9/30/1993 2147140 1616980 2228860 1636350 2144690 12/31/1993 1583610 12/31/1993 2224440 1645630 2235610 1697700 2208500 3/31/1994 1691580 3/31/1994 2101660 1609030 2119200 1618390 2095280 6/30/1994 1601750 6/30/1994 2023530 1551900 2088900 1593960 2185300 9/30/1994 1680150 9/30/1994 2157940 1663100 2149890 1666000 2066220 12/31/1994 1593800 12/31/1994 2058750 1628410 2020070 1625180 2085660 3/31/1995 1706730 3/31/1995 2115940 1748620 2139490 1779760 2205080 6/30/1995 1817430 6/30/1995 2294230 1904610 2405710 1024830 2016960 2431220 1027410 2049250 9/30/1995 2480520 1070770 2087580 2376810 1066940 2022260 2444820 1113780 2108700 12/31/1995 2487030 1135230 2144630 2527260 1173870 2159860 2626020 1184760 2224940 3/31/1996 2677220 1196160 2270230 2819860 1213800 2375210 2920440 1245100 2439710 6/30/1996 2863750 1249850 2364780 2716050 1194630 2191660 2819940 1219830 2317670 9/30/1996 2923830 1288490 2418100 2908990 1324030 2402200 2990620 1424110 2518280 12/31/1996 3047850 1395890 2552810 3155250 1483100 2623350 3114720 1488760 2584350 3/31/1997 2972870 1433310 2467360 2989080 1518870 2498580 3226180 1611350 2728580 6/30/1997 3374110 1683540 2840110 3546960 1817490 3006520 3563400 1715670 3048420 9/30/1997 3836720 1809630 3247700 3723690 1749200 3101740 3723690 1830170 3115650 12/31/1997 3809260 1861600 3174600 3742000 1882190 3126080 4015530 2017940 3353100 3/31/1998 4266640 2121280 3500140 4329420 2142620 3513390 4165750 2105800 3350290 6/30/1998 4254890 2191330 3354260 4013830 2168000 3123840 3281560 1854550 2534590 9/30/1998 3424830 1973360 2714590 3597670 2133880 2862960 3745480 2263200 3004780 12/31/1998 4038430 2393620 3186850 4036030 2493710 3181390 3853880 2416210 2972330 3/31/1999 3894620 2512880 3035920 4213380 2610200 3307480 4280490 2548560 3358900 6/30/1999 4509220 2690000 3533680 4574710 2606000 3464210 4441300 2593110 3355830 9/30/1999 4417040 2522020 3305910 4550450 2681620 3378270 4873060 2736130 3569030 12/31/1999 5386280 2897280 3956260 5255470 2751710 3865270 5644980 2699620 4423470 3/31/2000 5409530 2963720 4355770 5223500 2874560 4121520 5113040 2815580 3923770 6/30/2000 5310520 2884990 4181530 5332110 2839890 4075060 5720690 3016280 4425960 9/30/2000 5816290 2857040 4281960 5668260 2844960 4164470 5370030 2620670 3797980 12/31/2000 5928040 2633500 4125090 6038270 2726930 4260640 5886710 2478280 3986290 3/31/2001 5621480 2321280 3767600 6117490 2501670 4100330 6375830 2518430 4223670 6/30/2001 6466180 2457140 4283630 6343650 2432950 4130450 6091580 2280640 3995100 9/30/2001 5265370 2096480 3478090 5489420 2136450 3657940 5913030 2300330 3953770 12/31/2001 6291780 2320480 4175410 6231960 2286620 4123590 6154540 2242520 4051380 3/31/2002 6604960 2326860 4331490 6590890 2185790 4320480 6393830 2169680 4193840 6/30/2002 6070090 2015120 3957500 5352240 1858050 3485220 5397980 1870250 3495760 9/30/2002 5077760 1666990 3218800 5292410 1813710 3323710 5633750 1920470 3595050 12/31/2002 5454280 1807640 3432390 5327600 1760290 3341190 5243150 1733880 3260910 3/31/2003 5310010 1750710 3291990 5770980 1894920 3585380 6182690 1994760 3938000 6/30/2003 6372710 2020200 4013230 6671820 2055820 4228960 7023710 2095920 4424640 9/30/2003 6942780 2073660 4364460 7509320 2190970 4709310 7752120 2210240 4886590 12/31/2003 7945920 2326170 4994450 8234730 2368860 5176670 8393230 2401780 5256720 3/31/2004 8520020 2365550 5288310 8217120 2328410 5034300 8365050 2360360 5137050 6/30/2004 8660600 2406260 5306050 8219810 2326620 4997300 8212760 2336030 4984530 9/30/2004 8586550 2361330 5172530 8801650 2397410 5290500 9355280 2494410 5685530 12/31/2004 9654980 2579290 5908130 9446910 2516420 5709650 9713380 2569380 5838880 3/31/2005 9534520 2523880 5722590 9143940 2476010 5465200 9600220 2554800 5795900 6/30/2005 9922980 2558420 5981360 * A $50,000 investment in Columbia Acorn Fund at inception appreciated to $158,883 on December 31, 1978, the inception date of the Russell 2500. For comparison with the Russell 2500, we assigned the index the same value as the Fund at index inception. -------------------------------------------------------------------------------- COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Coach 1.4% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 2. Chico's FAS 1.2% WOMEN'S SPECIALTY RETAILER 3. XTO Energy 1.2% NATURAL GAS PRODUCER 4. International Game Technology 1.2% SLOT MACHINES & PROGRESSIVE JACKPOTS 5. AmeriCredit 1.0% AUTO LENDING 6. Expeditors International of Washington 0.9% INTERNATIONAL FREIGHT FORWARDER 7. Michaels Stores 0.9% CRAFT & HOBBY SPECIALTY RETAILER 8. Western Wireless 0.9% RURAL CELLULAR PHONE SERVICES 9. Peoples Bank of Bridgeport 0.9% CONNECTICUT SAVINGS & LOAN 10. ITT Educational Services 0.8% POSTSECONDARY DEGREE PROGRAMS 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 second quarter down 0.26%, slightly ahead of the benchmark S&P/Citigroup EMI Global ex-US return which fell 0.40%. The larger cap MSCI EAFE Index was down 1.01% in the quarter. Year-to-date, the Fund is up 2.97%, which puts it 0.2% ahead of the benchmark, and 4.2% ahead of the MSCI EAFE Index. As has been the case for several years, international small-cap stocks continued to substantially outperform their large-cap counterparts. Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. Steel pipe manufacturers might seem unlikely candidates for the quarter's biggest winners considering the poor performance of the steel sector in general, but two of the Fund's investments, Vallourec and Tenaris, earned this distinction by returning more than 30% to shareholders. Their specialty steel products are critical to the successful development of oil and gas fields globally. In the past year, both companies have seen strong volume and price increases as high energy prices stimulated oil and gas companies to increase spending on exploration and pipelines. These two companies have been central to our strategy of taking advantage of an anticipated rebound in oil-field service spending. As both companies were among the Fund's top holdings at the beginning of the quarter, their contribution to overall return was substantial. Other positive drivers to performance were Housing Development Finance, the Indian mortgage finance company, which rose 25% on continued strong mortgage growth, and SES Global, the European satellite services company, up 19%, from the region's switch to an HDTV format. During the quarter, the U.S. dollar reversed its recent slide against most world currencies, appreciating more than 7% against the euro. This compounded otherwise moderate weakness on several of our long-term European winners, such as Nobia (kitchen cabinets), Sligro Food Group (food distribution) and United Services Group (temporary staffing), each of which fell more than 15% in dollar terms. Other sizable holdings negatively affecting performance came from diverse sectors in Japan, including Funai Electric (consumer electronics), and Kappa Create (restaurants). Funai Electric was hurt by raw material price increases while Kappa Create's profitability remains under pressure as it works to maintain its share of an increasingly crowded marketplace. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- PIPING PROFITS Headquartered in Argentina, Tenaris is a global manufacturer and supplier of seamless steel pipe products and related services. It has locations ranging from Japan to Mexico to Italy. High oil prices are driving energy companies to increase their exploration and production activities. With more than 50% of its revenue coming from energy-related equipment sales, this directly translates into more orders for the company. In addition, Tenaris competes in a specialty niche, high-demand product category that is giving it the pricing power to protect and expand margins even as raw material prices are falling. -------------------------------------------------------------------------------- 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. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: VALLOUREC, 1.5%; TENARIS, 1.2%; HOUSING DEVELOPMENT FINANCE, 1.2%; SES GLOBAL, 1.3%; NOBIA, 0.7%; SLIGRO FOOD GROUP, 0.7%; UNITED SERVICES GROUP, 0.8%; FUNAI ELECTRIC, 0.5%; KAPPA CREATE, 0.3%. 1-800-922-6769 10 COLUMBIA ACORN INTERNATIONAL >AT A GLANCE TICKER SYMBOL: ACINX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------- YEAR TO DATE* 1 YEAR 5 YEARS 10 YEARS ---------------------------------------------- Returns before taxes 2.97% 22.56% 1.63% 10.73% -------------------------------------------------------------------------------- Returns after taxes 2.45 22.14 0.89 9.77 on distributions -------------------------------------------------------------------------------- Returns after taxes 1.93 14.86 1.12 9.11 on distributions and sale of fund shares -------------------------------------------------------------------------------- S&P/Citigroup EMI 2.79 21.33 7.58 7.17 Global 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 tax impact of 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, 2005 [PIE CHART] Consumer Goods/Services 19.4% Finance 13.8% Information 13.6% Other* 10.5% Energy/Minerals 9.5% Health Care 6.7% Industrial Goods/Services 26.5% * Other includes short-term obligations, cash and other assets less liabilities of 4.0%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS Z) -------------------------------------------------------------------------------- >September 23, 1992 through June 30, 2005 This graph compares the results of $10,000 invested in Columbia Acorn International at inception on September 23, 1992 to the S&P/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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV AS OF 06/30/05: $29.46 TOTAL NET ASSETS OF THE FUND: $2,268.3 MILLION AVERAGE ANNUAL TOTAL RETURN ------------------------------------------------ 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND 22.56% 1.63% 10.73% 12.21% [MOUNTAIN CHART] COLUMBIA ACORN S&P/CITIGROUP EMI INTERNATIONAL GLOBAL EX-US ------------- ------------ 9/23/92 10000 10000 9/30/92 10010 10113 10380 9490 10570 9510 12/31/92 10690 9646 10780 9732 11460 10079 3/31/93 12000 11093 12450 12111 12910 12754 6/30/93 12920 12264 12920 12642 13760 13294 9/30/93 13910 13016 14560 12970 14620 11886 12/31/93 15940 12650 16630 13915 16570 14012 3/31/94 15850 13783 15960 14196 15870 13990 6/30/94 15550 14283 15980 14452 16481 14616 9/30/94 16491 14199 16522 14439 15606 13606 12/31/94 15334 13689 14640 13132 14550 12907 3/31/95 14811 13417 15264 13820 15505 13634 6/30/95 15727 13479 16582 14236 16411 13886 9/30/95 16824 13985 16300 13581 16069 13694 12/31/95 16703 14224 17357 14547 17881 14726 3/31/96 18203 15033 18787 15811 19341 15688 6/30/96 19593 15692 18968 15075 19240 15227 9/30/96 19362 15309 19553 15213 20088 15459 12/31/96 20153 15202 20636 14981 20893 15285 3/31/97 20585 15095 20287 14894 21170 15768 6/30/97 21808 16173 21951 16017 20788 15314 9/30/97 21660 15561 20487 14801 20269 14112 12/31/97 20190 13816 20476 14250 22123 15327 3/31/98 23857 16068 24351 16198 24769 16336 6/30/98 24335 15760 24491 15660 21368 13602 9/30/98 20428 13301 21111 14217 22309 14707 12/31/98 23305 15019 23842 14914 23126 14635 3/31/99 23574 15268 24984 16201 25141 15801 6/30/99 27222 16416 28191 16947 29002 17244 9/30/99 29486 17166 30759 17009 35365 17621 12/31/99 41761 18820 41607 18462 48298 19172 3/31/00 46808 19257 41359 17993 38286 17617 6/30/00 40171 18686 39669 18067 40563 18585 9/30/00 38494 17631 35630 16564 32730 15834 12/31/00 33402 16452 34915 16759 32408 16108 3/31/01 29285 14860 30419 15833 30223 15801 6/30/01 28747 15265 27591 14818 27035 14778 9/30/01 23354 12853 24467 13375 25850 13925 12/31/01 26350 14040 25708 13786 25636 14016 3/31/02 26977 14930 27862 15240 27748 15728 6/30/02 26646 15104 23854 13823 23496 13740 9/30/02 21406 12472 21492 12754 22150 13230 12/31/02 22107 13073 21562 12853 20988 12624 3/31/03 20686 12501 22567 13679 24433 14845 6/30/03 25134 15399 25681 15948 26835 16710 9/30/03 27844 17474 29979 18746 30800 19087 12/31/03 32675 20265 33641 20993 34910 21717 3/31/04 34924 22249 34175 21502 34290 21505 6/30/04 35543 22195 34625 21412 34786 21643 9/30/04 36243 22450 37555 23138 40411 24959 12/31/04 42305 26198 42699 26445 45016 27733 3/31/05 43675 27036 42334 26187 42436 26372 6/30/05 43561 26929 -------------------------------------------------------------------------------- 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. Vallourec (France) 1.5% SEAMLESS TUBES 4. Billabong International (Australia) 1.4% ACTION SPORTS APPAREL BRAND MANAGER 5. Fugro (Netherlands) 1.4% SURVEY & GPS SERVICES 6. SES Global (France) 1.3% SATELLITE BROADCASTING SERVICES 7. Neopost (France) 1.3% POSTAGE METER MACHINES 8. Grafton Group (Ireland) 1.2% BUILDING MATERIALS, WHOLESALING & DIY RETAILING 9. Housing Development Finance (India) 1.2% PREMIER MORTGAGE LENDER IN INDIA 10. Tenaris (Argentina) 1.2% STEEL PIPE FOR OIL WELLS & PIPELINES 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] Small-cap stocks had a strong second quarter. Columbia Acorn USA rose 5.48%, slightly more than the small-cap Russell 2000 Index's 4.32% increase. For the first six months of the year, Columbia Acorn USA was up 5.48%, nicely ahead of the Russell 2000's 1.25% decline. Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. Industrial stocks stoked the Fund's performance for the quarter. Esco Technologies was the biggest dollar winner for the Fund, rising 25% on news that it will likely land a huge contract to install automated electric meter readers. Cuno, a water filtration company, spiked 39% after announcing it was being acquired. Many of the Fund's holdings had been attractive to larger corporate acquirers. Cuno was the fifth company in the Fund to be bought out this year, joining Western Wireless and Brookstone. Rising oil prices lifted energy stocks last quarter. Our energy portfolio was stocked with companies benefiting not only from higher commodity prices, but also from strong internal production growth. Top holdings Quicksilver Resources, up 31%, and Southwestern Energy, up 66%, had exciting new drilling prospects in the Barnet and Fayetteville gas fields. Other winners for the quarter were cellular tower owner Crown Castle International, up 27%, and teen retailer Abercrombie & Fitch up 20%. Our worst-performing group was technology. Software companies Kronos, down 21% and JDA Software Group, off 19%, decreased on weak March-quarter earnings results. SeaChange International dropped 46% as sales of its video-on-demand servers fell short. The turnaround at mobile computing and bar-code scanner company Symbol Technologies has taken longer than hoped, sending its stock down 32% for the quarter. The U.S. stock market has been stuck in a see-saw trading range for the past 18 months. Flat markets like this one may not make for exciting business headlines but were just as plentiful with investment opportunities as the good old Roaring Nineties bull markets. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER -------------------------------------------------------------------------------- THE LIGHT BURNS BRIGHT AT ---------------------------- GENLYTE The Genlyte Group has been a major winner for Columbia Acorn USA, returning 66% since its purchase in June 2004. Genlyte is a leading manufacturer of lighting fixtures and controls and sells product through independent distributors servicing the architect and designer community. This is a better distribution channel than the big-box retailers, with customers willing to pay a higher price for quality design features and service. Although the commercial construction market has been weak for several years, Genlyte managed to grow earnings by taking market share away from competitors and improving profitability. We believe the company's strong market position and the potential for a recovery in the commercial construction market makes Genlyte a solid investment. -------------------------------------------------------------------------------- SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: ESCO TECHNOLOGIES, 2.9%; CUNO, 1.0.%; WESTERN WIRELESS, 2.8.%; BROOKSTONE ,0.3%; QUICKSILVER RESOURCES, 2.3%; SOUTHWESTERN ENERGY, 0.5%; CROWN CASTLE INTERNATIONAL, 2.1%; ABERCROMBIE & Fitch, 2.0%; KRONOS, 1.1%; JDA SOFTWARE GROUP, 1.1%; SEACHANGE INTERNATIONAL, 0.3%; SYMBOL TECHNOLOGIES, 0.6%; GENLYTE GROUP, 1.5%. 1-800-922-6769 12 COLUMBIA ACORN USA >AT A GLANCE TICKER SYMBOL: AUSAX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------- YEAR LIFE OF TO DATE* 1 YEAR 5 YEARS FUND ---------------------------------------------- Returns before taxes 5.48% 15.82% 14.56% 14.58% -------------------------------------------------------------------------------- Returns after taxes 5.26 15.48 14.40 13.87 on distributions -------------------------------------------------------------------------------- Returns after taxes 3.85 10.71 12.75 12.70 on distributions and sale of fund shares -------------------------------------------------------------------------------- Russell 2000 (pretax) -1.25 9.45 5.71 9.08 -------------------------------------------------------------------------------- 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 tax impact of 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, 2005 [PIE CHART] Consumer Goods/Services 18.0% Health Care 14.2% Other* 10.2% Energy/Minerals 11.8% Industrial Goods/Services 9.7% Finance 8.7% Information 27.4% Software/Services 11.8% Telecommunications 9.1% Computer Related Hardware 4.4% Media 2.1% * Other includes short-term obligations, cash and other assets less liabilities of 9.5%. -------------------------------------------------------------------------------- THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS Z) -------------------------------------------------------------------------------- >September 4, 1996 through June 30, 2005 This graph compares the results of $50,000 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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV AS OF 06/30/05: $26.21 TOTAL NET ASSETS OF THE FUND: $994.4 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------------------- 1 YEAR 5 YEARS LIST OF FUND 15.82% 14.56% 14.58% [MOUNTAIN CHART] COLUMBIA ACORN USA RUSSELL 2000 -------------- ------------ 9/4/96 50000 50000 9/30/96 53600 52040 54050 51238 56300 53349 12/31/96 58250 54748 61050 55842 59600 54488 3/31/97 57400 51917 57100 52061 62550 57853 6/30/97 66600 60333 70000 63140 71750 64585 9/30/97 76700 69312 75700 66267 75850 65838 12/31/97 77066 66991 75384 65934 81602 70809 3/31/98 87005 73729 89961 74137 86138 70144 6/30/98 87625 70292 82959 64601 69680 52057 9/30/98 70756 56131 73269 58421 77012 61481 12/31/98 81525 65286 78881 66153 74474 60795 3/31/99 75080 61744 80479 67277 83674 68260 6/30/99 88251 71346 90239 69389 84109 66821 9/30/99 84330 66835 89300 67106 94050 71113 12/31/99 100295 79163 95265 77892 99337 90754 3/31/00 99098 84771 87841 79670 82631 75027 6/30/00 84170 81567 83741 78942 88826 84966 9/30/00 88213 82469 88274 78787 83129 70700 12/31/00 91276 76771 97035 80768 96851 75469 3/31/01 94523 71777 105978 77392 111920 79295 6/30/01 115045 82033 116270 77592 113084 75086 9/30/01 96728 64979 96973 68781 102732 74106 12/31/01 108851 78680 110156 77862 106428 75728 3/31/02 115499 81814 117239 82560 110653 78896 6/30/02 104005 74981 89839 63657 88535 63494 9/30/02 81949 58935 85863 60824 93319 66252 12/31/02 88721 62564 87416 60832 86236 58994 3/31/03 86422 59754 94872 65419 104813 72440 6/30/03 106490 73750 111523 78365 117674 81958 9/30/03 114940 80445 126744 87201 129540 90295 12/31/03 130534 92127 137306 96130 137928 96991 3/31/04 136996 97895 133641 92904 138984 94383 6/30/04 143395 98358 134635 91735 132709 91264 9/30/04 137804 95548 141718 97429 151969 105880 12/31/04 157448 109014 155199 104465 158198 106235 3/31/05 157448 103193 151013 97284 159385 103651 6/30/05 166084 107649 -------------------------------------------------------------------------------- COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Esco Technologies 2.9% FILTRATION & TEST EQUIPMENT 2. AmeriCredit 2.8% AUTO LENDING 3. Western Wireless 2.8% RURAL CELLULAR PHONE SERVICES 4. Edwards Lifesciences 2.5% HEART VALVES 5. Micros Systems 2.3% INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 6. Quicksilver Resources 2.3% NATURAL GAS & COAL SEAM GAS PRODUCER 7. ITT Educational Services 2.1% POSTSECONDARY DEGREE PROGRAMS 8. Crown Castle International 2.1% COMMUNICATION TOWERS 9. Abercrombie & Fitch 2.0% TEEN APPAREL RETAILER 10. HCC Insurance Holdings 1.6% SPECIALTY 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 was down 0.96% for the quarter, slightly below the S&P/Citigroup World ex-US Cap Range $2-10B Index's negative return of 0.29%. The Fund was practically in line with the large-cap MSCI EAFE Index, which declined 1.01%. Most of these negative returns were due to a strong dollar that offset positively performing local equity markets. Year-to-date the Fund slightly underperformed the S&P/Citigroup World ex-US Cap Range $2-10B, posting a 0.58% return compared to the Index's 0.79% return, and was ahead of the MSCI EAFE negative return of 1.17%. Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. Argentina's Tenaris, a manufacturer of seamless pipes used by oil and gas producers and the Fund's fourth largest holding, continued its strong performance as the stock gained a bit over 30% in the second quarter. The stock was up 65% year-to-date. High oil prices continued to drive energy exploration and investment, and tight capacity in the seamless pipe industry gave Tenaris strong pricing power. Another large holding, SES Global, had a good quarter, up 19% due to continued demand for satellite services from the switch to HDTV. The company also indicated it will launch two new satellites which will increase its capacity even further. It also reported that it will buy back 10% of its outstanding shares, which highlights its strong balance sheet and cash flow. Utilities BKW Energie in Switzerland, a new holding this quarter, and Red Electrica in Spain were strong performers as well, up 12% and 11%, respectively. Two of the Fund's weaker performers this quarter were in Japan. Funai Electric was down 17% as margins were squeezed by hikes in raw material prices and there was increasing concern about the impact of a potentially stronger yen. After a very strong first quarter, Shimano, maker of bicycle components used by Lance Armstrong among others, gave back 15% as it guided its estimates down modestly due to a weaker European sales environment. In addition to BKW Energie, we also added two other new stocks, Gambro, which manufactures dialyzers and blood collection and separation equipment, and William Hill, a U.K. betting shop and internet gaming operator. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- JUPITER RISING Jupiter Telecommunications, or JCOM as it's called by the locals, is the largest cable service provider in Japan. JCOM went public in March 2005, but we were familiar with it long before then. JCOM is partially owned by Liberty Global, which has been a long-term holding of the Columbia Acorn Fund. Because fewer than 10% of the households in Japan have cable TV, JCOM is growing more than 15% annually. JCOM has finished building the network and is now able to sell a "triple play" of cable TV, high-speed internet, and telephone service with very little additional investment required. -------------------------------------------------------------------------------- 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: TENARIS, 4.0%; SES GLOBAL, 3.6%; BKW ENERGIE, 1.0%; RED ELECTRICA, 2.8%; FUNAI ELECTRIC, 1.6%; SHIMANO, 2.7%; GAMBRO, 0.7%; WILLIAM HILL, 1.1%; JUPITER TELECOMMUNICATIONS, 1.9%. 1-800-922-6769 14 COLUMBIA ACORN INTERNATIONAL SELECT >AT A GLANCE TICKER SYMBOL: ACFFX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------- YEAR TO LIFE OF DATE* 1 YEAR 5 YEARS FUND ---------------------------------------------- Returns before taxes 0.58% 15.96% -1.40% 9.77% -------------------------------------------------------------------------------- Returns after taxes 0.03 15.48 -1.50 9.62 on distributions -------------------------------------------------------------------------------- Returns after taxes 0.38 10.53 -1.21 8.52 on distributions and sale of fund shares -------------------------------------------------------------------------------- S&P/Citigroup World 0.79 17.64 6.64 8.75 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 tax impact of 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, 2005 [PIE CHART] Consumer Goods/Services 20.1% Finance 15.3% Other* 10.3% Information 14.5% Energy/Minerals 6.7% Health Care 4.8% Industrial Goods/Services 28.3% * Other includes short-term obligations, cash and other assets less liabilities of 4.3%. -------------------------------------------------------------------------------- THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT (CLASS Z) -------------------------------------------------------------------------------- >November 23, 1998 through June 30, 2005 This graph compares the results of $10,000 invested in Columbia Acorn International Select at inception on November 23, 1998 to the S&P/ 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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV ON 06/30/05: $17.84 TOTAL NET ASSETS OF THE FUND: $71.7 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------------------- 1 YEAR 5 YEARS LIFE OF FUND 15.96% -1.40% 9.77% [MOUNTAIN CHART] S&P/CITIGROUP COLUMBIA ACORN WORLD EX-US CAP INTERNATIONAL SELECT RANGE $2-10B -------------------- --------------- 11/23/1998 10000 10000 11/30/1998 10140 10045 12/31/1998 11000 10339 11790 10310 11590 10052 3/31/1999 11980 10449 12240 11032 12170 10567 6/30/1999 13110 10953 13511 11362 13771 11490 9/30/1999 13621 11530 14132 11535 16999 11864 12/31/1999 19975 12772 19665 12154 24245 12311 3/31/2000 23093 12680 21258 12172 18923 11976 6/30/2000 19853 12611 19469 12203 20266 12586 9/30/2000 19237 12168 18480 11791 16128 11440 12/31/2000 17309 11998 17874 11939 15826 11505 3/31/2001 13706 10607 14413 11391 14382 11293 6/30/2001 13763 10999 13062 10723 12778 10626 9/30/2001 10625 9392 11305 9769 11925 10118 12/31/2001 12280 10140 11650 9841 11508 9991 3/31/2002 11915 10562 12290 10756 12433 11097 6/30/2002 12047 10712 10746 9753 10950 9730 9/30/2002 10147 8859 10127 9017 10381 9476 12/31/2002 10452 9209 9944 8978 9528 8810 3/31/2003 9629 8660 10533 9425 11447 10101 6/30/2003 11527 10389 11710 10806 12218 11429 9/30/2003 12675 11900 13621 12819 13905 12927 12/31/2003 14820 13781 15094 14071 15745 14410 3/31/2004 15847 14970 15532 14460 15552 14420 6/30/2004 15958 14786 15591 14226 15591 14357 9/30/2004 16244 14818 16724 15317 17775 16528 12/31/2004 18398 17257 18266 17165 19246 17899 3/31/2005 18684 17445 18051 16941 18072 17043 6/30/2005 18506 17395 -------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Anglo Irish Bank (Ireland) 4.2% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Exel (United Kingdom) 4.1% GLOBAL LOGISTICS & FREIGHT FORWARDING 3. Neopost (France) 4.0% POSTAGE METER MACHINES 4. Tenaris (Argentina) 4.0% STEEL PIPE FOR OIL WELLS & PIPELINES 5. SES Global (France) 3.6% SATELLITE BROADCASTING SERVICES 6. Kuehne & Nagel (Switzerland) 3.0% FREIGHT FORWARDING/LOGISTICS 7. Depfa Bank (Ireland) 2.9% INTERNATIONAL PUBLIC SECTOR FINANCE 8. Komercni Banka (Czech Republic) 2.9% LEADING CZECH UNIVERSAL BANK 9. Red Electrica (Spain) 2.8% SPANISH POWER GRID 10. Swatch Group (Switzerland) 2.7% WATCH & ELECTRONICS MANUFACTURER 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 made up some ground from its weak first quarter. The Fund was up 5.45% in the second quarter and gained against its benchmarks. In the second quarter the S&P MidCap 400 Index was up 4.26% and the S&P 500 Index gained 1.37%. Year-to-date the Fund was down 0.14% versus the S&P 400's gain of 3.85% and the S&P 500's loss of 0.81%. Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. The Fund's biggest percentage winner for the quarter was Mine Safety Appliances (MSA), up 27% as strong demand for combat helmets from the U.S. army drove higher than expected earnings. The stock was a new purchase this quarter. MSA manufactures products designed to protect the safety and health of workers worldwide. Seven other stocks posted returns from 15% to 22% in the quarter. On the down side Harley-Davidson lost 14% in the quarter. Harley cut production and its earnings forecast and sales slowed for its heavy-weight bikes. We believe this hiccup will be overcome in the next several quarters. In addition to MSA, there were five new companies added to the portfolio during the quarter (Conseco, Nuveen Investments, Spartech, Tribune Company, and Worthington Industries) while three were sold (McAfee, Moodys, and Synopsys). We also lost a fourth company when Liberty Media International purchased United Global Communications. The combined company is now called Liberty Global and remains in the portfolio. We continue to search for the best risk/return investments for the Fund. As always, we appreciate your investment in Columbia Acorn Select. /s/ Ben Andrews Ben Andrews LEAD PORTFOLIO MANAGER -------------------------------------------------------------------------------- THE GAS GRILL GOURMET Worthington Industries is a steel processor and manufacturer of metal products such as pressure cylinders (Gas grill propane tanks) and metal framing used in commercial construction. Since 2000, Worthington has improved its manufacturing processes, sold underperforming businesses and made accretive acquisitions. Recent performance has been weak, as falling steel prices have hurt short-term profits due to losses on inventory held. However, unlike the steel mills, Worthington's long-term success is tied to volume growth rather than steel prices. We like Worthington's prospects due to its strong market position, reasonable valuation and opportunity for growth as the industry adopts metal framing for residential construction. While waiting for the market to recognize its value, we continue to collect a 4% dividend. -------------------------------------------------------------------------------- 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: MINE SAFETY APPLIANCES, 2.6%; HARLEY-DAVIDSON, 3.4%; CONSECO, 2.6%; NUVEEN INVESTMENTS, 2.4%; SPARTECH, 0.2%; TRIBUNE COMPANY, 1.1%; WORTHINGTON INDUSTRIES, 2.1%; MCAFEE, 0.0%; MOODYS, 0.0%; SYNOPSYS, 0.0%; LIBERTY MEDIA INTERNATIONAL, 0.0%; UNITED GLOBAL COMMUNICATIONS, 0.0%; LIBERTY GLOBAL, 2.8%. 1-800-922-6769 16 COLUMBIA ACORN SELECT >AT A GLANCE TICKER SYMBOL: ACTWX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------- YEAR LIFE OF TO DATE* 1 YEAR 5 YEARS FUND ---------------------------------------------- Returns before taxes -0.14% 10.23% 10.71% 14.04% -------------------------------------------------------------------------------- Returns after taxes -0.27 9.75 10.51 13.53 on distributions -------------------------------------------------------------------------------- Returns after taxes on -0.01 7.19 9.29 12.20 distributions and sale of fund shares -------------------------------------------------------------------------------- S&P MidCap 400 3.85 14.03 8.49 11.79 (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 tax impact of 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, 2005 [PIE CHART] Information 26.3% Other* 9.4% Finance 17.1% Industrial Goods/Services 8.7% Energy/Minerals 4.1% Health Care 5.0% Consumer Goods/Services 29.4% * Other includes short-term obligations, cash and other assets less liabilities of 9.4%. -------------------------------------------------------------------------------- THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS Z) -------------------------------------------------------------------------------- >November 23, 1998 through June 30, 2005 This graph compares the results of $50,000 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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV ON 06/30/05: $20.97 TOTAL NET ASSETS OF THE FUND: $1,510.5 MILLION AVERAGE ANNUAL TOTAL RETURN --------------------------------------- 1 YEAR 5 YEARS LIFE OF FUND 10.23% 10.71% 14.04% [MOUNTAIN CHART] COLUMBIA S&P ACORN SELECT MIDCAP 400 ------------ ---------- 11/23/1998 50000.00 50000.00 11/30/1998 50150.00 49556.40 12/31/1998 53550.00 55544.50 55000.00 53381.10 53550.00 50586.20 3/31/1999 57400.00 51999.30 63550.00 56101.00 63650.00 56344.20 6/30/1999 65200.00 59360.90 65950.00 58099.50 60300.00 56108.40 9/30/1999 60550.00 54375.40 64850.00 57146.40 66250.00 60145.80 12/31/1999 69240.00 63720.60 67370.00 61925.80 67774.30 66259.90 3/31/2000 70857.30 71805.50 67319.40 69298.10 65500.00 68433.40 6/30/2000 71599.00 69438.50 69656.60 70535.50 77156.40 78410.90 9/30/2000 78990.90 77874.10 79638.30 75233.30 71908.20 69554.50 12/31/2000 77325.90 74875.50 79569.70 76543.10 74918.10 72174.90 3/31/2001 72017.70 66808.90 77271.20 74178.90 81485.00 75906.50 6/30/2001 80116.90 75600.00 79350.80 74473.80 75629.50 72038.00 9/30/2001 71032.60 63077.40 72564.90 65867.60 80116.90 70767.50 12/31/2001 83512.60 74423.30 81867.50 74036.70 80112.80 74127.80 3/31/2002 82909.40 79426.80 78413.00 79055.40 80716.00 77722.10 6/30/2002 79345.20 72033.50 74300.40 65055.90 76109.90 65383.20 9/30/2002 72600.60 60115.60 76603.50 62720.50 80441.90 66349.10 12/31/2002 76987.30 63622.60 76658.30 61763.30 76877.60 60292.40 3/31/2003 78413.00 60800.60 82909.40 65214.90 87405.80 70619.60 6/30/2003 89708.80 71519.70 94040.70 74057.40 97934.00 77416.70 9/30/2003 95795.40 76231.50 99304.80 81995.60 98592.00 84852.30 12/31/2003 100555.00 86284.10 103317.00 88154.00 106024.00 90270.80 3/31/2004 105969.00 90654.10 102930.00 87678.50 104588.00 89497.20 6/30/2004 108013.00 91534.20 103317.00 87263.00 102488.00 87034.60 9/30/2004 104754.00 89612.10 108842.00 91045.90 115527.00 96467.80 12/31/2004 119233.00 100507.00 115057.00 97941.70 113534.00 101227.00 3/31/2005 112913.00 100107.00 108850.00 96216.00 114154.00 102010.00 6/30/2005 119063.00 104375.00 -------------------------------------------------------------------------------- COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. ITT Educational Services 5.5% POSTSECONDARY DEGREE PROGRAMS 2. Tellabs 5.1% TELECOMMUNICATIONS EQUIPMENT 3. Safeway 4.5% RETAIL FOOD & DRUG STORES 4. Abercrombie & Fitch 4.4% TEEN APPAREL RETAILER 5. Harley-Davidson 3.4% MOTORCYCLES & RELATED MERCHANDISE 6. TCF Financial 3.4% GREAT LAKES BANK 7. American Tower 3.3% COMMUNICATION TOWERS IN USA & MEXICO 8. Pride International 3.2% OFFSHORE DRILLING CONTRACTOR 9. Coach 3.1% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 10. Liberty Global 2.8% CATV HOLDING COMPANY 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 up 2.62% for the quarter and ended the six months up 1.44%. These returns were better than the Lipper Flexible Portfolio Funds Index and easily outperformed the S&P 500 Index, and were close to the Lehman Brothers U.S. Credit Intermediate Bond Index over the same time periods. (See Page 2 for results). Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. -------------------------------------------------------------------------------- RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND Equities 2ND SIX-MONTH WEIGHTINGS QUARTER RETURNS TO IN CATEGORY RETURNS 6/30/05 -------------------------------------------------------------------------------- Columbia 21% 4.07% 2.78% Acorn Fund -------------------------------------------------------------------------------- Columbia 15% 5.45% -0.14% Acorn Select -------------------------------------------------------------------------------- Columbia Growth 24% -0.58% -4.32% Stock Fund -------------------------------------------------------------------------------- Columbia Growth 25% 0.61% 0.55% & Income Fund -------------------------------------------------------------------------------- Columbia Mid Cap 15% 2.78% 3.74% Value Fund -------------------------------------------------------------------------------- WEIGHTED AVERAGE EQUITY RETURN 100% 2.08% 0.16% -------------------------------------------------------------------------------- Fixed Income 2ND SIX-MONTH WEIGHTINGS QUARTER RETURNS TO IN CATEGORY RETURNS 6/30/05 -------------------------------------------------------------------------------- Columbia Federal 30% 3.04% 2.74% Securities Fund -------------------------------------------------------------------------------- Columbia Intermediate 50% 2.65% 2.18% Bond Fund -------------------------------------------------------------------------------- Columbia High 20% 3.02% 1.18% Yield Fund -------------------------------------------------------------------------------- WEIGHTED AVERAGE 100% 2.84% 2.15% INCOME RETURN -------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND REBALANCING IN THE SECOND QUARTER -------------------------------------------------------------------------------- APRIL 14, 2005: 50% stock, 50% bond MAY 18, 2005: 45% stock, 55% bond JUNE 1, 2005: 40% stock, 60% bond -------------------------------------------------------------------------------- The first six-months of 2005 favored the Fund's small- and mid-cap stock funds, with the Columbia Mid Cap Value Fund delivering the best performance with a 3.74% return for the six-month period and 2.78% return for the quarter. Columbia Acorn Fund also contributed to performance delivering a 2.78% return year-to-date and a 4.07% return for the quarter. Despite the good performance from the small- and mid-cap funds, the equity portion was hurt by the negative year-to-date 4.32% return of Columbia Growth Stock Fund and its 0.58% loss for the quarter. Overall, Thermostat's bond portfolio, up 2.15%, outperformed the equity portion's return of 0.16%. As noted in the table below, the Fund had three reallocation triggers during the second quarter. We increased stock exposure in the portfolio in April. In May and June we increased the portfolio's bond exposure. Assets in Columbia Thermostat were just over $206 million at the end of the first half of 2005. With the Fund's third anniversary approaching on September 25, we have been pleased with the Fund's low-risk result and steady inflows. The Fund has performed as expected in the broad trading-range market we have experienced since its inception. We continue to believe Columbia Thermostat's investment strategy should keep a portion of your portfolio 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 18 COLUMBIA THERMOSTAT FUND >AT A GLANCE TICKER SYMBOL: COTZX PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (CLASS Z) -------------------------------------------------------------------------------- >through June 30, 2005 ------------------------------------------- YEAR TO LIFE OF DATE* 1 YEAR FUND ------------------------------------------- Returns before taxes 1.44% 7.79% 12.39% -------------------------------------------------------------------------------- Returns after taxes 0.92 6.45 11.71 on distributions -------------------------------------------------------------------------------- Returns after taxes on distribu- 1.08 5.26 10.32 tions and sale of fund shares -------------------------------------------------------------------------------- S&P 500 (pretax) -0.81 6.32 16.57 -------------------------------------------------------------------------------- Lehman U.S. Credit Intermediate 1.56 5.79 5.67 Bond Index (pretax) -------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds -0.36 6.70 13.52 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 tax impact of 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 THERMOSTAT FUND PORTFOLIO WEIGHTINGS -------------------------------------------------------------------------------- >as a % of assets in each investment category, as of June 30, 2005 [PIE CHART] STOCK MUTUAL FUNDS Columbia Acorn Fund 21% Columbia Acorn Select 15% Columbia Growth stock Fund 24% 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 (CLASS Z) -------------------------------------------------------------------------------- >September 25, 2002 through June 30, 2005 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. 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 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. 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. PERFORMANCE SHOWN HERE REPRESENTS PAST PERFORMANCE, WHICH 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 AND MONTH-END UPDATES. NAV ON 06/30/05: $13.06 TOTAL NET ASSETS OF THE FUND: $206.3 MILLION AVERAGE ANNUAL TOTAL RETURN ------------------------------- 1 YEAR LIFE OF FUND 7.79% 12.39% [MOUNTAIN CHART] COLUMBIA LEHMAN U.S. CREDIT LIPPER FLEXIBLE THERMOSTAT FUND S&P 500 INTERMEDIATE BOND PORTFOLIO --------------- ------- ------------------ --------------- 9/25/2002 10000 10000 10000 10000 9/30/2002 9850 9956 10043 10003 10220 10832 9962 10512 10700 11469 10045 10959 12/31/2002 10410 10796 10307 10579 10260 10513 10335 10398 10100 10355 10517 10294 3/31/2003 10190 10456 10539 10360 10710 11317 10684 10952 11200 11913 10957 11490 6/30/2003 11348 12065 10963 11609 11418 12278 10626 11663 11648 12517 10659 11902 9/30/2003 11618 12384 10976 11912 12018 13085 10878 12380 12149 13200 10911 12510 12/31/2003 12471 13892 11019 13015 12643 14147 11108 13202 12785 14344 11231 13380 3/31/2004 12835 14128 11330 13323 12572 13906 11041 12989 12612 14097 10971 13079 6/30/2004 12813 14371 11011 13308 12620 13895 11123 12952 12701 13951 11339 13014 9/30/2004 12863 14102 11381 13225 13076 14318 11468 13407 13391 14897 11367 13885 12/31/2004 13614 15404 11469 14252 13520 15029 11502 14024 13645 15345 11440 14288 3/31/2005 13458 15073 11335 14035 13344 14787 11460 13778 13676 15258 11581 14096 6/30/2005 13810 15279 11648 14200 -------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND ASSET ALLOCATION -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2005 [PIE CHART] Stock Mutual Funds 39.9% Bond Mutual Funds 59.9% Cash and other Assets less Liabilities 0.2% 19 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- INFORMATION Advantech (Taiwan) 7,416,000 9,300,000 American Tower 3,000,000 3,500,000 Amis Holdings 0 1,071,000 ASE Test (Taiwan) 1,410,100 2,101,700 Cnet Networks 0 1,135,000 Crown Castle International 4,000,000 4,500,000 CTS 1,626,000 1,870,000 Diebold 0 375,000 Fair Isaac 1,110,000 1,316,000 Littelfuse 785,000 915,000 Navigant Consulting 1,336,000 1,836,000 Navteq 0 500,000 Novatek Microelectronics (Taiwan) 0 2,600,000 Outdoor Channel 0 460,000 RSA Security 2,000,000 3,000,000 SSA Global Technologies 0 928,000 Tellabs 9,300,000 9,540,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 2,265,000 2,300,000 Ann Taylor 1,093,000 1,223,000 Chico's FAS 4,990,000 5,090,000 Coinstar 1,290,000 1,440,000 Four Seasons Hotels (Canada) 0 314,000 Genesco 700,000 775,000 Knoll 777,000 1,384,000 Paddy Power (Ireland) 0 650,000 Petco Animal Supplies 1,245,000 1,445,000 Polaris Industries 550,000 850,000 Prestige Brands 350,000 657,000 Shimano (Japan) 610,000 780,000 Speedway Motorsports 553,000 933,000 Sports Authority 1,480,000 1,520,000 Vail Resorts 1,635,000 2,110,000 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industrie (Netherlands) 740,000 755,000 Administaff 1,150,000 1,300,000 Carbone Lorraine (France) 200,000 260,000 Drew Industries 0 390,000 Forward Air 1,500,000 2,000,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Gardner Denver 785,000 1,140,000 Genlyte Group 1,528,000 1,600,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Hexagon (Sweden) 30,000 120,000 (INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT) Kaydon 553,000 1,100,000 Mine Safety Appliances 1,300,000 1,440,000 Nordson 600,000 1,297,000 Quanta Services 1,700,000 2,481,000 Simpson 1,200,000 1,450,000 Spartech 3,000,000 3,150,000 Ultrapar (Brazil) 0 750,000,000 United Services Group (Netherlands) 675,000 740,000 Worthington Industries 1,050,000 1,700,000 ---------------------------------------------------------------------------- FINANCE Assurant 0 715,000 Independent Bank 152,000 252,000 Nuveen Investments 965,000 1,290,000 Paragon Group (United Kingdom) 0 1,950,000 Provident Bancorp 160,000 360,000 Scottish Re Group 1,250,000 1,500,000 United America Indemnity 700,000 1,300,000 ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 2,300,000 2,350,000 Fugro (Netherlands) 0 1,365,000 (INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT) McMoran Exploration 1,100,000 1,200,000 Pride International 2,100,000 2,300,000 Sociedad Quimica Y Minera de Chile (Chile) 32,800 275,000 Tipperary 2,265,000 2,320,000 Veritas DGC 374,000 700,000 Western Gas 3,000,000 3,200,000 1-800-922-6769 20 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ADDITIONS (CONTINUED) ---------------------------------------------------------------------------- HEALTH CARE Advanced Medical Optics 0 552,000 Arrow International 655,000 851,000 Cytokinetics 0 705,000 CYTYC 861,000 1,150,000 Datascope 0 261,000 Decode Genetics 0 1,900,000 Dendrite International 1,333,000 2,033,000 Exelixis 888,000 2,000,000 Intermagnetics General 750,000 1,180,000 Lexicon Genetics 2,000,000 3,100,000 Martek Biosciences 519,000 900,000 NPS Pharmaceuticals 776,000 1,176,000 Rigel Pharmaceuticals 0 675,000 Seattle Genetics 0 2,300,000 Serologicals 700,000 1,200,000 Tanox 0 1,500,000 ---------------------------------------------------------------------------- OTHER INDUSTRIES Diamondrock Hospitality 1,000,000 1,303,000 Gaylord Entertainment 0 475,000 Heartland Express 980,000 1,500,000 Kite Realty Group 0 717,000 SALES ---------------------------------------------------------------------------- INFORMATION 3Com 2,900,000 0 Corus Entertainment (Canada) 710,000 0 FTI Consulting 1,000,000 162,000 Global Payments 1,432,000 1,407,000 Insight Communications 2,700,000 2,430,000 International Game Technology 6,700,000 6,000,000 MAPICS 2,200,000 0 McAfee 1,448,000 0 Pericom Semiconductor 521,000 68,000 Radiant Systems 1,575,000 1,542,000 Trimble Navigation 1,200,000 1,000,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES AFC Enterprises 2,000,000 1,700,000 Amer Sports 1,110,000 0 Autogrill (Italy) 1,447,000 0 Esprit Holdings (Hong Kong) 2,250,000 0 Hunter Douglas (Netherlands) 248,000 0 Kappa Create (Japan) 388,000 366,000 Masonite International (Canada) 465,000 0 Monaco Coach 1,000,000 762,000 SCP Pool 1,989,000 1,689,000 Station Casinos 890,000 745,000 Wacoal (Japan) 1,000,000 789,000 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 SALES (CONTINUED) ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Cobham (United Kingdom) 500,000 0 Dominion Homes 572,000 0 Hub Group 304,000 0 Schulman 1,000,000 336,000 ---------------------------------------------------------------------------- FINANCE Anglo Irish Bank (Ireland) 6,657,588 6,243,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) BankFirst 19,000 0 Credito Emiliano (Italy) 1,000,000 0 Cullen Frost Bankers 370,000 0 Den Norske Bank (Norway) 2,150,000 1,670,000 FirstFed Financial 76,000 0 Midwest Bank 170,000 18,000 Stewart Information Services 340,000 0 Texas Regional Bancshares 1,190,000 0 Washington Federal 1,605,000 1,285,000 World Acceptance 1,820,000 1,700,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Equitable Resources 1,600,000 1,200,000 Hanover Compressor 1,200,000 0 Petrokazakhstan (Canada) 680,000 662,800 Quicksilver Resources 700,000 0 XTO Energy 9,000,000 5,000,000 ---------------------------------------------------------------------------- HEALTH CARE Ciphergen Biosystems 1,708,000 0 CTI Molecular Imaging 1,900,000 0 Myriad Genetics 460,000 0 SYRRX, Series C 461,000 0 VISX 1,000,000 0 ---------------------------------------------------------------------------- OTHER INDUSTRIES Allied Waste Industries 2,500,000 0 21 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 92.4% ------------------------------------------------------------------------------ INFORMATION: 21.9% SOFTWARE/SERVICES >BUSINESS SOFTWARE: 3.6% 1,900,000 Micros Systems (b) $ 85,025 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 11,500,000 Novell (b) 71,300 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 1,478,000 Kronos (b) 59,696 LABOR MANAGEMENT SOLUTIONS 847,000 Avid Technology (b) 45,128 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 3,448,000 Aspect Communications (b)(c) 38,721 CALL CENTER SOFTWARE 2,000,000 MRO Software (b)(c) 29,220 ENTERPRISE MAINTENANCE SOFTWARE 1,521,000 Sybase (b) 27,910 DATABASE SOFTWARE 2,200,000 JDA Software Group (b)(c) 25,036 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,300,000 Witness Systems (b) 23,699 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 6,700,000 E.Piphany (b)(c) 23,316 CRM SOFTWARE 1,542,000 Radiant Systems (b)(c) 17,579 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 460,000 Maximus 16,233 OUTSOURCER FOR LOCAL GOVERNMENT 3,000,000 Lawson Software (b) 15,450 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 5,000,000 Indus International (b)(c) 12,300 600,000 Indus International (b)(c) 1,476 ENTERPRISE ASSET MANAGEMENT SOFTWARE 6,000,000 Actuate (b)(c) 11,220 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 928,000 SSA Global Technologies (b) 11,136 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 1,250,000 ClickSoftware Technologies (b) 2,338 SERVICE CHAIN OPTIMIZATION SOFTWARE ------------------------------------------------------------------------------ 516,783 >BUSINESS INFORMATION/BUSINESS SERVICES/ PUBLISHING: 1.8% 1,200,000 Getty Images (b) 89,112 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,316,000 Fair Isaac 48,034 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 1,836,000 Navigant Consulting (b) 32,424 FINANCIAL CONSULTING FIRM 2,685,000 InfoUSA (c) 31,415 BUSINESS DATA FOR SALES LEADS 1,395,000 Ceridian (b) 27,175 HR SERVICES & PAYMENT PROCESSING 500,000 Navteq (b) 18,590 MAP DATA FOR ELECTRONIC DEVICES 350,000 Dex Media 8,544 YELLOW PAGES PUBLISHER NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ 1,700,000 PRIMEDIA (b) $ 6,885 SPECIALTY MAGAZINES & OTHER PUBLICATIONS 162,000 FTI Consulting (b) 3,386 FINANCIAL CONSULTING FIRM ------------------------------------------------------------------------------ 265,565 >TRANSACTION PROCESSORS: 1.0% 1,407,000 Global Payments 95,395 CREDIT CARD PROCESSOR 9,000,000 Hong Kong Exchanges & Clearing (Hong Kong) 23,312 HONG KONG EQUITY & DERIVATIVES OPERATOR 1,250,000 Pegasus Systems (b)(c) 13,938 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 600,000 Cubic 10,644 REVENUE COLLECTION & DEFENSE SYSTEMS ------------------------------------------------------------------------------ 143,289 >ELECTRONICS DISTRIBUTION: 0.9% 2,325,000 Avnet (b) 52,382 ELECTRONIC COMPONENTS DISTRIBUTION 730,000 CDW 41,676 TECHNOLOGY RESELLER 680,000 Tech Data (b) 24,895 I/T DISTRIBUTOR 710,000 Agilysys 11,147 I/T DISTRIBUTOR ------------------------------------------------------------------------------ 130,100 >INTERNET: 0.8% 3,000,000 RSA Security (b) 34,440 ENTERPRISE SECURITY SOFTWARE 9,500,000 Skillsoft Publishing (b)(c) 32,775 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,000,000 ValueClick (b) 24,660 INTERNET ADVERTISING 1,135,000 Cnet Networks (b) 13,325 INTERNET ADVERTISING ON NICHE WEBSITES 1,400,000 DoubleClick (b) 11,746 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 1,879,808 Vital Stream, Cl. C (b) 1,352 STREAMING SERVICES FOR THE INTERNET ------------------------------------------------------------------------------ 118,298 >COMPUTER SERVICES: 0.6% 4,000,000 Bearing Point (b) 29,320 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 5,000,000 Igate Capital (b)(c) 17,900 I/T & BPO OUTSOURCING SERVICES 4,600,000 AnswerThink Consulting (b)(c) 16,330 I/T INTEGRATION & BEST PRACTICE RESEARCH 2,000,000 Ciber (b) 15,960 SOFTWARE SERVICES & STAFFING 2,300,000 Analysts International (b)(c) 7,866 TECHNOLOGY STAFFING SERVICES 1,025,000 New Horizons Worldwide (b)(c) 3,587 COMPUTER TRAINING SERVICES ------------------------------------------------------------------------------ 90,963 1-800-922-6769 22 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >CONSUMER SOFTWARE: 0.3% 1,333,000 Activision (b) $ 22,021 ENTERTAINMENT SOFTWARE 700,000 THQ (b) 20,489 ENTERTAINMENT SOFTWARE ------------------------------------------------------------------------------ 42,510 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.4% 1,525,000 Unova (b) 40,611 BARCODE & WIRELESS LAN SYSTEMS 371,900 Neopost (France) 32,686 POSTAGE METER MACHINES 1,070,000 Avocent (b) 27,970 COMPUTER CONTROL SWITCHES 660,000 Rogers (b) 26,763 PCB LAMINATES & HIGH PERFORMANCE FOAMS 1,173,000 Belden CDT 24,868 SPECIALTY CABLE 1,870,000 CTS (c) 22,982 ELECTRONIC COMPONENTS, SENSORS & EMS 9,300,000 Advantech (Taiwan) 21,919 EMBEDDED COMPUTERS 2,100,000 Symbol Technologies 20,727 MOBILE COMPUTERS & BARCODE SCANNERS 1,070,000 II VI (b) 19,677 LASER COMPONENTS 230,000 Wincor Nixdorf (Germany) 18,791 RETAIL POS SYSTEMS & ATM MACHINES 400,000 Zebra Technologies (b) 17,516 BAR CODE PRINTERS 375,000 Diebold 16,916 AUTOMATED TELLER MACHINES 625,000 Excel Technologies (b)(c) 15,188 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 1,875,000 SeaChange International (b)(c) 13,163 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 480,000 Applied Films (b) 12,288 THIN-FILM GLASS COATING EQUIPMENT 5,000,000 Concurrent Computer (b)(c) 10,650 VIDEO ON DEMAND SYSTEMS & SERVICES 6,800,000 Phoenixtec Power (Taiwan) 7,295 UNINTERRUPTIBLE POWER SUPPLIES ------------------------------------------------------------------------------ 350,010 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.4% 1,510,000 Integrated Circuit Systems (b) 31,166 SILICON TIMING DEVICES 1,835,000 Semtech (b) 30,553 ANALOG SEMICONDUCTORS 1,905,000 IXYS (b)(c) 27,013 POWER SEMICONDUCTORS 915,000 Littelfuse (b) 25,483 LITTLE FUSES 2,000,000 Entegris (b) 19,800 SEMICONDUCTOR WAFER SHIPPING & HANDLING PRODUCTS 1,071,000 Amis Holdings (b) 14,287 ANALOG & MIXED: SIGNAL SEMICONDUCTORS NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ 10,000,000 Sunplus Technology (Taiwan) $ 13,997 FABLESS SEMICONDUCTOR DESIGNER 2,101,700 ASE Test (Taiwan) (b) 13,535 SEMICONDUCTOR PACKAGING & TEST SERVICES 2,600,000 Novatek Microelectronics (Taiwan) 11,055 LCD RELATED IC DESIGNER 565,000 Supertex (b) 9,978 MIXED-SIGNAL SEMICONDUCTORS 361,000 Actel (b) 5,018 FIELD PROGRAMMABLE GATE ARRAYS 68,000 Pericom Semiconductor (b) 554 INTERFACE INTEGRATED CIRCUITS ------------------------------------------------------------------------------ 202,439 >GAMING EQUIPMENT: 1.4% 6,000,000 International Game Technology 168,900 SLOT MACHINES & PROGRESSIVE JACKPOTS 1,050,000 Shuffle Master (b) 29,432 CARD SHUFFLERS & CASINO GAMES ------------------------------------------------------------------------------ 198,332 >INSTRUMENTATION: 0.9% 1,000,000 Trimble Navigation (b) 38,970 GPS-BASED INSTRUMENTS 711,000 Dionex (b) 31,007 ION & LIQUID CHROMATOGRAPHY 600,000 Mettler Toledo (b) 27,948 LABORATORY EQUIPMENT 2,300,000 Spectris (United Kingdom) 20,346 ELECTRONIC INSTRUMENTATION & CONTROLS 428,000 Varian (b) 16,174 ANALYTICAL INSTRUMENTS ------------------------------------------------------------------------------ 134,445 >CONTRACT MANUFACTURING: 0.5% 1,855,000 Jabil Circuit (b) 57,004 ELECTRONIC MANUFACTURING SERVICES 1,536,000 Plexus (b) 21,857 ELECTRONIC MANUFACTURING SERVICES ------------------------------------------------------------------------------ 78,861 TELECOMMUNICATIONS >TELECOMMUNICATION SERVICES: 2.7% 3,000,000 Western Wireless (b) 126,900 RURAL CELLULAR PHONE SERVICES 4,500,000 Crown Castle International (b) 91,440 COMMUNICATION TOWERS 3,500,000 American Tower (b) 73,570 COMMUNICATION TOWERS IN USA & MEXICO 800,000 Commonwealth Telephone 33,528 RURAL PHONE FRANCHISES & CLEC 780,000 Telephone & Data Systems 31,832 780,000 Telephone & Data Systems, Cl. S 29,905 CELLULAR & TELEPHONE SERVICES ------------------------------------------------------------------------------ 387,175 >TELECOMMUNICATIONS EQUIPMENT: 1.2% 9,540,000 Tellabs (b) 82,998 TELECOMMUNICATIONS EQUIPMENT 2,750,000 Andrew (b) 35,090 WIRELESS INFRASTRUCTURE EQUIPMENT 23 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >TELECOMMUNICATIONS EQUIPMENT--CONTINUED 960,000 Plantronics $ 34,906 COMMUNICATION HEADSETS 1,510,000 Symmetricom (b) 15,659 NETWORK TIMING & SYNCHRONIZATION DEVICES ------------------------------------------------------------------------------ 168,653 MEDIA >TELEVISION PROGRAMMING/CATV: 1.3% 1,700,000 Liberty Global (formerly known as Liberty Media International) (b) 79,339 CATV HOLDING COMPANY 35,506 Jupiter Telecommunications (Japan) (b) 29,835 LARGEST CABLE SERVICE PROVIDER IN JAPAN 2,430,000 Insight Communications (b) 26,852 CATV FRANCHISES IN MIDWEST 2,605,000 Liberty Media (b) 26,545 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 1,250,000 Mediacom Communications (b) 8,588 CABLE TELEVISION FRANCHISES 333,000 Alliance Atlantis Communication (b) (Canada) 7,814 CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION 460,000 Outdoor Channel (b) 6,330 CABLE TELEVISION PROGRAMMING ------------------------------------------------------------------------------ 185,303 >TV/SATELLITE BROADCASTING: 0.7% 3,307,000 SES Global (France) 49,778 SATELLITE BROADCASTING SERVICES 1,750,000 Gray Television 21,105 MID MARKET AFFILIATED TV STATIONS 2,200,000 Entravision Communications (b) 17,138 SPANISH LANGUAGE TV, RADIO & OUTDOOR 270,000 Metropole TV (France) 6,840 TELEVISION BROADCASTER 200,000 Young Broadcasting (b) 830 TELEVISION STATIONS ------------------------------------------------------------------------------ 95,691 >RADIO BROADCASTING: 0.4% 1,291,000 Salem Communications (b) 25,613 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 1,200,000 Cumulus Media, Cl. A (b) 14,136 RADIO STATIONS IN SMALL CITIES 992,000 Saga Communications (b) 13,888 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,200,000 Spanish Broadcasting (b) 11,988 SPANISH LANGUAGE RADIO STATIONS ------------------------------------------------------------------------------ 65,625 ----------- INFORMATION: TOTAL 3,174,042 ------------------------------------------------------------------------------ CONSUMER GOODS/SERVICES: 21.0% SERVICES >RETAIL: 6.8% 5,090,000 Chico's FAS (b) 174,485 WOMEN'S SPECIALTY RETAILER 3,200,000 Michaels Stores 132,384 CRAFT & HOBBY SPECIALTY RETAILER NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ 1,245,000 Abercrombie & Fitch $ 85,531 TEEN APPAREL RETAILER 2,300,000 Aeropostale (b) 77,280 MALL BASED TEEN RETAILER 3,743,000 Christopher & Banks (c) 68,347 WOMEN'S APPAREL RETAILER 1,400,000 Williams Sonoma (b) 55,398 HOME GOODS & FURNISHING RETAILER 1,520,000 Sports Authority (b)(c) 48,336 SPORTING GOODS STORES 826,000 Urban Outfitters (b) 46,826 APPAREL & HOME SPECIALTY RETAILER 1,445,000 Petco Animal Supplies (b) 42,367 PET SUPPLIES & SERVICES 1,072,000 Zale (b) 33,972 SPECIALTY RETAILER OF JEWELRY 1,300,000 Borders Group 32,903 BOOKSTORES 1,223,000 Ann Taylor (b) 29,694 WOMEN'S APPAREL RETAILER 775,000 Genesco (b) 28,745 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 230,000 Whole Foods Market 27,209 NATURAL FOOD SUPERMARKETS 1,370,000 Hot Topic (b) 26,194 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 958,000 Brookstone (b) 18,087 SPECIALTY CONSUMER PRODUCT RETAILER 955,000 West Marine (b) 17,247 LARGEST RETAILER OF BOATING SUPPLIES 300,000 Fast Retailing (Japan) 15,557 APPAREL RETAILER 350,000 Edgars Consolidated Stores (South Africa) 15,183 LEADING RETAIL CONGLOMERATE 1,062,000 Gaiam (b)(c) 7,392 HEALTHY LIVING CATALOGS & E-COMMERCE $ 6,000 Gadzooks 5% Convertible 10/07/08 (d)(f) 0 TEEN APPAREL RETAILER ------------------------------------------------------------------------------ 983,137 >CONSUMER SERVICES: 1.7% 2,250,000 ITT Educational Services (b) 120,195 POSTSECONDARY DEGREE PROGRAMS 775,000 Weight Watchers (b) 39,998 WEIGHT LOSS PROGRAMS 1,440,000 Coinstar (b)(c) 32,674 OWNER/OPERATOR OF COIN COUNTING MACHINES 1,530,000 Central Parking 21,037 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 870,000 Park 24 (Japan) 17,186 PARKING LOT OPERATOR 1,850,000 Princeton Review (b)(c) 10,786 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 7,614 NATIONAL CHAIN OF FITNESS CENTERS ------------------------------------------------------------------------------ 249,490 1-800-922-6769 24 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >CASINOS: 1.3% 745,000 Station Casinos $ 49,468 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 40,784 REGIONAL RIVERBOAT CASINOS 2,750,000 Alliance Gaming (b)(c) 38,555 DIVERSIFIED GAMING COMPANY 1,925,000 Pinnacle Entertainment (b) 37,653 REGIONAL RIVERBOAT CASINOS 4,500,000 Sky City Entertainment (New Zealand) 13,985 CASINO/ENTERTAINMENT COMPLEX 226,000 Lakes Entertainment (b) 3,480 NATIVE AMERICAN CASINO DEVELOPMENT ------------------------------------------------------------------------------ 183,925 >TRAVEL: 1.3% 2,110,000 Vail Resorts (b)(c) 59,291 OWNER/OPERATOR OF SKI RESORTS 1,814,500 Intrawest (Canada) 43,452 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 31,535 OWNER/FRANCHISER OF MID-PRICED HOTELS 314,000 Four Seasons Hotels (Canada) 20,755 LUXURY HOTEL OPERATOR 1,045,000 Navigant International (b)(c) 15,351 CORPORATE TRAVEL AGENCY 698,000 Jurys Doyle Hotel (Ireland) 13,088 OWNER/OPERATOR OF MID-PRICED HOTELS ------------------------------------------------------------------------------ 183,472 >ENTERTAINMENT/LEISURE PRODUCTS: 0.9% 905,000 International Speedway Motors 50,915 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,220,000 RC2 (b)(c) 45,835 COLLECTIBLES, TOYS & INFANT PRODUCTS 933,000 Speedway Motorsports 34,110 MOTORSPORT RACETRACK OWNER & OPERATOR 500,000 Callaway Golf 7,715 PREMIUM GOLF CLUBS & BALLS ------------------------------------------------------------------------------ 138,575 >RESTAURANTS: 0.3% 1,700,000 AFC Enterprises (c) 22,406 POPEYES RESTAURANTS 364,000 Cheesecake Factory (b) 12,642 CASUAL DINING RESTAURANTS 366,000 Kappa Create (Japan) 7,628 SUSHI CHAIN RESTAURANT OPERATOR ------------------------------------------------------------------------------ 42,676 >CRUISE LINES: 0.1% 400,000 Carnival 21,820 LARGEST CRUISE LINE ------------------------------------------------------------------------------ >GAMING: 0.1% 650,000 Paddy Power (Ireland) 11,093 IRISH BETTING SERVICES 690,000 Intralot (Greece) 10,526 LOTTERY & GAMING SYSTEMS & SERVICES ------------------------------------------------------------------------------ 21,619 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ GOODS >APPAREL: 2.4% 5,980,000 Coach (b) $ 200,749 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 844,000 Oxford Industries (c) 36,334 BRANDED & PRIVATE LABEL APPAREL 3,000,000 Billabong International (Australia) 30,993 ACTION SPORTS APPAREL BRAND MANAGER 469,000 Carter's (b) 27,380 CHILDREN'S BRANDED APPAREL 400,000 Columbia Sportswear (b) 19,756 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES 728,000 Steven Madden (b)(c) 12,929 WHOLESALER/RETAILER OF FASHION FOOTWEAR 789,000 Wacoal (Japan) 10,011 WOMEN'S SPECIALTY APPAREL 3,882,411 Pacific Brands (Australia) 6,669 AUSTRALIAN BRANDED APPAREL ------------------------------------------------------------------------------ 344,821 >FURNITURE/TEXTILES: 2.2% 2,200,000 HNI 112,530 OFFICE FURNITURE & FIREPLACES 765,000 Mohawk Industries (b) 63,113 CARPET & FLOORING 1,900,000 Herman Miller 58,596 OFFICE FURNITURE 2,130,000 Nobia (Sweden) 30,913 KITCHEN CABINET MANUFACTURING & DISTRIBUTION 844,000 American Woodmark (c) 25,328 KITCHEN CABINET MANUFACTURER 1,384,000 Knoll 23,680 OFFICE FURNITURE ------------------------------------------------------------------------------ 314,160 >NONDURABLES: 1.1% 895,000 Scotts Company (b) 63,733 CONSUMER LAWN & GARDEN PRODUCTS 1,689,000 SCP Pool 59,267 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 630,000 Natura Cosmeticos (Brazil) 20,103 DIRECT RETAILER OF COSMETICS 657,000 Prestige Brands (b) 12,812 OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS ------------------------------------------------------------------------------ 155,915 >LEISURE VEHICLES: 1.0% 1,745,000 Harley-Davidson 86,552 MOTORCYCLES & RELATED MERCHANDISE 850,000 Polaris Industries 45,900 LEISURE VEHICLES & RELATED PRODUCTS 762,000 Monaco Coach 13,099 RECREATIONAL VEHICLES 2,850,000 Ducati Motor (Italy) (b) 3,374 MOTORCYCLES & RELATED MERCHANDISE ------------------------------------------------------------------------------ 148,925 >FOOD & BEVERAGES: 0.9% 725,000 Orkla (Norway) 26,582 FOOD & DIVERSIFIED CONSUMER GOODS 25 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >FOOD & BEVERAGES--CONTINUED 1,000,000 Kerry (Ireland) $ 24,662 FOOD INGREDIENTS 850,000 NBTY (b) 22,049 VITAMINS & SUPPLEMENTS 30,000,000 Global Bio-Chem Technology Group (China) 18,578 1,700,000 Global Bio-Chem Technology Group Warrants (China) 28 REFINER OF CORN-BASED COMMODITIES 3,000,000 Lion Nathan (Australia) 17,247 BEER BREWER/DISTRIBUTOR 1,800,000 Davide Campari (Italy) 13,152 SPIRITS & WINE 900,000 IAWS (Ireland) 12,574 BAKED GOODS ------------------------------------------------------------------------------ 134,872 >DURABLE GOODS: 0.9% 1,316,000 Helen of Troy (b) 33,505 HAIRDRYERS & CURLING IRONS 465,000 Hyundai Mobis (South Korea) 31,116 AUTO PARTS 10,000,000 Techtronic Industries (Hong Kong) 25,191 POWER TOOLS & MOTORIZED APPLIANCES 780,000 Shimano (Japan) 22,133 BICYCLE COMPONENTS & FISHING TACKLE 133,000 Funai Electric (Japan) 13,599 CONSUMER ELECTRONICS ------------------------------------------------------------------------------ 125,544 ----------- CONSUMER GOODS/SERVICES: TOTAL 3,048,951 ------------------------------------------------------------------------------ INDUSTRIAL GOODS/SERVICES: 15.4% >MACHINERY: 2.5% 1,050,000 Esco Technologies (b)(c) 105,840 FILTRATION & TEST EQUIPMENT 2,250,000 Ametek 94,162 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,297,000 Nordson 44,461 DISPENSING SYSTEMS FOR ADHESIVES & COATINGS 1,140,000 Gardner Denver (b)(c) 39,991 AIR COMPRESSORS, BLOWERS & PUMPS 840,000 Pentair 35,960 PUMPS, WATER TREATMENT & TOOLS 1,100,000 Kaydon 30,635 SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS 106,000 Oshkosh Truck 8,298 SPECIALTY TRUCK MANUFACTURER 150,000 Tennant 5,312 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT ------------------------------------------------------------------------------ 364,659 >INDUSTRIAL GOODS: 2.2% 3,200,000 Clarcor (c) 93,600 MOBILE & INDUSTRIAL FILTERS 1,600,000 Genlyte Group (b)(c) 77,984 COMMERCIAL LIGHTING FIXTURES 1,440,000 Mine Safety Appliances 66,528 SAFETY EQUIPMENT NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ 2,000,000 Donaldson $ 60,660 INDUSTRIAL AIR FILTRATION 390,000 Drew Industries (b) 17,706 RV & MFG HOME COMPONENTS 3,000,000 Electric City (b)(c) 2,760 ELECTRICITY CONSERVATION DEVICES ------------------------------------------------------------------------------ 319,238 >LOGISTICS: 2.0% 2,750,000 Expeditors International of Washington 136,978 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 62,658 GLOBAL LOGISTICS & FREIGHT FORWARDING 2,000,000 Forward Air (c) 56,540 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 2,600,000 Exel (United Kingdom) 39,359 GLOBAL LOGISTICS & FREIGHT FORWARDING ------------------------------------------------------------------------------ 295,535 >INDUSTRIAL DISTRIBUTION: 1.9% 2,286,000 Watsco (c) 97,384 HVAC DISTRIBUTION 1,925,000 Airgas 47,490 INDUSTRIAL GAS DISTRIBUTOR 3,800,000 Grafton Group (Ireland) (b) 43,973 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 1,200,000 Hughes Supply 33,720 INDUSTRIAL DISTRIBUTION 1,031,000 Nuco2 (b)(c) 26,466 BULK CO 2 GAS DISTRIBUTION TO RESTAURANTS 600,000 Aviall (b) 18,954 AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR ------------------------------------------------------------------------------ 267,987 >CONSTRUCTION: 1.3% 738,000 Florida Rock Industries 54,132 CONCRETE & AGGREGATES 1,450,000 Simpson 44,298 WALL JOINT MAKER 787,500 Wienerberger (Austria) 36,494 BRICKS & CLAY ROOFING TILES 42,500 Geberit International (Switzerland) 27,119 PLUMBING SUPPLIES 380,000 Daito Trust Construction (Japan) 14,190 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) 10,358 AFFORDABLE HOUSING BUILDER ------------------------------------------------------------------------------ 186,591 >STEEL: 1.2% 2,850,000 Gibraltar Industries (c) 52,839 STEEL PROCESSING 600,000 Tenaris (Argentina) 46,962 STEEL PIPE FOR OIL WELLS & PIPELINES 158,000 Vallourec (France) 45,368 SEAMLESS TUBES 1,700,000 Worthington Industries 26,860 STEEL PROCESSING ------------------------------------------------------------------------------ 172,029 1-800-922-6769 26 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >OUTSOURCING SERVICES & TRAINING: 1.1% 1,800,000 Labor Ready (b) $ 41,958 TEMPORARY MANUAL LABOR 1,300,000 Administaff (c) 30,888 PROFESSIONAL EMPLOYER ORGANIZATION 635,000 Bilfinger Berger (Germany) 29,560 CONSTRUCTION & RELATED SERVICES 2,481,000 Quanta Services (b) 21,833 ELECTRICAL & TELECOM CONSTRUCTION SERVICES 740,000 United Services Group (Netherlands) 19,528 TEMPORARY STAFFING SERVICES 565,000 Meitec (Japan) 17,341 STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS 600,000 GP Strategies (b) 4,884 TRAINING PROGRAMS ------------------------------------------------------------------------------ 165,992 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.1% 3,150,000 Spartech (c) 56,070 PLASTICS DISTRIBUTION & COMPOUNDING 450,000 Novozymes (Denmark) 22,233 INDUSTRIAL ENZYMES 35,000 Sika (Switzerland) (b) 21,784 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 200,000 Imerys (France) 13,748 INDUSTRIAL MINERALS PRODUCER 750,000,000 Ultrapar (Brazil) 13,111 SPECIALTY CHEMICALS & LIQUID PROPANE GAS DISTRIBUTION 260,000 Carbone Lorraine (France) 12,337 ADVANCED INDUSTRIAL MATERIALS 20,000 Givaudan (Switzerland) 11,600 INDUSTRIAL FRAGRANCES & FLAVORS 336,000 Schulman 6,011 PLASTICS DISTRIBUTION & COMPOUNDING ------------------------------------------------------------------------------ 156,894 >WATER: 1.1% 856,000 Cuno (b) 61,153 FILTRATION & FLUIDS CLARIFICATION 3,000,000 Tetra Tech (b)(c) 40,590 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 1,080,000 Pall 32,789 FILTRATION & FLUIDS CLARIFICATION 554,000 Watts Water Technologies 18,553 WATER, VALVES, REGULATORS & FILTRATION ------------------------------------------------------------------------------ 153,085 >OTHER INDUSTRIAL SERVICES: 0.5% 825,000 Mobile Mini (b)(c) 28,446 LEASES PORTABLE STORAGE UNITS 1,500,000 Clark (c) 21,495 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 35,000 Schindler (Switzerland) 12,598 ELEVATOR MANUFACTURER & SERVICE PROVIDER 300,000 IMTech (Netherlands) 10,484 TECHNICAL ENGINEERING 185,000 Jaakko Poyry (Finland) 5,538 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY ------------------------------------------------------------------------------ 78,561 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >CONGLOMERATES: 0.4% 755,000 Aalberts Industrie (Netherlands) $ 34,500 FLOW CONTROL & HEAT TREATMENT 5,550 Pargesa (Switzerland) 20,226 INDUSTRIAL & MEDIA HOLDINGS 120,000 Hexagon (Sweden) 2,422 MEASUREMENT EQUIPMENT & POLYMERS ------------------------------------------------------------------------------ 57,148 >ELECTRICAL COMPONENTS: 0.1% 1,125,000 Ushio (Japan) 19,937 INDUSTRIAL LIGHT SOURCES ------------------------------------------------------------------------------ ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 2,237,656 ------------------------------------------------------------------------------ FINANCE: 12.1% >BANKS: 4.6% 2,712,000 Associated Banc-Corp 91,286 MIDWEST BANK 3,502,000 TCF Financial 90,632 GREAT LAKES BANK 1,958,000 BOK Financial 90,303 SOUTHWEST MIDDLE MARKET BANK 6,243,000 Anglo Irish Bank (Ireland) 77,328 SMALL BUSINESS & MIDDLE MARKET BANKING 2,734,000 Glacier Bancorp (c) 71,439 MOUNTAIN STATES BANK 1,320,000 West Coast Bancorp (c) 32,221 PORTLAND SMALL BUSINESS LENDER 250,000 Komercni Banka (Czech Republic) 31,314 LEADING CZECH UNIVERSAL BANK 1,850,000 Depfa Bank (Ireland) 29,563 INTERNATIONAL PUBLIC SECTOR FINANCE 1,516,000 Republic 22,710 MICHIGAN BANK 756,000 Chittenden 20,563 VERMONT & WESTERN MASSACHUSETTS BANK 640,000 Great Southern Bancorp 20,026 MISSOURI REAL ESTATE LENDER 1,670,000 Den Norske Bank (Norway) 17,305 LARGEST NORWEGIAN BANK 510,000 CityBank Lynnwood (c) 15,820 SEATTLE REAL ESTATE LENDER 551,000 West Bancorporation 10,359 DES MOINES COMMERCIAL BANK 256,000 First Financial BankShares 8,663 WEST TEXAS BANK 336,000 Sterling Bancorp 7,174 NEW YORK CITY NICHE LENDER 252,000 Independent Bank 7,167 MICHIGAN BANK 382,000 Cascade Financial 6,303 SEATTLE COMMUNITY BANK 242,000 First Mutual Bancshares 6,268 SEATTLE COMMUNITY BANK 200,000 S Y Bancorp 4,570 LOUISVILLE BANK 27 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >BANKS--CONTINUED 18,000 Midwest Bank $ 347 CHICAGO BANK ------------------------------------------------------------------------------ 661,361 >INSURANCE: 2.7% 575,000 Philadelphia Consolidated Holding (b) 48,737 SPECIALTY INSURANCE 1,169,000 Leucadia National 45,158 INSURANCE HOLDING COMPANY 995,000 Protective Life 42,009 LIFE INSURANCE 1,020,000 HCC Insurance Holdings 38,627 SPECIALTY INSURANCE 109,000 Markel (b) 36,951 SPECIALTY INSURANCE 1,500,000 Scottish Re Group 36,360 LIFE REINSURANCE 710,000 Selective Insurance Group 35,181 COMMERCIAL & PERSONAL LINES INSURANCE 715,000 Assurant 25,811 SPECIALTY INSURANCE 570,000 RLI 25,422 SPECIALTY INSURANCE 1,300,000 United America Indemnity (b) 22,347 SPECIALTY INSURANCE 560,000 Endurance Specialty Holdings 21,179 COMMERCIAL LINES INSURANCE/REINSURANCE 210,000 StanCorp Financial 16,082 GROUP LIFE & DISABILITY INSURANCE ------------------------------------------------------------------------------ 393,864 >FINANCE COMPANIES: 1.7% 5,831,000 AmeriCredit (b) 148,690 AUTO LENDING 1,700,000 World Acceptance (b)(c) 51,085 PERSONAL LOANS 1,100,000 Intermediate Capital (United Kingdom) 20,527 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 1,000,000 Northgate (United Kingdom) 16,181 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 1,950,000 Paragon Group (United Kingdom) 14,755 UK BUY-TO-LET FINANCE COMPANY ------------------------------------------------------------------------------ 251,238 >SAVINGS & LOANS: 1.7% 4,081,000 Peoples Bank Bridgeport 123,409 CONNECTICUT SAVINGS & LOAN 1,178,000 Anchor Bancorp Wisconsin (c) 35,646 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 34,510 PREMIER MORTGAGE LENDER IN INDIA 1,285,000 Washington Federal 30,223 OLD FASHIONED THRIFT 200,000 Bankinter (Spain) 10,197 MORTGAGE LENDER 360,000 Provident Bancorp 4,360 NEW YORK STATE THRIFT ------------------------------------------------------------------------------ 238,345 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >MONEY MANAGEMENT: 1.3% 2,355,000 SEI Investments $ 87,959 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT 2,390,000 Eaton Vance 57,145 SPECIALTY MUTUAL FUNDS 1,290,000 Nuveen Investments 48,530 SPECIALTY MUTUAL FUNDS ------------------------------------------------------------------------------ 193,634 >BROKERAGE: 0.1% 690,000 Investment Technology Group (b) 14,504 ELECTRONIC TRADING ------------------------------------------------------------------------------ ----------- FINANCE: TOTAL 1,752,946 ------------------------------------------------------------------------------ ENERGY/MINERALS: 9.4% >OIL/GAS PRODUCERS: 5.0% 5,000,000 XTO Energy 169,950 NATURAL GAS PRODUCER 3,000,000 Talisman Energy (Canada) 112,198 OIL & GAS PRODUCER 3,200,000 Western Gas 111,680 OIL PRODUCER & COAL SEAM GAS PRODUCER 3,400,000 Ultra Petroleum (b) 103,224 NATURAL GAS PRODUCER 15,400,000 Tullow Oil (United Kingdom) 51,333 OIL & GAS PRODUCER 1,000,000 Southwestern Energy (b) 46,980 NATURAL GAS PRODUCER 700,000 Denbury Resources (b) 27,839 OIL PRODUCER USING CO2 INJECTION 1,000,000 Range Resources 26,900 OIL & GAS PRODUCER 662,800 Petrokazakhstan (Canada) 24,245 OIL PRODUCER & REFINER IN KAZAKHSTAN 1,200,000 McMoran Exploration (b) 23,412 NATURAL GAS PRODUCERS & LNG DEVELOPER 2,320,000 Tipperary (b)(c) 14,500 COAL SEAM GAS PRODUCER 3,200,000 Vaalco Energy (b)(c) 11,072 OIL & GAS PRODUCER ------------------------------------------------------------------------------ 723,333 >OIL SERVICES: 2.7% 2,350,000 FMC Technologies (b) 75,130 OIL & GAS WELL HEAD MANUFACTURER 2,300,000 Pride International (b) 59,110 OFFSHORE DRILLING CONTRACTOR 500,000 Carbo Ceramics 39,480 NATURAL GAS WELL STIMULANTS 5,000,000 Newpark Resources (b)(c) 37,500 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 1,600,000 Chicago Bridge & Iron 36,576 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 1,365,000 Fugro (Netherlands) 33,877 SURVEY & GPS SERVICES 2,400,000 Key Energy Services (b) 29,040 OIL & GAS WELL WORKOVER SERVICES 1-800-922-6769 28 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >OIL SERVICES--CONTINUED 1,350,000 Enerflex Systems (Canada) (c) $ 27,719 NATURAL GAS COMPRESSOR 2,000,000 Saipem (Italy) 26,856 OFFSHORE CONSTRUCTION & DRILLING 700,000 Veritas DGC (b) 19,418 GEOPHYSICAL CONTRACTOR 168,000 Pioneer Drilling (b) 2,564 OIL & GAS WELL DRILLER ------------------------------------------------------------------------------ 387,270 >DISTRIBUTION/MARKETING/REFINING: 1.2% 1,200,000 Equitable Resources 81,600 NATURAL GAS PRODUCER & UTILITY 1,900,000 Oneok 62,035 NATURAL GAS UTILITY, MARKETING & PROCESSING 1,206,000 Atmos Energy 34,733 NATURAL GAS UTILITY ------------------------------------------------------------------------------ 178,368 >MINING: 0.5% 1,440,000 Xstrata (United Kingdom) 27,666 DIVERSIFIED MINING HOLDING COMPANY 275,000 Sociedad Quimica Y Minera de Chile (Chile) 27,500 PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM & IODINE 900,000 Noranda (Canada) 15,414 DIVERSIFIED MINING HOLDING COMPANY 1,000,000 Ivanhoe Mines (Canada) (b) 7,757 COPPER MINING IN MONGOLIA ------------------------------------------------------------------------------ 78,337 ----------- ENERGY/MINERALS: TOTAL 1,367,308 ------------------------------------------------------------------------------ HEALTH CARE: 8.6% >SERVICES: 2.9% 2,491,000 Lincare Holdings (b) 101,732 HOME HEALTH CARE SERVICES 1,370,000 Charles River Laboratories (b) 66,102 PHARMACEUTICAL RESEARCH 821,000 Coventry Health Care (b) 58,086 PPO NETWORK 2,592,000 NDCHealth Group (c) 46,578 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 3,470,000 Gambro (Sweden) 46,304 PRODUCTS & SERVICES FOR RENAL CARE 510,000 OPG Groep (Netherlands) 35,513 HEALTHCARE SUPPLIES & PHARMACIES 2,033,000 Dendrite International (b) 28,055 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 1,200,000 Serologicals (b) 25,500 BLOOD COLLECTION & ANTIBODY PRODUCTION 236,000 Omega Pharma (Belgium) 12,184 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 440,000 Medquist (b) 5,852 MEDICAL TRANSCRIPTION SERVICES ------------------------------------------------------------------------------ 425,906 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.7% 1,629,000 Edwards Lifesciences (b) 70,080 HEART VALVES NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ 1,240,000 Diagnostic Products $ 58,689 IMMUNODIAGNOSTIC KITS 1,180,000 Intermagnetics General (b) 36,297 MRI EQUIPMENT 851,000 Arrow International 27,147 DISPOSABLE CATHETERS 1,150,000 CYTYC (b) 25,369 CONSUMABLES RELATED TO WOMEN'S HEALTH 583,000 Orthofix International (b) 25,092 BONE FIXATION & STIMULATION DEVICES 365,000 Essilor International (France) 24,838 EYEGLASS LENSES 714,000 ICU Medical (b)(c) 22,969 INTRAVENOUS THERAPY PRODUCTS 552,000 Advanced Medical Optics (b) 21,942 MEDICAL DEVICES FOR EYE CARE 875,000 Viasys Healthcare (b) 19,766 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 390,000 Hogy Medical (Japan) 17,395 DISPOSABLE SURGICAL PRODUCTS 350,000 Haemonetics (b) 14,224 BLOOD & PLASMA COLLECTION EQUIPMENT 125,000 Synthes (Switzerland) 13,679 PRODUCTS FOR ORTHOPEDIC SURGERY 261,000 Datascope 8,704 MEDICAL DEVICES ------------------------------------------------------------------------------ 386,191 >BIOTECHNOLOGY/DRUG DELIVERY: 2.2% 880,000 Neurocrine Biosciences (b) 37,013 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 900,000 Martek Biosciences (b) 34,155 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 1,350,000 DOV Pharmaceutical (b)(c) 25,191 DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION 2,400,000 Pozen (b)(c) 19,680 DRUGS FOR MIGRAINES 1,179,000 AtheroGenics (b) 18,840 DRUGS FOR ATHEROSCLEROSIS 1,900,000 Decode Genetics (b) 17,841 DRUGS FOR HEART ATTACK, ASTHMA & VASCULAR DISEASE 1,055,000 Nektar Therapeutics (b) 17,766 DRUG DELIVERY TECHNOLOGIES 1,500,000 Tanox (b) 17,580 DRUGS FOR ASTHMA & HIV 2,000,000 Medarex (b) 16,660 HUMANIZED ANTIBODIES 3,100,000 Lexicon Genetics (b) 15,314 DRUG DISCOVERY 2,000,000 Exelixis (b) 14,860 TREATMENTS FOR CANCER & METABOLIC DISORDERS 675,000 Rigel Pharmaceuticals (b) 13,446 DRUGS FOR HAY FEVER, ASTHMA, HEPATITIS & CANCER 1,176,000 NPS Pharmaceuticals (b) 13,348 DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM 2,300,000 Seattle Genetics (b)(c) 12,328 ANTIBODY-BASED THERAPIES FOR CANCER 1,200,000 Ligand Pharmaceuticals (b) 8,340 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 865,000 Arena Pharmaceuticals (b) 5,899 NOVEL DRUG TARGETING TECHNOLOGY 29 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 705,000 Cytokinetics (b) $ 4,900 DRUGS FOR CANCER & HEART FAILURE 5,500,000 La Jolla Pharmaceutical (b)(c) 4,510 LUPUS TREATMENT 635,000 Maxygen (b) 4,356 MOLECULAR BREEDING 1,875,000 Locus Discovery, Series D, Pfd. (d)(f) 3,750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 638,000 Diversa (b) 3,324 MOLECULAR BREEDING 1,249,999 Perlegen Sciences (d)(f) 2,632 LARGE SCALE GENE SEQUENCING 359,944 Microdose (d)(f) 270 DRUG INHALERS ------------------------------------------------------------------------------ 312,003 >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) 31,494 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 21,028 DISTRIBUTION OF MEDICAL SUPPLIES ------------------------------------------------------------------------------ 52,522 >HOSPITAL MANAGEMENT: 0.2% 500,000 Rhoen-Klinikum (Germany) 34,626 HOSPITAL MANAGEMENT ------------------------------------------------------------------------------ >PHARMACEUTICALS: 0.2% 500,000 Par Pharmaceuticals (b) 15,905 GENERICS 3,495,000 United Drug (Ireland) 14,996 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER ------------------------------------------------------------------------------ 30,901 ----------- HEALTH CARE: TOTAL 1,242,149 ------------------------------------------------------------------------------ OTHER INDUSTRIES: 4.0% >REAL ESTATE: 2.6% 1,320,000 General Growth Properties 54,239 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 49,112 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 635,000 Macerich Company 42,577 REGIONAL SHOPPING MALLS 650,000 SL Green Realty 41,925 MANHATTAN OFFICE BUILDINGS 620,000 Mills 37,690 REGIONAL SHOPPING MALLS 575,000 Federal Realty Investment Trust 33,925 SHOPPING CENTERS 2,552,000 Highland Hospitality (c) 26,668 HOTEL REAL ESTATE INVESTMENT TRUST 1,375,000 Crescent Real Estate Equities 25,781 CLASS A OFFICE BUILDINGS 475,000 Gaylord Entertainment (b) 22,083 CONVENTION HOTELS NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ 1,355,000 Sponda (Finland) $ 13,928 OFFICE & WAREHOUSE PROPERTY COMPANY 1,000,000 Diamondrock Hospitality 144A (b)(d) 11,300 303,000 Diamondrock Hospitality 3,424 HOTEL REAL ESTATE INVESTMENT TRUST 717,000 Kite Realty Group 10,755 COMMUNITY SHOPPING CENTERS 37,407 Security Capital European Realty (Luxembourg) (d)(f) 527 SELF STORAGE PROPERTIES ------------------------------------------------------------------------------ 373,934 >TRANSPORTATION: 0.6% 1,500,000 Heartland Express 29,145 REGIONAL TRUCKER 720,000 Grupo Aeroportaurio Del Sureste (Mexico) 22,932 CANCUN & COZUMEL AIRPORT OPERATOR 18,000,000 Comfort Del Gro (Singapore) 17,993 TAXI & MASS TRANSIT SERVICE 70,000 Kobenhavns Lufthavne (Denmark) 16,569 COPENHAGEN AIRPORT AUTHORITY ------------------------------------------------------------------------------ 86,639 >REGULATED UTILITIES: 0.4% 1,650,000 Northeast Utilities 34,419 REGULATED ELECTRIC UTILITY 989,800 Red Electrica (Spain) 27,320 SPANISH POWER GRID ------------------------------------------------------------------------------ 61,739 >WASTE MANAGEMENT: 0.4% 1,500,000 Waste Connections (b) 55,935 SOLID WASTE MANAGEMENT ------------------------------------------------------------------------------ ----------- OTHER INDUSTRIES TOTAL 578,247 TOTAL COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 92.4% ----------- (COST: $7,966,904) 13,401,299 SHORT-TERM OBLIGATIONS: 7.6% $ 125,000 Aluminum Company America 3.08% - 3.24% Due 7/12/05 - 8/3/05 124,790 107,000 Toyota Motor Credit 3.04% - 3.21% Due 7/13/05 - 8/4/05 106,831 99,000 SBC Communications 3.10% - 3.14% Due 7/7/05 - 7/26/05 98,859 85,000 HSBC Finance Corp 3.23% - 3.25% Due 8/5/05 - 8/10/05 84,713 78,000 Verizon Network 2.74% Due 4/26/05 77,840 73,000 General Electric Capital Services 3.08% - 3.20% - Due 7/21/05 - 8/01/25 72,846 1-800-922-6769 30 PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ SHORT-TERM OBLIGATIONS--CONTINUED $ 63,000 American General Finance 3.13% - 3.26% Due 7/19/05 - 8/9/05 $ 62,846 62,000 Hewlett Packard 3.14% - 3.16% - Due 7/27/05 - 7/28/05 61,856 45,000 American Express Credit 3.06% Due 7/11/05 44,962 45,000 Prudential Funding 3.09% Due 7/22/05 44,919 45,000 LaSalle Bank 3.14% Due 7/25/05 44,906 45,000 Verizon Global Funding 3.21% - Due 8/2/05 44,872 43,000 Marshall + Ilsley 3.17% Due 7/29/05 42,894 40,000 Campbell Soup Company 3.04% Due 7/8/05 39,976 35,000 General Electric Capital Corporate 3.01% Due 7/1/05 35,000 35,000 Eaton Company 3.03% Due 7/6/05 34,985 35,000 Countrywide Funding 3.29% Due 8/11/05 34,869 34,000 AIG Funding 3.11% - Due 7/18/05 33,950 6,597 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $6,733 (repurchase proceeds: $6,598) 6,597 ------------------------------------------------------------------------------ (AMORTIZED COST: $1,098,511) 1,098,511 ----------- TOTAL INVESTMENTS: 100.0% 14,499,810 (COST: $9,065,415)(a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,997 ----------- TOTAL NET ASSETS: 100% $14,502,807 ============================================================================== 31 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purposes cost of investments was $9,065,415 and net unrealized appreciation was $5,434,395 consisting of gross unrealized appreciation of $5,840,365 and gross unrealized depreciation of $405,970. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: AnswerThink Consulting 10.71% Christopher & Banks 10.46 Spartech 9.87 New Horizons Worldwide 9.80 Indus International 9.75 Actuate 9.66 Gibraltar Industries 9.59 Igate Capital 9.51 Analysts International 9.27 World Acceptance 9.07 West Coast Bancorp 8.91 Skillsoft Publishing 8.89 Glacier Bancorp 8.75 E.Piphany 8.63 Watsco 8.32 Pozen 8.29 Esco Technologies 8.26 Clark 8.15 MRO Software 7.90 Concurrent Computer 7.85 JDA Software Group 7.56 La Jolla Pharmaceutical 7.44 NDCHealth Group 7.18 Electric City 7.17 Gaiam 7.16 Bally Total Fitness 6.89 Nuco2 6.79 Navigant International 6.74 Princeton Review 6.71 SeaChange International 6.60 Highland Hospitality 6.37 Clarcor 6.20 Forward Air 6.18% Pegasus Systems 6.03 Enerflex Systems 6.00 Newpark Resources 5.93 RC2 5.93 DOV Pharmaceutical 5.93 Sports Authority 5.86 AFC Enterprises 5.78 Genlyte Group 5.76 IXYS 5.71 Vaalco Energy 5.69 Coinstar 5.66 Gardner Denver 5.66 Aspect Communications 5.62 Tipperary 5.60 Steven Madden 5.60 Mobile Mini 5.57 Seattle Genetics 5.45 Alliance Gaming 5.38 Tetra Tech 5.29 Radiant Systems 5.28 Excel Technologies 5.18 Anchor Bancorp Wisconsin 5.18 ICU Medical 5.16 American Woodmark 5.11 Administaff 5.09 CTS 5.08 CityBank Lynnwood 5.06 Vail Resorts 5.01 Oxford Industries 5.00 InfoUSA 5.00 The aggregate cost and value of these companies at June 30, 2005, was $1,549,261 and $1,988,672, respectively. Investments in affiliate companies represent 13.7% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005 were as follows: Dividend Income $ 14,830 Net realized gain or loss $ 1,653 Change in unrealized gain or loss $ (41,103) Purchases $ 156,956 Proceeds from sales $ 18,992 1-800-922-6769 32 (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. At June 30, 2005, these securities were illiquid. At June 30, 2005, these securities (in thousands) amounted to $18,479, which represents 0.13% of total net assets. Additional information on these securities is as follows:
ACQUISITION SHARES/ SECURITY DATES PAR (000) COST (000) VALUE (000) ---------------------------------------------------------------------------------------------- Diamondrock Hospitality 06/29/04 1,000,000 $ 10,000 $ 11,300 Gadzooks 5% Convertible 10/07/08 10/08/03 $ 6,000 6,000 0 Locus Discovery, Series D, Pfd. 09/05/01 1,875,000 7,500 3,750 Microdose 11/24/00 359,944 2,005 270 Perlegen Sciences 03/30/01 1,249,999 4,500 2,632 Security Capital European Realty (Luxembourg) 08/20/98-11/12/99 37,407 748 527 ---------- ---------- $ 30,753 $ 18,479 ========== ==========
(e) On June 30, 2005, the market value of foreign securities (in thousands) represents 14.95% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT ------------------------------------------------- Canada $ 259,354 1.79% Ireland 227,277 1.57 United Kingdom 190,167 1.31 France 185,595 1.28 Japan 184,812 1.27 Netherlands 133,902 0.92 Switzerland 107,006 0.74 Germany 82,977 0.57 Sweden 79,639 0.55 Taiwan 67,801 0.47 Australia 54,909 0.38 Hong Kong 48,503 0.33 Argentina 46,962 0.32 Norway 43,887 0.30 Italy 43,382 0.30 Denmark 38,802 0.27 VALUE PERCENT ------------------------------------------------- Spain $ 37,517 0.26% Austria 36,494 0.25 India 34,510 0.24 Mexico 33,290 0.23 Brazil 33,214 0.23 Czech Republic 31,314 0.22 South Korea 31,116 0.22 Chile 27,500 0.19 Finland 19,466 0.13 China 18,606 0.13 Singapore 17,993 0.12 South Africa 15,183 0.11 New Zealand 13,985 0.10 Belgium 12,184 0.08 Greece 10,526 0.07 Luxembourg 527 0.00 ---------- ---------- Total Foreign Portfolio $2,168,400 14.95% ========== ========== (f) Represents fair value as determined in good faith under procedures approved by the Board of Trustees. 33 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Bloomsbury Publishing 0 911,000 Expro International 2,600,000 2,840,000 IAWS (Ireland) 1,400,000 1,425,000 Kensington 1,650,000 1,700,000 Paddy Power (Ireland) 0 600,000 Paragon Group 1,600,000 2,800,000 Ulster Television 223,000 1,281,000 United Drug (Ireland) 4,300,000 4,825,000 William Hill 0 1,200,000 Workspace Group 2,100,000 2,450,000 >FRANCE April Group 400,000 492,000 Iliad 279,500 390,000 Imerys 300,000 360,000 Metropole TV 360,000 450,000 Rubis 0 31,000 >GERMANY Bilfinger Berger 300,000 445,000 CTS Eventim 0 77,000 GFK 350,000 415,000 Grenke Grenkeleasing 160,000 203,000 Wincor Nixdorf 225,000 275,000 >NETHERLANDS Aalberts Industrie 540,000 550,000 Fugro 1,115,200 1,245,000 (INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT) Sligro Food Group 340,000 400,000 Smit International 0 289,000 United Services Group 620,000 684,000 >SWITZERLAND BKW Energie 0 119,000 (INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT) Kuehne & Nagel 85,000 95,000 >SWEDEN Gambro 470,000 762,000 Hexagon 1,194,000 1,230,000 (INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT) >RUSSIAN FEDERATION Mechel Steel Group 260,000 370,000 RBC Information Systems 0 700,000 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- ASIA >JAPAN Ito En 142,000 301,000 Sato 88,800 450,000 Shimano 250,000 450,000 Ushio 550,000 750,000 >TAIWAN Advantech 4,978,000 6,500,000 ASE Test 1,245,100 1,772,600 Novatek Microelectronics 0 1,800,000 >INDIA Housing Development Finance 1,300,000 1,329,000 ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA ABC Learning Center 0 1,225,000 ---------------------------------------------------------------------------- LATIN AMERICA >BRAZIL Caemi 6,300,000 8,800,000 Diagnosticos 156,250 200,000 Porto Seguro 594,000 1,000,000 Ultrapar 0 500,000,000 >MEXICO URBI Desarrollo 700,000 1,000,000 >CHILE Sociedad Quimica Y Minera de Chile 16,800 160,000 1-800-922-6769 34 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Anglo Irish Bank (Ireland) 4,741,010 3,888,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Hit Entertainment 1,270,000 0 Tullow Oil 7,500,000 6,500,000 >FRANCE Neopost 377,500 327,500 >NETHERLANDS Hunter Douglas 128,000 0 >SWITZERLAND Bachem 110,000 0 >SPAIN Abengoa 2,000,000 1,357,000 >ITALY Amplifon 270,000 190,000 Autogrill 830,000 0 Credito Emiliano 1,000,000 0 >FINLAND Amer Sports 555,000 0 >NORWAY Den Norske Bank 910,000 0 Ekornes 522,300 470,000 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- ASIA >JAPAN ARRK 380,000 0 Eneserve 358,000 63,000 Kappa Create 402,000 380,000 NIFCO 818,000 14,000 Olympus Optical 325,000 0 Wacoal 1,500,000 1,185,000 >HONG KONG Esprit Holdings 2,000,000 0 Lerado Group 27,932,000 27,480,000 Ngai Lik Industrial 14,500,000 11,330,000 >SOUTH KOREA Yuhan 63,280 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Corus Entertainment 330,000 0 Masonite International 445,000 0 Petrokazakhstan 185,000 153,100 35 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 96.0% ------------------------------------------------------------------------------ EUROPE: 59.7% >UNITED KINGDOM/IRELAND: 19.6% 3,888,000 Anglo Irish Bank (Ireland) $ 48,158 SMALL BUSINESS & MIDDLE MARKET BANKING 2,350,000 Grafton Group (Ireland) (b) 27,194 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 1,750,000 Exel 26,492 GLOBAL LOGISTICS & FREIGHT FORWARDING 2,840,000 Expro International 23,056 OFFSHORE OIL FIELD SERVICES 6,500,000 Tullow Oil 21,667 OIL & GAS PRODUCER 2,800,000 Paragon Group 21,187 UK BUY-TO-LET FINANCE COMPANY 4,825,000 United Drug (Ireland) 20,703 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER 1,275,000 Depfa Bank (Ireland) 20,375 INTERNATIONAL PUBLIC SECTOR FINANCE 1,425,000 IAWS (Ireland) 19,908 BAKED GOODS 800,000 Kerry (Ireland) 19,730 FOOD INGREDIENTS 1,700,000 Kensington 17,127 NON-CONFORMING MORTGAGE COMPANY 900,000 Intermediate Capital 16,795 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 975,000 Northgate 15,777 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 600,000 Cobham 15,205 AEROSPACE COMPONENTS 798,000 Jurys Doyle Hotel (Ireland) 14,963 OWNER/OPERATOR OF MID-PRICED HOTELS 750,000 Xstrata 14,409 DIVERSIFIED MINING HOLDING COMPANY 1,175,000 Business Post 13,384 PARCEL & EXPRESS MAIL SERVICE 2,200,000 BBA Group 12,141 AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS 1,200,000 William Hill 11,545 LARGEST BOOKMAKER 1,281,000 Ulster Television 10,749 IRISH TELEVISION & RADIO STATION OPERATOR 1,200,000 Spectris 10,616 ELECTRONIC INSTRUMENTS & CONTROLS 3,800,000 RPS Group 10,486 ENVIRONMENTAL CONSULTING 2,450,000 Workspace Group 10,342 REAL ESTATE COMPANY 600,000 Paddy Power (Ireland) 10,240 IRISH BETTING SERVICES 500,000 Viridian 6,977 NORTHERN IRELAND ELECTRIC UTILITY 911,000 Bloomsbury Publishing 6,143 PUBLISHING ------------------------------------------------------------------------------ 445,369 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >FRANCE/BELGIUM: 9.7% 117,000 Vallourec $ 33,595 SEAMLESS TUBES 1,980,000 SES Global 29,803 SATELLITE BROADCASTING SERVICES 327,500 Neopost 28,784 POSTAGE METER MACHINES 360,000 Imerys 24,746 INDUSTRIAL MINERALS PRODUCER 492,000 April Group 15,296 INSURANCE POLICY CONSTRUCTION 390,000 Iliad 14,566 HIGH SPEED INTERNET SERVICE PROVIDER 450,000 Metropole TV 11,399 TELEVISION BROADCASTER 215,000 Carbone Lorraine 10,202 ADVANCED INDUSTRIAL MATERIALS 140,000 Essilor International 9,527 EYEGLASS LENSES 184,000 Omega Pharma (Belgium) 9,500 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 400,000 Fininfo 8,378 DATA FEEDS FOR FRENCH BANKS & BROKERS 94,000 Bacou Dalloz 7,689 SAFETY EQUIPMENT 96,000 Pierre & Vacances 7,081 VACATION APARTMENT LETS 140,000 Norbert Dentressangle 6,600 TRANSPORT 31,000 Rubis 1,928 TANK STORAGE & LPG SUPPLIER ------------------------------------------------------------------------------ 219,094 >GERMANY/AUSTRIA: 8.0% 275,000 Wincor Nixdorf 22,467 RETAIL POS SYSTEMS & ATM MACHINES 315,000 Rhoen-Klinikum Pfd. 21,773 300,000 Rhoen-Klinikum 20,775 HOSPITAL MANAGEMENT 445,000 Bilfinger Berger 20,715 CONSTRUCTION & RELATED SERVICES 375,000 Wienerberger (Austria) 17,378 BRICKS & CLAY ROOFING TILES 415,000 GFK 16,363 MARKET RESEARCH SERVICES 450,000 Hugo Boss Designs 14,761 FASHION APPAREL 175,000 Deutsche Boerse 13,653 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 200,000 Vossloh 9,352 RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES 203,000 Grenke Grenkeleasing 8,603 FINANCING FOR IT EQUIPMENT 864,998 Takkt 8,346 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 1-800-922-6769 36 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >GERMANY/AUSTRIA--CONTINUED 260,000 Deutsche Beteiligungs $ 4,053 PRIVATE EQUITY INVESTMENT MANAGEMENT 77,000 CTS Eventim (b) 3,232 EVENT TICKET SALES ------------------------------------------------------------------------------ 181,471 >NETHERLANDS: 7.7% 1,245,000 Fugro 30,899 SURVEY & GPS SERVICES 550,000 Aalberts Industries 25,132 FLOW CONTROL & HEAT TREATMENT 327,000 OPG Groep 22,770 HEALTHCARE SUPPLIES & PHARMACIES 230,000 Koninklijke Ten Cate 20,674 ADVANCED TEXTILES & INDUSTRIAL FABRICS 684,000 United Services Group 18,050 TEMPORARY STAFFING SERVICES 400,000 Sligro Food Group 16,066 FOOD SERVICE & WHOLESALING 400,000 IMTech 13,979 TECHNICAL ENGINEERING 890,000 Unit 4 Aggresso (b) 13,581 BUSINESS & SECURITY SOFTWARE 289,000 Smit International 13,398 HARBOR & OFFSHORE TOWAGE & MARINE SERVICES ------------------------------------------------------------------------------ 174,549 >SWITZERLAND: 4.3% 95,000 Kuehne & Nagel 20,088 FREIGHT FORWARDING/LOGISTICS 25,000 Geberit International 15,953 PLUMBING SUPPLIES 24,000 Sika (b) 14,937 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 3,000 Pargesa 10,933 INDUSTRIAL & MEDIA CONGLOMERATE 30,000 Schindler 10,798 ELEVATOR MANUFACTURER & SERVICE PROVIDER 85,000 Synthes 9,302 PRODUCTS FOR ORTHOPEDIC SURGERY 15,000 Givaudan 8,700 INDUSTRIAL FRAGRANCES & FLAVORS 119,000 BKW Energie 7,437 ELECTRIC UTILITY ------------------------------------------------------------------------------ 98,148 >SWEDEN: 2.4% 1,230,000 Hexagon 24,827 MEASUREMENT EQUIPMENT & POLYMERS 1,075,000 Nobia 15,601 KITCHEN CABINET MANUFACTURING & DISTRIBUTION 762,000 Gambro 10,168 PRODUCTS/SERVICES FOR RENAL CARE 188,000 Sweco (b) 3,388 NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING ------------------------------------------------------------------------------ 53,984 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >SPAIN: 1.7% 1,357,000 Abengoa $ 15,722 ENGINEERING & CONSTRUCTION 620,000 Red Electrica 17,113 SPANISH POWER GRID 120,000 Bankinter 6,118 MORTGAGE LENDER ------------------------------------------------------------------------------ 38,953 >ITALY: 1.4% 2,120,000 Davide Campari 15,490 SPIRITS & WINE 190,000 Amplifon 12,055 HEARING AID RETAILER 3,388,000 Ducati Motor (b) 4,011 MOTORCYCLES & RELATED MERCHANDISE ------------------------------------------------------------------------------ 31,556 >CZECH REPUBLIC: 1.0% 183,000 Komercni Banka 22,922 LEADING CZECH UNIVERSAL BANK ------------------------------------------------------------------------------ >FINLAND: 1.0% 439,000 Jaakko Poyry 13,142 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 950,000 Sponda 9,765 OFFICE & WAREHOUSE PROPERTY COMPANY ------------------------------------------------------------------------------ 22,907 >RUSSIAN FEDERATION: 0.9% 700,000 RBC Information Systems (b) 11,620 FINANCIAL INFORMATION, MEDIA, & IT SERVICES 370,000 Mechel Steel Group 9,398 COKING COAL ------------------------------------------------------------------------------ 21,018 >NORWAY: 0.8% 470,000 Ekornes 9,091 NICHE FURNITURE MANUFACTURER 221,000 Orkla 8,103 FOOD & DIVERSIFIED CONSUMER GOODS ------------------------------------------------------------------------------ 17,194 >GREECE: 0.6% 930,000 Intralot 14,187 LOTTERY & GAMING SYSTEMS/SERVICES ------------------------------------------------------------------------------ >DENMARK: 0.4% 35,000 Kobenhavns Lufthavne 8,285 COPENHAGEN AIRPORT AUTHORITY ------------------------------------------------------------------------------ >POLAND: 0.2% 132,000 Central European Distribution (b) 4,928 SPIRITS & WINE DISTRIBUTION ----------- EUROPE: TOTAL 1,354,565 ------------------------------------------------------------------------------ 37 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ ASIA: 21.7% >JAPAN: 10.6% 480,100 Daito Trust Construction $ 17,928 APARTMENT BUILDER 862,000 Park 24 17,028 PARKING LOT OPERATOR 2,900,000 Bank of Yokohama 16,664 REGIONAL BANK 301,000 Ito En 15,435 BOTTLED TEA & OTHER BEVERAGES 338,000 Hogy Medical 15,076 DISPOSABLE SURGICAL PRODUCTS 1,185,000 Wacoal 15,035 WOMEN'S SPECIALTY APPAREL 470,000 Meitec 14,425 STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS 750,000 Ushio 13,291 INDUSTRIAL LIGHT SOURCES 450,000 Shimano 12,769 BICYCLE COMPONENTS & FISHING TACKLE 14,465 Jupiter Telecommunications (b) 12,155 LARGEST CABLE SERVICE PROVIDER IN JAPAN 220,000 Fast Retailing 11,408 APPAREL RETAILER 110,000 Funai Electric 11,247 CONSUMER ELECTRONICS 906,000 Toyo Technica 10,380 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 2,248,000 Hiroshima Bank 10,219 REGIONAL BANK 450,000 Sato 10,038 BAR CODE PRINTERS & SUPPLIES 1,400,000 Chiba Bank 9,185 REGIONAL BANK 450,200 Ain Pharmaciez 9,098 DISPENSING PHARMACY/DRUGSTORE OPERATOR 1,500,000 Fukuoka Bank 8,857 REGIONAL BANK 380,000 Kappa Create 7,920 SUSHI CHAIN RESTAURANT OPERATOR 63,000 Eneserve 1,879 POWER GENERATORS 14,000 NIFCO 212 MOLDED PLASTIC COMPONENTS ------------------------------------------------------------------------------ 240,249 >TAIWAN: 4.3% 15,740,000 Phoenixtec Power 16,887 UNINTERRUPTIBLE POWER SUPPLIES 6,500,000 Advantech 15,319 EMBEDDED COMPUTERS 1,772,600 ASE Test (b) 11,416 SEMICONDUCTOR PACKAGING & TEST SERVICES 5,167,000 Springsoft Systems 10,740 ELECTRONIC DESIGN AUTOMATION SOFTWARE 9,661,000 Chicony Electronic 9,993 PC POWER SUPPLIES & KEYBOARDS 6,000,000 Sunplus Technology 8,398 FABLESS SEMICONDUCTOR DESIGNER NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ 5,300,000 Wah Lee Industrial $ 7,888 DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT 1,800,000 Novatek Microelectronics 7,654 LCD RELATED IC DESIGNER 8,470,000 Bank of Kaohsiung 5,980 COMMERCIAL BANKING 3,010,000 Taiwan Fu Hsing 3,380 DOOR LOCK MANUFACTURER ------------------------------------------------------------------------------ 97,655 >HONG KONG/CHINA: 2.7% 6,000,000 Hong Kong Exchanges & Clearing 15,541 HONG KONG EQUITY & DERIVATIVES OPERATOR 25,000,000 Global Bio-Chem Technology Group (China) 15,481 1,800,000 Global Bio-Chem Technology Group Warrants (China) 30 REFINER OF CORN-BASED COMMODITIES 6,000,000 Techtronic Industries 15,115 POWER TOOLS & MOTORIZED APPLIANCES 9,800,000 Hainan Meilan Airport (China) 5,573 CHINESE AIRPORT OPERATOR 17,700,000 Linmark 5,059 SOURCING OF CONSUMER GOODS 27,480,000 Lerado Group 2,898 BABY STROLLERS & INFANT CAR SEATS MANUFACTURER 11,330,000 Ngai Lik Industrial 2,235 CONSUMER ELECTRONICS MANUFACTURER ------------------------------------------------------------------------------ 61,932 >SOUTH KOREA: 1.2% 250,000 Hyundai Mobis 16,729 AUTO PARTS 100,000 Samsung Fire & Marine 8,083 NON-LIFE INSURANCE 200,000 Samyoung Heat Exchange 3,069 POWER PLANT RELATED MACHINERY ------------------------------------------------------------------------------ 27,881 >INDIA: 1.2% 1,329,000 Housing Development Finance 26,978 PREMIER MORTGAGE LENDER IN INDIA ------------------------------------------------------------------------------ >SINGAPORE: 1.1% 16,000,000 Comfort Del Gro 15,993 TAXI & MASS TRANSIT SERVICE 19,500,000 LMA International (b) 9,219 MEDICAL EQUIPMENT & SUPPLIES ------------------------------------------------------------------------------ 25,212 >INDONESIA: 0.6% 45,000,000 PT Perusahaan Gas Negara 13,279 GAS PIPELINE OPERATOR ------------------------------------------------------------------------------ ----------- ASIA: TOTAL 493,186 ------------------------------------------------------------------------------ OTHER COUNTRIES: 8.2% >AUSTRALIA/NEW ZEALAND: 3.9% 3,000,000 Billabong International 30,993 ACTION SPORTS APPAREL BRAND MANAGER 3,000,000 Lion Nathan 17,247 BEER BREWER/DISTRIBUTOR 1-800-922-6769 38 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >AUSTRALIA/NEW ZEALAND--CONTINUED 350,000 Perpetual Trustees $ 15,232 AUSTRALIAN MUTUAL FUND MANAGER 3,000,000 Sky City Entertainment (New Zealand) 9,323 CASINO/ENTERTAINMENT COMPLEX 3,882,489 Pacific Brands 6,670 AUSTRALIAN BRANDED APPAREL 530,000 Major Drilling Group International (b) 5,225 MINING EXPLORATION DRILLER 1,225,000 ABC Learning Center 5,187 CHILDCARE CENTERS ------------------------------------------------------------------------------ 89,877 >CANADA: 3.6% 595,000 Talisman Energy 22,253 OIL & GAS PRODUCER 1,190,000 Shawcor 17,472 OIL & GAS PIPELINE PRODUCTS 450,000 Intrawest 10,776 OWNER/OPERATOR OF SKI RESORTS 400,000 Noranda 6,851 DIVERSIFIED MINING HOLDING COMPANY 1,100,000 Kinross Gold (b) 6,722 GOLD MINING 850,000 Ivanhoe Mines (b) 6,593 COPPER MINING IN MONGOLIA 153,100 Petrokazakhstan 5,600 OIL PRODUCER & REFINER IN KAZAKHSTAN 2,000,000 Northern Orion Resources (b) 4,921 MINING OF COPPER & GOLD IN ARGENTINA ------------------------------------------------------------------------------ 81,188 >SOUTH AFRICA: 0.7% 350,000 Edgars Consolidated Stores 15,183 LEADING RETAIL CONGLOMERATE ------------------------------------------------------------------------------ ----------- OTHER COUNTRIES: TOTAL 186,248 ------------------------------------------------------------------------------ LATIN AMERICA: 6.4% >BRAZIL: 2.5% 640,000 Natura Cosmeticos 20,422 DIRECT RETAILER OF COSMETICS 1,000,000 Porto Seguro 8,948 AUTO & LIFE INSURANCE 500,000,000 Ultrapar 8,741 SPECIALTY CHEMICALS & LIQUID PROPANE GAS DISTRIBUTION 280,000 America Latina Logistics 8,290 RAIL OPERATOR IN BRAZIL & ARGENTINA 8,800,000 Caemi 8,249 IRON ORE/KAOLIN PRODUCER 200,000 Diagnosticos (b) 2,710 MEDICAL DIAGNOSTIC SERVICES ------------------------------------------------------------------------------ 57,360 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ >MEXICO: 1.6% 660,000 Grupo Aeroportaurio Del Sureste $ 21,021 CANCUN & COZUMEL AIRPORT OPERATOR 3,000,000 Consorcio ARA 10,358 AFFORDABLE HOUSING BUILDER 1,000,000 URBI Desarrollo (b) 5,490 AFFORDABLE HOUSING BUILDER ------------------------------------------------------------------------------ 36,869 >ARGENTINA: 1.2% 340,000 Tenaris 26,612 STEEL PIPE FOR OIL WELLS & PIPELINES ------------------------------------------------------------------------------ >CHILE: 1.1% 160,000 Sociedad Quimica Y Minera de Chile 16,000 PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM & IODINE 300,000 CorpBanca 7,830 CONSUMER & SME BANKING ------------------------------------------------------------------------------ 23,830 ----------- LATIN AMERICA: TOTAL 144,671 TOTAL COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 96.0% ----------- (COST: $1,527,519) 2,178,670 ------------------------------------------------------------------------------ SHORT-TERM OBLIGATIONS: 3.7% $ 34,000 Citigroup Funding 3.10% - Due 7/1/05 34,000 30,000 LaSalle Bank 3.20% - Due 7/5/05 29,989 19,046 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $19,429 (repurchase proceeds: $19,048) 19,046 ------------------------------------------------------------------------------ (AMORTIZED COST: $83,035) 83,035 ----------- TOTAL INVESTMENTS: 99.7% 2,261,705 (COST: $1,610,554)(a)(c) CASH AND OTHER ASSETS LESS LIABILITIES: 0.3% 6,552 ----------- TOTAL NET ASSETS: 100% $ 2,268,257 ============================================================================== 39 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purpose cost of investments was $1,610,554 and net unrealized appreciation was $651,151 consisting of gross unrealized appreciation of $710,929 and gross unrealized depreciation of $59,778. (b) Non-income producing security. (c) On June 30, 2005, the Fund's total investments were denominated in currencies as follows: % OF TOTAL CURRENCY VALUENET ASSETS ------------------------------------------------ Euro $ 863,991 38.1% British Pounds 264,098 11.6 Japanese Yen 240,249 10.6 US Dollar 197,460 8.7 Other currencies less than 5% of total net assets 695,907 30.7 ----------- ------ $ 2,261,705 99.7% =========== ====== 1-800-922-6769 40 COLUMBIA ACORN INTERNATIONAL >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2005, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 108,960 4.8% Industrial Materials 96,862 4.3 Conglomerates 76,614 3.4 Steel 60,207 2.6 Construction 59,401 2.6 Machinery 51,243 2.3 Specialty Chemicals 48,378 2.1 Outsourcing & Training Services 44,616 2.0 Electrical Components 28,496 1.2 Industrial Distribution 27,194 1.2 ---------------------------------------------------------------------------- 601,971 26.5 >CONSUMER GOODS/SERVICES Apparels 72,518 3.2 Food 55,704 2.5 Beverages 48,172 2.1 Retail 47,744 2.1 Gaming 35,972 1.6 Other Consumer Services 32,194 1.4 Durables Goods 31,895 1.4 Nondurables 28,525 1.3 Travel 25,739 1.1 Furniture & Textiles 24,692 1.1 Consumer Electronics 11,247 0.5 Casinos 9,323 0.4 Restaurants 7,920 0.4 Consumer Goods Distribution 4,928 0.2 Leisure Products 3,232 0.1 ---------------------------------------------------------------------------- 439,805 19.4 >FINANCE Banks 150,190 6.6 Other Finance Companies 79,489 3.5 Savings & Loans 33,096 1.5 Insurance 32,327 1.4 Money Management 19,285 0.8 ---------------------------------------------------------------------------- 314,387 13.8 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION Computer Hardware & Related Equipment $ 64,666 2.9% Business Information & Marketing Services 35,227 1.6 Satellite Broadcasting 29,803 1.3 Financial Processors 29,194 1.3 Semiconductors & Related Equipment 27,468 1.2 Business Software 24,321 1.1 Television Broadcasting 22,148 1.0 Instrumentation 20,996 0.9 Internet Related 14,566 0.6 Cable Television 12,155 0.5 Computer Services 11,620 0.5 Electronics Distribution 7,888 0.3 Publishing 6,143 0.3 Contract Manufacturing 2,235 0.1 ---------------------------------------------------------------------------- 308,430 13.6 >ENERGY/MINERALS Oil Services 71,427 3.1 Mining 50,421 2.2 Oil/Gas Producers 49,520 2.2 Agricultural Commodities 15,511 0.7 Refining/Marketing/Distribution 15,207 0.7 Non-Ferrous Metals 11,947 0.5 Independent Power 1,879 0.1 ---------------------------------------------------------------------------- 215,912 9.5 >HEALTH CARE Hospital Management 42,548 1.9 Services 32,938 1.5 Pharmaceuticals 30,203 1.3 Medical Equipment 28,048 1.2 Hospital/ Laboratory Supplies 17,786 0.8 ---------------------------------------------------------------------------- 151,523 6.7 >OTHER INDUSTRIES Transportation 79,160 3.5 Real Estate 35,955 1.6 Regulated Utilities 31,527 1.4 ---------------------------------------------------------------------------- 146,642 6.5 TOTAL COMMON STOCKS AND -------------------------- OTHER EQUITY-LIKE SECURITIES 2,178,670 96.0 SHORT-TERM OBLIGATIONS 83,035 3.7 -------------------------- TOTAL INVESTMENTS 2,261,705 99.7 CASH AND OTHER ASSETS LESS LIABILITIES 6,552 0.3 -------------------------- NET ASSETS $ 2,268,257 100.0% ============================================================================ 41 COLUMBIA ACORN USA >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES -------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- INFORMATION American Tower 40,000 490,000 Navigant Consulting 0 98,300 Novell 1,330,000 1,850,000 Salem Communications 293,100 393,100 SSA Global Technologies 0 218,500 Tellabs 200,000 975,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES HNI 60,000 100,000 International Speedway Motors 241,300 271,300 ---------------------------------------------------------------------------- HEALTH CARE Advanced Medical Optics 0 94,171 Arrow International 0 100,000 Charles River Laboratories 40,000 220,000 Intermagnetics General 0 75,000 Neurocrine Biosciences 155,000 175,000 Serologicals 0 405,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Layne Christensen 156,700 242,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Genlyte Group 244,000 308,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Nordson 40,100 211,800 Quanta Services 300,000 400,000 Spartech 125,000 287,500 ---------------------------------------------------------------------------- OTHER INDUSTRIES Heartland Express 0 87,800 NUMBER OF SHARES -------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- INFORMATION Mediacom Communications 300,000 0 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Urban Outfitters 48,200 0 ---------------------------------------------------------------------------- HEALTH CARE CTI Molecular Imaging 245,000 0 VISX 170,600 0 ---------------------------------------------------------------------------- ENERGY/MINERALS Equitable Resources 85,600 55,600 Quicksilver Resources 540,000 350,000 Range Resources 75,000 0 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Hub Group 206,000 0 Insurance Auto 41,900 0 1-800-922-6769 42 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 90.5% ------------------------------------------------------------------------------ INFORMATION: 27.4% >TELECOMMUNICATION SERVICES: 7.3% 652,000 Western Wireless (b) $ 27,580 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 20,422 COMMUNICATION TOWERS 333,800 Commonwealth Telephone 13,990 RURAL PHONE FRANCHISES & CLEC 490,000 American Tower (b) 10,300 COMMUNICATION TOWERS IN USA & MEXICO 10,000 Telephone & Data Systems 408 10,000 Telephone & Data Systems Cl. S 383 CELLULAR & TELEPHONE SERVICES ------------------------------------------------------------------------------ 73,083 >BUSINESS/CONSUMER SOFTWARE: 7.3% 501,200 Micros Systems (b) 22,429 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 1,850,000 Novell (b) 11,470 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 974,000 JDA Software Group (b) 11,084 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 266,650 Kronos (b) 10,770 LABOR MANAGEMENT SOLUTIONS 473,500 MRO Software (b) 6,918 ENTERPRISE MAINTENANCE SOFTWARE 260,000 Aspect Communications (b) 2,920 CALL CENTER SOFTWARE 218,500 SSA Global Technologies (b) 2,622 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 653,200 E.Piphany (b) 2,273 CRM SOFTWARE 60,000 Maximus 2,117 OUTSOURCER FOR GOVERNMENT ------------------------------------------------------------------------------ 72,603 >COMPUTER HARDWARE/ SEMICONDUCTORS/RELATED EQUIPMENT: 3.8% 365,300 Integrated Circuit Systems (b) 7,540 SILICON TIMING DEVICES 260,000 Unova (b) 6,924 BARCODE & WIRELESS LAN SYSTEMS 570,000 Symbol Technologies 5,626 MOBILE COMPUTERS & BARCODE SCANNERS 445,000 Entegris (b) 4,406 SEMICONDUCTOR WAGER SHIPPING & HANDLING PRODUCTS 99,000 Zebra Technologies (b) 4,335 BAR CODE PRINTERS 424,100 SeaChange International (b) 2,977 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 100,000 Belden CDT 2,120 SPECIALTY CABLE 70,000 Littelfuse (b) 1,950 LITTLE FUSES 40,000 Rogers (b) 1,622 PCB LAMINATES & HIGH PERFORMANCE FOAMS ------------------------------------------------------------------------------ 37,500 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >BROADCASTING: 2.1% 393,100 Salem Communications (b) $ 7,799 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 695,000 Spanish Broadcasting (b) 6,943 SPANISH LANGUAGE RADIO STATIONS 610,000 Entravision Communications (b) 4,752 SPANISH LANGUAGE TV, RADIO & OUTDOOR 138,500 Gray Television 1,670 MID MARKET AFFILIATED TV STATIONS ------------------------------------------------------------------------------ 21,164 >TELECOMMUNICATIONS EQUIPMENT: 1.8% 975,000 Tellabs (b) 8,483 TELECOMMUNICATIONS EQUIPMENT 480,000 Andrew (b) 6,125 WIRELESS INFRASTRUCTURE EQUIPMENT 300,000 Symmetricom (b) 3,111 NETWORK TIMING & SYNCHRONIZATION DEVICES ------------------------------------------------------------------------------ 17,719 >TRANSACTION PROCESSORS: 1.6% 211,640 Global Payments 14,349 CREDIT CARD PROCESSOR 143,100 Pegasus Systems (b) 1,596 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY ------------------------------------------------------------------------------ 15,945 >BUSINESS INFORMATION/BUSINESS SERVICES/PUBLISHING: 1.1% 102,800 Getty Images (b) 7,634 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 90,000 Ceridian (b) 1,753 HR SERVICES & PAYMENT PROCESSING 98,300 Navigant Consulting (b) 1,736 FINANCIAL CONSULTING FIRM ------------------------------------------------------------------------------ 11,123 >COMPUTER SERVICES: 0.8% 1,005,500 AnswerThink Consulting (b) 3,570 I/T INTEGRATION & BEST PRACTICE RESEARCH 786,000 RCM Technologies (b)(c) 3,333 TECHNOLOGY ENGINEERING SERVICES 200,000 Igate Capital (b) 716 I/T & BPO OUTSOURCING SERVICES ------------------------------------------------------------------------------ 7,619 >INTERNET: 0.7% 460,600 DoubleClick (b) 3,864 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 285,000 ValueClick (b) 3,514 INTERNET ADVERTISING ------------------------------------------------------------------------------ 7,378 >INSTRUMENTATION: 0.4% 90,000 Trimble Navigation (b) 3,507 GPS-BASED INSTRUMENTS ------------------------------------------------------------------------------ >ELECTRONICS DISTRIBUTION: 0.3% 60,000 CDW 3,425 TECHNOLOGY RESELLER ------------------------------------------------------------------------------ 43 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >CONTRACT MANUFACTURING: 0.2% 117,700 Plexus (b) $ 1,675 ELECTRONIC MANUFACTURING SERVICES ------------------------------------------------------------------------------ ----------- INFORMATION: TOTAL 272,741 ------------------------------------------------------------------------------ CONSUMER GOODS/SERVICES: 18.0% >RETAIL: 8.0% 285,000 Abercrombie & Fitch 19,579 TEEN APPAREL RETAILER 435,750 Aeropostale (b) 14,641 MALL BASED TEEN RETAILER 360,000 Petco Animal Supplies (b) 10,555 PET SUPPLIES & SERVICES 230,000 Chico's FAS (b) 7,884 WOMEN'S SPECIALTY RETAILER 393,750 Christopher & Banks 7,190 WOMEN'S APPAREL RETAILER 212,500 Ann Taylor (b) 5,159 WOMEN'S APPAREL RETAILER 100,000 Michaels Stores 4,137 CRAFT & HOBBY SPECIALTY RETAILER 95,000 Genesco (b) 3,524 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 100,000 Sports Authority (b) 3,180 SPORTING GOODS STORES 141,200 Brookstone (b) 2,666 SPECIALTY CONSUMER PRODUCT RETAILER 60,000 West Marine (b) 1,084 LARGEST RETAILER OF BOATING SUPPLIES ------------------------------------------------------------------------------ 79,599 >CONSUMER SERVICES: 4.0% 396,000 ITT Educational Services (b) 21,154 POSTSECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 9,870 OWNER/OPERATOR OF COIN COUNTING MACHINES 371,700 Central Parking 5,111 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 60,000 Weight Watchers (b) 3,097 WEIGHT LOSS PROGRAMS ------------------------------------------------------------------------------ 39,232 >ENTERTAINMENT/LEISURE PRODUCTS: 1.8% 271,300 International Speedway Motors 15,263 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 195,000 Callaway Golf 3,009 PREMIUM GOLF CLUBS & BALLS ------------------------------------------------------------------------------ 18,272 >APPAREL: 1.7% 194,200 Oxford Industries 8,360 BRANDED & PRIVATE LABEL APPAREL 168,000 Coach (b) 5,640 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 134,000 Steven Madden (b) 2,380 WHOLESALER/RETAILER OF FASHION FOOTWEAR ------------------------------------------------------------------------------ 16,380 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >NONDURABLES: 1.3% 177,200 Scotts Company (b) $ 12,618 CONSUMER LAWN & GARDEN PRODUCTS 38,900 Prestige Brands (b) 759 OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS ------------------------------------------------------------------------------ 13,377 >FURNITURE: 1.1% 100,000 HNI 5,115 OFFICE FURNITURE & FIREPLACES 85,000 Herman Miller 2,621 OFFICE FURNITURE 60,000 American Woodmark 1,801 KITCHEN CABINET MANUFACTURER 20,000 Mohawk Industries (b) 1,650 CARPET & FLOORING ------------------------------------------------------------------------------ 11,187 >FOOD & BEVERAGES: 0.1% 37,000 NBTY (b) 960 VITAMINS & SUPPLEMENTS ------------------------------------------------------------------------------ ----------- CONSUMER GOODS/SERVICES: TOTAL 179,007 ------------------------------------------------------------------------------ HEALTH CARE: 14.2% >MEDICAL EQUIPMENT: 5.4% 573,000 Edwards Lifesciences (b) 24,650 HEART VALVES 221,300 Diagnostic Products 10,474 IMMUNODIAGNOSTIC KITS 220,000 Viasys Healthcare (b) 4,970 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 94,171 Advanced Medical Optics (b) 3,743 MEDICAL DEVICES FOR EYE CARE 115,700 ICU Medical (b) 3,722 INTRAVENOUS THERAPY PRODUCTS 100,000 Arrow International 3,190 DISPOSABLE CATHETERS 75,000 Intermagnetics General (b) 2,307 MRI EQUIPMENT ------------------------------------------------------------------------------ 53,056 >SERVICES: 4.8% 220,000 Charles River Laboratories (b) 10,615 PHARMACEUTICAL RESEARCH 246,800 Lincare Holdings (b) 10,079 HOME HEALTH CARE SERVICES 133,250 Coventry Health Care (b) 9,427 PPO NETWORK 405,000 Serologicals (b) 8,606 BLOOD COLLECTION & ANTIBODY PRODUCTION 423,800 NDCHealth Group 7,616 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 100,000 Dendrite International (b) 1,380 SOFTWARE FOR PHARMACEUTICAL SALES FORCE ------------------------------------------------------------------------------ 47,723 1-800-922-6769 44 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >BIOTECHNOLOGY/DRUG DELIVERY: 2.2% 175,000 Neurocrine Biosciences (b) $ 7,361 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 360,000 Nektar Therapeutics (b) 6,062 DRUG DELIVERY TECHNOLOGIES 260,000 AtheroGenics (b) 4,155 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 315,000 Ligand Pharmaceuticals (b) 2,189 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 300,000 Lexicon Genetics (b) 1,482 DRUG DISCOVERY 375,000 Locus Discovery, Series D, Pfd. (d)(e) 750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 363,636 Metabolex, Series F (d)(e) 53 DRUGS FOR DIABETES ------------------------------------------------------------------------------ 22,052 >MEDICAL SUPPLIES: 1.0% 222,800 Techne (b) 10,229 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ------------------------------------------------------------------------------ >PHARMACEUTICALS: 0.8% 245,500 Par Pharmaceuticals (b) 7,809 GENERICS ------------------------------------------------------------------------------ ----------- HEALTH CARE: TOTAL 140,869 ------------------------------------------------------------------------------ ENERGY/MINERALS:11.8% >OIL SERVICES: 6.1% 635,000 Chicago Bridge & Iron 14,516 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 401,700 FMC Technologies (b) 12,842 OIL & GAS WELL HEAD MANUFACTURER 300,000 Pride International (b) 7,710 OFFSHORE DRILLING CONTRACTOR 941,000 Newpark Resources (b) 7,058 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 242,000 Layne Christensen (b) 4,807 WATER/MINERAL DRILLER & COAL SEAM GAS PRODUCER 355,000 Hanover Compressor (b) 4,086 NATURAL GAS COMPRESSOR RENTAL 266,800 Pioneer Drilling (b) 4,071 OIL & GAS WELL DRILLER 51,000 Carbo Ceramics 4,027 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,634 OIL & GAS WELL WORKOVER SERVICES ------------------------------------------------------------------------------ 60,751 >OIL & GAS PRODUCERS: 4.0% 350,000 Quicksilver Resources (b) 22,376 NATURAL GAS & COAL SEAM GAS PRODUCER 272,000 Western Gas 9,493 OIL & COAL SEAM GAS PRODUCER 104,200 Southwestern Energy (b) 4,895 NATURAL GAS PRODUCER 450,000 Vaalco Energy (b) 1,557 OIL & GAS PRODUCER NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >OIL & GAS PRODUCERS--CONTINUED 70,000 McMoran Exploration (b) $ 1,366 NATURAL GAS PRODUCERS & LNG DEVELOPER ------------------------------------------------------------------------------ 39,687 >DISTRIBUTION/MARKETING/REFINING: 1.7% 245,000 Oneok 7,999 NATURAL GAS UTILITY, MARKETING & PROCESSING 193,000 Atmos Energy 5,558 NATURAL GAS UTILITY 55,600 Equitable Resources 3,781 NATURAL GAS PRODUCER & UTILITY ------------------------------------------------------------------------------ 17,338 ----------- ENERGY/MINERALS: TOTAL 117,776 ------------------------------------------------------------------------------ INDUSTRIAL GOODS/SERVICES: 9.7% >MACHINERY: 5.0% 282,000 Esco Technologies (b) 28,426 FILTRATION & TEST EQUIPMENT 194,000 Pentair 8,305 PUMPS, WATER TREATMENT & TOOLS 211,800 Nordson 7,261 DISPENSING SYSTEMS FOR ADHESIVES & COATINGS 110,000 Ametek 4,603 AEROSPACE/INDUSTRIAL INSTRUMENTS 50,000 Kaydon 1,392 SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS ------------------------------------------------------------------------------ 49,987 >INDUSTRIAL GOODS: 1.6% 308,000 Genlyte Group (b) 15,012 COMMERCIAL LIGHTING FIXTURES 25,000 Donaldson 758 INDUSTRIAL AIR FILTRATION ------------------------------------------------------------------------------ 15,770 >WATER: 1.0% 134,000 Cuno (b) 9,573 FILTRATION & FLUIDS CLARIFICATION ------------------------------------------------------------------------------ >CONSTRUCTION: 0.8% 112,700 Florida Rock Industries 8,267 CONCRETE & AGGREGATES ------------------------------------------------------------------------------ >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.5% 287,500 Spartech 5,118 PLASTICS DISTRIBUTION & COMPOUNDING ------------------------------------------------------------------------------ >OUTSOURCING SERVICES: 0.4% 400,000 Quanta Services (b) 3,520 ELECTRICAL & TELECOM CONSTRUCTION SERVICES ------------------------------------------------------------------------------ >INDUSTRIAL DISTRIBUTION: 0.3% 113,000 Nuco2 (b) 2,901 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS ------------------------------------------------------------------------------ 45 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >INDUSTRIAL SERVICES: 0.1% 95,000 Clark $ 1,361 EXECUTIVE COMPENSATION & BENEFITS CONSULTING ------------------------------------------------------------------------------ ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 96,497 ------------------------------------------------------------------------------ FINANCE: 8.7% >FINANCE COMPANIES: 4.4% 1,091,500 AmeriCredit (b) 27,833 AUTO LENDING 520,200 World Acceptance (b) 15,632 PERSONAL LOANS ------------------------------------------------------------------------------ 43,465 >INSURANCE: 2.6% 430,000 HCC Insurance Holdings 16,284 SPECIALTY INSURANCE 14,000 Markel (b) 4,746 SPECIALTY INSURANCE 35,000 Philadelphia Consolidated Holding (b) 2,967 SPECIALTY INSURANCE 91,000 United America Indemnity (b) 1,564 SPECIALTY INSURANCE ------------------------------------------------------------------------------ 25,561 >BANKS: 1.3% 263,000 TCF Financial 6,806 GREAT LAKES BANK 197,656 Chittenden 5,376 VERMONT & WESTERN MASSACHUSETTS BANK 20,000 First Financial BankShares 677 WEST TEXAS BANK 30,000 West Bancorporation 564 DES MOINES COMMERCIAL BANK ------------------------------------------------------------------------------ 13,423 >SAVINGS & LOAN: 0.4% 116,400 Anchor Bancorp Wisconsin 3,522 WISCONSIN THRIFT ------------------------------------------------------------------------------ ----------- FINANCE: TOTAL 85,971 ------------------------------------------------------------------------------ NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ OTHER INDUSTRIES: 0.7% >REAL ESTATE: 0.2% 100,000 Crescent Real Estate Equities $ 1,875 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality 366 HOTEL REAL ESTATE INVESTMENT TRUST ------------------------------------------------------------------------------ 2,241 >REGULATED UTILITIES: 0.2% 90,000 Northeast Utilities 1,877 REGULATED ELECTRIC UTILITY ------------------------------------------------------------------------------ >LOGISTICS: 0.2% 87,800 Heartland Express 1,706 REGIONAL DRY VAN TRUCKER ------------------------------------------------------------------------------ >WASTE MANAGEMENT: 0.1% 42,800 Waste Connections (b) 1,596 SOLID WASTE MANAGEMENT ------------------------------------------------------------------------------ ----------- OTHER INDUSTRIES: TOTAL 7,420 ----------- TOTAL COMMON STOCKS AND OTHER 900,281 EQUITY-LIKE SECURITIES: 90.5% (COST: $601,302) SHORT-TERM OBLIGATIONS: 9.8% $ 33,000 Citigroup Funding 3.10% - Due 7/1/05 33,000 33,000 LaSalle Bank 3.20% - Due 7/5/05 32,989 28,000 Verizon Network 3.26% - Due 7/8/05 27,982 3,283 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/01/05 at 3.00% collateralized by Federal Home Loan Mortgage Association Notes, maturing 3/24/08 market value $3,351 (repurchase proceeds: $3,283) 3,283 ------------------------------------------------------------------------------ (AMORTIZED COST: $97,254) 97,254 ----------- TOTAL INVESTMENTS: 100.3% 997,535 (COST: $698,556)(a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.3)% (3,136) ----------- TOTAL NET ASSETS: 100% $ 994,399 ============================================================================== 1-800-922-6769 46 -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purposes cost of investments was $698,556 and net unrealized appreciation was $298,979 consisting of gross unrealized appreciation of $332,259 and gross unrealized depreciation of $33,280. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: RCM Technologies 6.90% The aggregate cost and value of this company at June 30, 2005, was $5,636 and $3,333, respectively. Investments in affiliate companies represent 0.3% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005, were as follows: Dividend Income $ -- Net realized gain or loss $ -- Change in unrealized gain or loss $ (622) Purchases $ -- Proceeds from sales $ -- (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. At June 30, 2005, these securities were illiquid. At June 30, 2005, these securities (in thousands) amounted to $803 which represents 0.1% of total net assets. Additional information on these securities is as follows:
ACQUISITION SECURITY DATES SHARES (000) COST (000) VALUE (000) --------------------------------------------------------------------------------------- Locus Discovery, Series D, Pfd. 09/05/01 375 $ 1,500 $ 750 Metabolex, Series F 05/11/00 364 2,000 53 ---------- ----------- $ 3,500 $ 803 ========== ===========
(e) Represents fair value as determined in good faith under procedures by the Board of Trustees. 47 COLUMBIA ACORN INTERNATIONAL SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Compass Group 220,000 400,000 Grafton Group (Ireland) 70,000 105,000 William Hill 0 80,000 >SWITZERLAND BKW Energie 0 11,200 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) >SWEDEN Gambro 0 38,900 ---------------------------------------------------------------------------- ASIA >JAPAN Ito En 12,000 32,800 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Anglo Irish Bank (Ireland) 282,442 244,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) >ITALY Autogrill 70,000 0 ---------------------------------------------------------------------------- ASIA >JAPAN Fast Retailing 11,500 0 Olympus Optical 23,000 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Noranda 50,000 0 1-800-922-6769 48 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ COMMON STOCKS: 95.7% ------------------------------------------------------------------------------ EUROPE: 60.3% >UNITED KINGDOM/IRELAND: 22.4% 244,000 Anglo Irish Bank (Ireland) $ 3,022 SMALL BUSINESS & MIDDLE MARKET BANKING 192,000 Exel 2,907 GLOBAL LOGISTICS & FREIGHT FORWARDING 132,000 Depfa Bank (Ireland) 2,109 INTERNATIONAL PUBLIC SECTOR FINANCE 130,000 IAWS (Ireland) 1,816 MANUFACTURER OF BAKED GOODS 400,000 Compass Group 1,678 INTERNATIONAL CONCESSION & CONTRACT CATERER 105,000 Grafton Group (Ireland) (b) 1,215 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 80,000 William Hill 770 LARGEST BOOKMAKER 80,000 British Sky Broadcasting 754 DIGITAL SATELLITE BROADCASTING 40,000 Intermediate Capital 746 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 25,000 Kerry (Ireland) 617 FOOD INGREDIENTS 17,000 Cobham 431 AEROSPACE COMPONENTS ------------------------------------------------------------------------------ 16,065 >FRANCE/BELGIUM: 13.2% 33,000 Neopost 2,900 POSTAGE METER MACHINES 170,000 SES Global 2,559 SATELLITE BROADCASTING SERVICES 27,000 Imerys 1,856 INDUSTRIAL MINERALS PRODUCER 34,000 Belgacom (Belgium) 1,158 TELECOM SERVICE PROVIDER 14,500 Essilor International 987 EYEGLASS LENSES ------------------------------------------------------------------------------ 9,460 >SWITZERLAND: 12.1% 10,200 Kuehne & Nagel 2,157 FREIGHT FORWARDING/LOGISTICS 14,000 Swatch Group 1,959 WATCH & ELECTRONICS MANUFACTURER 1,900 Geberit International 1,212 PLUMBING SUPPLIES 10,000 Synthes 1,094 PRODUCTS FOR ORTHOPEDIC SURGERY 2,300 Schindler 828 ELEVATOR MANUFACTURER & SERVICE PROVIDER 11,200 BKW Energie 700 ELECTRIC UTILITY 1,200 Givaudan 696 INDUSTRIAL FRAGRANCES & FLAVORS ------------------------------------------------------------------------------ 8,646 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >NORWAY: 3.6% 157,500 Den Norske Bank $ 1,632 LARGEST NORWEGIAN BANK 26,000 Orkla 953 FOOD & DIVERSIFIED CONSUMER GOODS ------------------------------------------------------------------------------ 2,585 >CZECH REPUBLIC: 2.9% 16,840 Komercni Banka 2,109 LEADING CZECH UNIVERSAL BANK ------------------------------------------------------------------------------ >SPAIN: 2.8% 73,000 Red Electrica 2,015 SPANISH POWER GRID ------------------------------------------------------------------------------ >GERMANY: 2.6% 13,000 Deutsche Boerse 1,014 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 12,000 Rhoen-Klinikum 830 HOSPITAL MANAGEMENT ------------------------------------------------------------------------------ 1,844 >SWEDEN: 0.7% 38,900 Gambro 519 PRODUCTS/SERVICES FOR RENAL CARE ------------------------------------------------------------------------------ ----------- EUROPE: TOTAL 43,243 ------------------------------------------------------------------------------ ASIA: 23.7% >JAPAN: 17.4% 68,000 Shimano 1,930 BICYCLE COMPONENTS & FISHING TACKLE 16,200 Hoya 1,861 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 48,000 Daito Trust Construction 1,792 APARTMENT BUILDER 32,800 Ito En 1,682 BOTTLED TEA & OTHER BEVERAGES 1,627 Jupiter Telecommunications (b) 1,367 LARGEST CABLE SERVICE PROVIDER IN JAPAN 77,000 Ushio 1,365 INDUSTRIAL LIGHT SOURCES 11,000 Funai Electric 1,125 CONSUMER ELECTRONICS 181,800 Hiroshima Bank 826 REGIONAL BANK 94,000 Bank of Yokohama 540 REGIONAL BANK ------------------------------------------------------------------------------ 12,488 >HONG KONG/CHINA: 4.1% 650,000 Hong Kong Exchanges & Clearing 1,684 HONG KONG EQUITY & DERIVATIVES OPERATOR 2,000,000 Global Bio-Chem Technology Group (China) 1,239 REFINER OF CORN-BASED COMMODITIES ------------------------------------------------------------------------------ 2,923 49 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >SINGAPORE: 2.2% 1,600,000 Comfort Del Gro $ 1,599 TAXI & MASS TRANSIT SERVICE ------------------------------------------------------------------------------ ----------- ASIA: TOTAL 17,010 ------------------------------------------------------------------------------ OTHER COUNTRIES: 7.7% >CANADA: 5.0% 300,000 Kinross Gold (b) 1,833 GOLD MINING 47,000 Talisman Energy 1,758 OIL & GAS PRODUCER ------------------------------------------------------------------------------ 3,591 >AUSTRALIA: 2.7% 330,000 Lion Nathan 1,897 BEER BREWER/DISTRIBUTOR ------------------------------------------------------------------------------ ----------- OTHER: TOTAL 5,488 ------------------------------------------------------------------------------ LATIN AMERICA: 4.0% >ARGENTINA: 4.0% 37,000 Tenaris 2,896 STEEL PIPE FOR OIL WELLS & PIPELINES ------------------------------------------------------------------------------ ----------- LATIN AMERICA: TOTAL 2,896 ----------- TOTAL COMMON STOCKS: 95.7% 68,637 (COST: $53,994) PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ SHORT-TERM OBLIGATION: 4.3% $ 3,087 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $3,149 (repurchase proceeds: $3,087) $ 3,087 ------------------------------------------------------------------------------ (COST: $3,087) 3,087 ----------- TOTAL INVESTMENTS: 100.0% 71,724 (COST: $57,081)(a)(C) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (14) ----------- TOTAL NET ASSETS: 100% $ 71,710 ============================================================================== -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purpose cost of investments was $57,081 and net unrealized appreciation was $14,643 consisting of gross unrealized appreciation of $16,972 and gross unrealized depreciation of $2,329. (b) Non-income producing security. (c) On June 30, 2005, the Fund's total investments were denominated in currencies as follows: % OF TOTAL CURRENCY VALUE NET ASSETS -------------------------------------------------- Euro $22,098 30.8% Japanese Yen 12,488 17.4 Swiss Franc 8,646 12.1 British Pounds 7,285 10.2 US Dollar 5,983 8.3 Canadian Dollar 3,591 5.0 Other currencies less than 5% of total net assets 11,633 16.2 ------- ------- $71,724 100.0% ======= ======= 1-800-922-6769 50 COLUMBIA ACORN INTERNATIONAL SELECT >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2005, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 5,892 8.2% Industrial Materials 3,068 4.3 Machinery 2,900 4.1 Steel 2,896 4.0 Electrical Components 1,796 2.5 Construction 1,792 2.5 Industrial Distribution 1,215 1.7 Specialty Chemicals 696 1.0 ---------------------------------------------------------------------------- 20,255 28.3 >CONSUMER GOODS/SERVICES Durable Goods 3,889 5.4 Beverages 3,579 5.0 Food 2,433 3.4 Restaurants 1,678 2.3 Consumer Electronics 1,125 1.6 Non-Durables 953 1.3 Gaming 770 1.1 ---------------------------------------------------------------------------- 14,427 20.1 >FINANCE Banks 10,238 14.3 Other Finance Companies 746 1.0 ---------------------------------------------------------------------------- 10,984 15.3 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION Financial Processors $ 2,698 3.8% Satellite Broadcasting and Services 2,559 3.6 Semiconductors and Related Equipment 1,861 2.6 Cable Television 1,367 1.9 Telephone Services 1,158 1.6 Television Broadcasting 754 1.0 ---------------------------------------------------------------------------- 10,397 14.5 >ENERGY/MINERALS Non-Ferrous Metals 1,833 2.6 Oil/Gas Producers 1,758 2.4 Agricultural Commodities (includes Forestry) 1,239 1.7 ---------------------------------------------------------------------------- 4,830 6.7 >HEALTH CARE Medical Equipment 2,081 2.9 Hospital Management 830 1.2 HealthCare Services 519 0.7 ---------------------------------------------------------------------------- 3,430 4.8 >OTHER INDUSTRIES Regulated Utilities 2,715 3.8 Transportation 1,599 2.2 ---------------------------------------------------------------------------- 4,314 6.0 --------------------------- TOTAL COMMON STOCKS 68,637 95.7 SHORT-TERM OBLIGATION 3,087 4.3 --------------------------- TOTAL INVESTMENTS 71,724 100.0 CASH AND OTHER ASSETS LESS LIABILITIES (14) 0.0 --------------------------- NET ASSETS $ 71,710 100.0% ============================================================================ 51 COLUMBIA ACORN SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Coach 1,260,000 1,400,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Costco 820,000 845,000 ITT Educational Services 1,451,000 1,550,000 International Speedway Motors 550,000 670,000 ---------------------------------------------------------------------------- INFORMATION American Tower 2,300,000 2,350,000 Aspect Communications 2,074,700 2,182,000 CDW 525,000 690,000 Novell 4,000,000 5,000,000 Tellabs 8,100,000 8,900,000 Tribune Company 0 490,000 ---------------------------------------------------------------------------- FINANCE Conseco 0 1,800,000 Nuveen Investments 0 975,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Mine Safety Appliances 0 850,000 Quanta Services 1,576,000 2,810,000 Spartech 0 173,000 Worthington Industries 0 2,000,000 ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 400,000 450,000 Pride International 1,654,000 1,854,000 NUMBER OF SHARES --------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Herman Miller 1,160,000 471,032 ---------------------------------------------------------------------------- INFORMATION FTI Consulting 925,000 143,200 McAfee 2,539,900 0 Moodys 940,000 0 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Synopsys 860,000 0 1-800-922-6769 52 COLUMBIA ACORN SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ COMMON STOCKS: 90.6% ------------------------------------------------------------------------------ CONSUMER GOODS/SERVICES: 29.4% >RETAIL: 11.4% 3,000,000 Safeway $ 67,770 RETAIL FOOD & DRUG STORES 975,000 Abercrombie & Fitch 66,982 TEEN APPAREL RETAILER 845,000 Costco 37,873 WAREHOUSE SUPERSTORES ------------------------------------------------------------------------------ 172,625 >CONSUMER SERVICES: 8.0% 1,550,000 ITT Educational Services (b) 82,801 POSTSECONDARY DEGREE PROGRAMS 728,000 Weight Watchers (b) 37,572 WEIGHT LOSS PROGRAM ------------------------------------------------------------------------------ 120,373 >FURNITURE & MANUFACTURERS: 4.1% 1,400,000 Coach (b) 46,998 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 471,032 Herman Miller 14,527 OFFICE FURNITURE ------------------------------------------------------------------------------ 61,525 >LEISURE VEHICLES: 3.4% 1,050,000 Harley-Davidson 52,080 MOTORCYCLES & RELATED MERCHANDISE ------------------------------------------------------------------------------ >ENTERTAINMENT: 2.5% 670,000 International Speedway Motors 37,694 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR ------------------------------------------------------------------------------ ----------- CONSUMER GOODS/SERVICES: TOTAL 444,297 ------------------------------------------------------------------------------ INFORMATION: 26.3% >TELECOMMUNICATIONS EQUIPMENT: 5.1% 8,900,000 Tellabs (b) 77,430 TELECOMMUNICATIONS EQUIPMENT ------------------------------------------------------------------------------ >BUSINESS SOFTWARE: 3.7% 5,000,000 Novell (b) 31,000 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 2,182,000 Aspect Communications (b) 24,504 CALL CENTER SOFTWARE ------------------------------------------------------------------------------ 55,504 >INTERNET: 3.5% 9,600,000 Skillsoft Publishing (b)(c) 33,120 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 820,000 IAC/Interactive Corp (b) 19,721 DOMINATE INTERNET MIDDLEMAN ------------------------------------------------------------------------------ 52,841 >MOBILE COMMUNICATIONS: 3.3% 2,350,000 American Tower (b) 49,397 COMMUNICATION TOWERS IN USA & MEXICO ------------------------------------------------------------------------------ NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ >TELEVISION PROGRAMMING/CATV: 2.8% 896,350 Liberty Global (formerly known as Liberty Media International) (b) $41,833 CATV HOLDING COMPANY ------------------------------------------------------------------------------ >ELECTRONICS DISTRIBUTION: 2.6% 690,000 CDW 39,392 TECHNOLOGY RESELLER ------------------------------------------------------------------------------ >INSTRUMENTATION: 2.1% 1,400,000 Tektronix 32,578 ANALYTICAL INSTRUMENTS ------------------------------------------------------------------------------ >BUSINESS INFORMATION: 1.5% 537,800 Fair Isaac 19,630 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 143,200 FTI Consulting (b) 2,993 FINANCIAL CONSULTING FIRM ------------------------------------------------------------------------------ 22,623 >PUBLISHING: 1.1% 490,000 Tribune Company 17,238 NEWSPAPERS & TV STATIONS ------------------------------------------------------------------------------ >COMPUTER SERVICES: 0.6% 2,445,000 AnswerThink Consulting (b)(c) 8,680 I/T INTEGRATION & BEST PRACTICE RESEARCH ------------------------------------------------------------------------------ ----------- INFORMATION: TOTAL 397,516 ------------------------------------------------------------------------------ FINANCE: 17.1% >MONEY MANAGEMENT: 6.7% 2,500,000 Janus Capital 37,600 MANAGES MUTUAL FUNDS 975,000 Nuveen Investments 36,680 SPECIALTY MUTUAL FUNDS 729,500 SEI Investments 27,247 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ------------------------------------------------------------------------------ 101,527 >INSURANCE: 5.3% 120,000 Markel (b) 40,680 SPECIALTY INSURANCE 1,800,000 Conseco (b) 39,276 INDIVIDUAL LIFE INSURANCE & ANNUITY PRODUCTS ------------------------------------------------------------------------------ 79,956 >BANKS: 5.1% 1,970,000 TCF Financial 50,984 GREAT LAKES BANK 750,000 Associated Banc-Corp 25,245 MIDWEST BANK ------------------------------------------------------------------------------ 76,229 ----------- FINANCE: TOTAL 257,712 ------------------------------------------------------------------------------ 53 NUMBER OF SHARES VALUE (000) ------------------------------------------------------------------------------ INDUSTRIAL GOODS/SERVICES: 8.7% >INDUSTRIAL GOODS: 2.6% 850,000 Mine Safety Appliances $ 39,270 SAFETY EQUIPMENT ------------------------------------------------------------------------------ >LOGISTICS: 2.2% 661,000 Expeditors International of Washington 32,924 INTERNATIONAL FREIGHT FORWARDER ------------------------------------------------------------------------------ >STEEL: 2.1% 2,000,000 Worthington Industries 31,600 STEEL PROCESSING ------------------------------------------------------------------------------ >OUTSOURCING SERVICES & TRAINING: 1.6% 2,810,000 Quanta Services (b) 24,728 ELECTRICAL & TELECOM CONSTRUCTION SERVICES ------------------------------------------------------------------------------ >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 0.2% 173,000 Spartech 3,079 PLASTICS DISTRIBUTION & COMPOUNDING ------------------------------------------------------------------------------ ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 131,601 ------------------------------------------------------------------------------ HEALTH CARE: 5.0% >SERVICES: 5.0% 530,000 Coventry Health Care (b) 37,497 PPO NETWORK 910,000 Lincare Holdings (b) 37,164 HOME HEALTH CARE SERVICES ------------------------------------------------------------------------------ 74,661 ----------- HEALTH CARE: TOTAL 74,661 ------------------------------------------------------------------------------ ENERGY/MINERALS: 4.1% >OIL SERVICES: 4.1% 1,854,000 Pride International (b) 47,648 OFFSHORE DRILLING CONTRACTOR 450,000 FMC Technologies (b) 14,386 OIL & GAS WELL HEAD MANUFACTURER ------------------------------------------------------------------------------ 62,034 ----------- ENERGY & MINERALS: TOTAL 62,034 ----------- TOTAL COMMON STOCKS: 90.6% 1,367,821 (COST: $1,146,802) PRINCIPAL AMOUNT (000) VALUE (000) ------------------------------------------------------------------------------ SHORT-TERM OBLIGATIONS: 8.3% $ 32,000 Toyota Motor Credit 3.25% - Due 7/6/05 $ 31,985 30,000 General Electric Capital 3.25% - Due 7/7/05 29,984 26,000 Prudential Funding 3.10% - Due 7/1/05 26,000 26,000 LaSalle Bank 3.20% - Due 7/5/05 25,991 11,354 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $11,583 (repurchase proceeds: $11,355) 11,354 ------------------------------------------------------------------------------ (AMORTIZED COST: $125,314) 125,314 ----------- TOTAL INVESTMENTS: 98.9% 1,493,135 (COST: $1,272,116)(a) CASH AND OTHER ASSETS LESS LIABILITIES: 1.1% 17,357 ----------- TOTAL NET ASSETS: 100% $ 1,510,492 ============================================================================== >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purposes cost of investments was $1,272,116 and net unrealized appreciation was $221,019 consisting of gross unrealized appreciation of $262,819 and gross unrealized depreciation of $41,800. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: Skillsoft Publishing 8.98% AnswerThink Consulting 5.69 The aggregate cost and value of these companies at June 30, 2005, was $71,464 and $41,800 respectively. Investments in affiliate companies represent 2.8% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005, were as follows: Dividend Income $ -- Net realized gain or loss $ -- Change in unrealized gain or loss $ (22,985) Purchases $ 13,030 Proceeds from sales $ -- 1-800-922-6769 54 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 COLUMBIA ACORN ACORN ACORN JUNE 30, 2005 FUND INTERNATIONAL USA ------------------------------------------------------------------------------------------------------------------------------ (IN THOUSANDS) ASSETS: Unaffiliated investments, at cost $ 7,516,154 $ 1,610,554 $ 692,920 Affiliated investments, at cost (See Note 4) 1,549,261 -- 5,636 ------------------------------------------------------------------------------------------------------------------------------ Unaffiliated investments, at value $ 12,511,138 $ 2,261,705 $ 994,202 Affiliated investments, at value (See Note 4) 1,988,672 -- 3,333 Cash 1 --* --* Foreign currency (cost: Columbia Acorn Fund $2,163; Columbia Acorn International $1,853; Columbia Acorn International Select $44) 2,150 1,850 -- Receivable for: Investments sold 22,839 19,931 -- Fund shares sold 21,664 2,402 1,275 Dividends and interest 7,263 4,474 191 Payment on a liquidated security 161 -- 54 Foreign tax reclaims 1,020 839 4 Deferred Trustees' Compensation Investments 1,362 419 95 ------------------------------------------------------------------------------------------------------------------------------ Total Assets 14,556,270 2,291,620 999,154 LIABILITIES: Expense reimbursement due to Investment Adviser -- -- -- Payable for: Investments purchased 21,915 18,883 2,652 Fund shares redeemed 16,061 1,752 888 Management fee 7,487 1,464 704 Administration fee 520 82 34 12b-1 Service & Distribution fees 2,579 86 110 Reports to shareholders 1,695 321 146 Deferred Trustees' fees 1,362 419 95 Transfer agent fees 594 87 38 Trustees' fees 42 -- -- Custody fees 23 81 2 Deferred foreign capital gains tax payable -- 2 -- Other liabilities 1,185 186 86 ------------------------------------------------------------------------------------------------------------------------------ Total Liabilities 53,463 23,363 4,755 ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399 ============================================================================================================================== COMPOSITION OF NET ASSETS: Paid in capital $ 8,620,923 $ 1,570,855 $ 666,167 Undistributed (Overdistributed) net investment income (Accumulated net investment loss) 7,920 3,915 1,568 Accumulated net realized gain (loss) 439,517 42,430 27,631 Net unrealized appreciation (depreciation) on: Investments 5,434,395 651,151 298,979 Foreign currency translations (109) (91) -- Foreign capital gains tax -- (3) -- Liquidated security 161 -- 54 ------------------------------------------------------------------------------------------------------------------------------ NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399 ============================================================================================================================== Net asset value per share - Class A (a) $ 26.21 $ 29.23 $ 25.73 (Net assets/shares) ($2,852,237/108,814) ($88,608/3,032) ($126,647/4,923) Maximum offering price per share - Class A (b) $ 27.81 $ 31.01 $ 27.30 (Net asset value per share/ front-end sales charge) ($26.21/0.9425) ($29.23/0.9425) ($25.73/0.9425) Net asset value and offering price per share - Class B (a) $ 25.37 $ 28.74 $ 24.97 (Net assets/shares) ($1,365,518/53,831) ($60,364/2,100) ($71,766/2,874) Net asset value and offering price per share - Class C (a) $ 25.35 $ 28.73 $ 24.96 (Net assets/shares) ($1,102,416/43,491) ($35,220/1,226) ($41,376/1,657) Net asset value and offering price per share - Class Z (a) $ 26.79 $ 29.46 $ 26.21 (Net assets/shares) ($9,182,636/342,777) ($2,084,065/70,732) ($754,610/28,787)
COLUMBIA COLUMBIA ACORN ACORN JUNE 30, 2005 INTERNATIONAL SELECT SELECT ------------------------------------------------------------------------------------------------------ (IN THOUSANDS) ASSETS: Unaffiliated investments, at cost $ 57,081 $ 1,200,652 Affiliated investments, at cost (See Note 4) -- 71,464 ------------------------------------------------------------------------------------------------------ Unaffiliated investments, at value $ 71,724 $ 1,451,335 Affiliated investments, at value (See Note 4) -- 41,800 Cash 1 1 Foreign currency (cost: Columbia Acorn Fund $2,163; Columbia Acorn International $1,853; Columbia Acorn International Select $44) 44 -- Receivable for: Investments sold -- 12,593 Fund shares sold 101 8,263 Dividends and interest 90 242 Payment on a liquidated security -- -- Foreign tax reclaims 39 -- Deferred Trustees' Compensation Investments -- -- ------------------------------------------------------------------------------------------------------ Total Assets 71,999 1,514,234 LIABILITIES: Expense reimbursement due to Investment Adviser 1 -- Payable for: Investments purchased 149 436 Fund shares redeemed 9 1,555 Management fee 55 971 Administration fee 2 52 12b-1 Service & Distribution fees 7 381 Reports to shareholders 37 205 Deferred Trustees' fees 12 47 Transfer agent fees 5 63 Trustees' fees 3 -- Custody fees -- 3 Deferred foreign capital gains tax payable -- -- Other liabilities 9 29 ------------------------------------------------------------------------------------------------------ Total Liabilities 289 3,742 ------------------------------------------------------------------------------------------------------ NET ASSETS $ 71,710 $ 1,510,492 ====================================================================================================== COMPOSITION OF NET ASSETS: Paid in capital $ 88,128 $ 1,260,521 Undistributed (Overdistributed) net investment income (Accumulated net investment loss) (554) (3,585) Accumulated net realized gain (loss) (30,502) 32,537 Net unrealized appreciation (depreciation) on: Investments 14,643 221,019 Foreign currency translations (5) -- Foreign capital gains tax -- -- Liquidated security -- -- ------------------------------------------------------------------------------------------------------ NET ASSETS $ 71,710 $ 1,510,492 ====================================================================================================== Net asset value per share - Class A (a) $ 17.69 $ 20.68 (Net assets/shares) ($6,175/349) ($638,215/30,866) Maximum offering price per share - Class A (b) $ 18.77 $ 21.94 (Net asset value per share/ front-end sales charge) ($17.69/0.9425) ($20.68/0.9425) Net asset value and offering price per share - Class B (a) $ 17.25 $ 20.01 (Net assets/shares) ($5,779/335) ($193,930/9,693) Net asset value and offering price per share - Class C (a) $ 17.26 $ 20.00 (Net assets/shares) ($3,246/188) ($129,129/6,457) Net asset value and offering price per share - Class Z (a) $ 17.84 $ 20.97 (Net assets/shares) ($56,510/3,168) ($549,218/26,192)
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge and/or applicable redemption fee. (b) On sales of $50,000 or more the offering price is reduced. * Rounds to less than $500. See accompanying notes to financial statements. 1-800-922-6769 56 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005
COLUMBIA COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA ACORN ACORN ACORN INTERNATIONAL ACORN (IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT ---------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income $ 71,373 $ 31,907 $ 5,871 $ 1,004 $ 3,502 Dividend income from affiliates (See Note 4) 14,830 -- -- -- -- Interest income 14,191 1,190 1,165 53 1,789 ---------------------------------------------------------------------------------------------------------------------- 100,394 33,097 7,036 1,057 5,291 Foreign taxes withheld (3,008) (2,545) (6) (94) -- ---------------------------------------------------------------------------------------------------------------------- Total Investment Income 97,386 30,552 7,030 963 5,291 EXPENSES: Management fee 44,457 8,705 4,040 315 5,556 Administration fee 2,969 471 193 14 287 12b-1 Service and Distribution fees: Class A 3,343 99 143 7 686 Class B 5,677 244 295 23 772 Class C 5,276 164 193 14 569 Transfer agent fees: Class A 1,039 45 57 4 247 Class B 1,134 67 66 9 200 Class C 640 26 26 3 91 Class Z 1,293 639 122 33 200 Custody fees 826 787 16 30 19 Trustees' fees 323 53 21 20 65 Registration & blue sky fees 538 208 94 33 118 Compliance fees 259 40 16 1 24 Non-recurring costs (See Note 8) 85 13 6 --* 8 Other expenses 1,969 281 146 42 224 ---------------------------------------------------------------------------------------------------------------------- Total expenses 69,828 11,842 5,434 548 9,066 Less custody fees paid indirectly (18) (1) (2) --* (4) Less reimbursement of expenses by Investment Adviser -- -- -- (7) -- Less expenses waived by Investment Adviser (395) (39) (16) (1) (117) Less reimbursement of expenses by Transfer Agent (785) (200) (51) (11) (118) Non-recurring costs reimbursed (See Note 8) (85) (13) (6) --* (8) ---------------------------------------------------------------------------------------------------------------------- Net Expenses 68,545 11,589 5,359 529 8,819 ---------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 28,841 18,963 1,671 434 (3,528) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 440,635 106,812 30,997 664 32,796 Affiliated investments (See Note 4) 1,653 -- -- -- -- Foreign currency transactions (344) (638) -- (15) -- ---------------------------------------------------------------------------------------------------------------------- Net realized gain 441,944 106,174 30,997 649 32,796 ====================================================================================================================== Net change in net unrealized appreciation (depreciation) on: Unaffiliated investments (50,748) (64,434) 19,017 (885) 1 Affiliated investments (See Note 4) (41,103) -- (622) -- (22,985) Foreign currency translations (499) (527) -- (7) -- Foreign capital gains tax -- (3) -- -- -- Liquidated security 161 -- 54 -- -- ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) (92,189) (64,964) 18,449 (892) (22,984) ====================================================================================================================== Net realized and unrealized gain (loss) 349,755 41,210 49,446 (243) 9,812 ---------------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets resulting from Operations $ 378,596 $ 60,173 $ 51,117 $ 191 $ 6,284 ======================================================================================================================
* 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 SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 OPERATIONS: Net investment income (loss) $ 28,841 $ (13,051) $ 18,963 $ 16,703 Net realized gain on investments and foreign currency transactions 441,944 693,184 106,174 175,881 Net change in net unrealized appreciation (depreciation) on investments, foreign currency translations, foreign capital gains tax and liquidated security (92,189) 1,701,999 (64,964) 276,935 ------------------------------------------------------------------------------------------------------- Net Increase from Operations 378,596 2,382,132 60,173 469,519 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (966) (374) Net realized gain -- Class A (41,222) (89,952) -- -- Net investment income -- Class B -- -- (281) (75) Net realized gain -- Class B (20,635) (49,011) -- -- Net investment income -- Class C -- -- (172) (42) Net realized gain -- Class C (16,577) (37,671) -- -- Net investment income -- Class Z -- (5,620) (29,780) (16,439) Net realized gain -- Class Z (130,799) (290,184) -- -- ------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders (209,233) (472,438) (31,199) (16,930) SHARE TRANSACTIONS: Subscriptions -- Class A 415,008 703,271 22,421 19,736 Distributions reinvested -- Class A 37,158 81,405 785 306 Redemptions -- Class A (302,648) (453,387) (6,328) (17,531) ------------------------------------------------------------------------------------------------------- Net Increase -- Class A 149,518 331,289 16,878 2,511 Subscriptions -- Class B 27,942 90,732 9,579 10,422 Distributions reinvested -- Class B 18,804 44,616 247 66 Redemptions -- Class B (89,021) (146,696) (5,267) (7,152) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (42,275) (11,348) 4,559 3,336 Subscriptions -- Class C 78,997 145,878 6,602 8,030 Distributions reinvested -- Class C 13,377 30,636 141 35 Redemptions -- Class C (80,206) (136,434) (2,650) (6,936) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 12,168 40,080 4,093 1,129 Subscriptions -- Class Z 805,490 1,596,519 278,879 206,434 Distributions reinvested -- Class Z 112,557 254,191 23,508 14,669 Redemptions -- Class Z (545,473) (1,447,781) (163,679) (284,074) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 372,574 402,929 138,708 (62,971) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 491,985 762,950 164,238 (55,995) ------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 33 86 ------------------------------------------------------------------------------------------------------- Total Increase in Net Assets 661,348 2,672,644 193,245 396,680 NET ASSETS: Beginning of period 13,841,459 11,168,815 2,075,012 1,678,332 ------------------------------------------------------------------------------------------------------- End of period $14,502,807 $13,841,459 $2,268,257 $2,075,012 ======================================================================================================= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 7,920 $ (20,921) $ 3,915 $ 16,151 =======================================================================================================
COLUMBIA COLUMBIA ACORN COLUMBIA ACORN USA INTERNATIONAL SELECT ACORN SELECT (UNAUDITED) (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, ----------------------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 2005 2004 OPERATIONS: Net investment income (loss) $ 1,671 $ (6,571) $ 434 $ 51 $ (3,528) $ (8,994) Net realized gain on investments and foreign currency transactions 30,997 28,245 649 7,208 32,796 47,420 Net change in net unrealized appreciation (depreciation) on investments, foreign currency translations, foreign capital gains tax and liquidated security 18,449 121,948 (892) 2,762 (22,984) 133,791 ----------------------------------------------------------------------------------------------------------------------------------- Net Increase from Operations 51,117 143,622 191 10,021 6,284 172,217 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (79) (6) -- -- Net realized gain -- Class A (1,741) (622) -- -- (2,737) (10,300) Net investment income -- Class B -- -- (46) -- -- -- Net realized gain -- Class B (1,039) (415) -- -- (885) (3,895) Net investment income -- Class C -- -- (24) -- -- -- Net realized gain -- Class C (592) (224) -- -- (576) (2,321) Net investment income -- Class Z -- -- (888) (151) -- -- Net realized gain -- Class Z (10,141) (3,487) -- -- (3,269) (8,700) ----------------------------------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders (13,513) (4,748) (1,037) (157) (7,467) (25,216) SHARE TRANSACTIONS: Subscriptions -- Class A 20,621 27,362 2,233 1,860 185,756 274,350 Distributions reinvested -- Class A 1,590 572 71 5 2,555 9,614 Redemptions -- Class A (12,727) (22,954) (408) (763) (66,604) (91,343) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 9,484 4,980 1,896 1,102 121,707 192,621 Subscriptions -- Class B 1,922 4,936 1,294 1,664 21,878 61,755 Distributions reinvested -- Class B 948 375 41 -- 795 3,496 Redemptions -- Class B (6,087) (10,452) (614) (586) (12,553) (19,113) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (3,217) (5,141) 721 1,078 10,120 46,138 Subscriptions -- Class C 3,125 5,707 1,001 786 32,636 49,173 Distributions reinvested -- Class C 490 187 20 -- 473 1,934 Redemptions -- Class C (3,206) (8,114) (291) (2,429) (13,807) (17,236) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 409 (2,220) 730 (1,643) 19,302 33,871 Subscriptions -- Class Z 111,981 199,048 13,951 11,787 180,330 204,740 Distributions reinvested -- Class Z 8,943 3,134 582 146 2,389 6,716 Redemptions -- Class Z (41,487) (161,267) (3,618) (7,456) (79,260) (114,619) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 79,437 40,915 10,915 4,477 103,459 96,837 ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 86,113 38,534 14,262 5,014 254,588 369,467 ----------------------------------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 6 4 -- -- ----------------------------------------------------------------------------------------------------------------------------------- Total Increase in Net Assets 123,717 177,408 13,422 14,882 253,405 516,468 NET ASSETS: Beginning of period 870,682 693,274 58,288 43,406 1,257,087 740,619 ----------------------------------------------------------------------------------------------------------------------------------- End of period $ 994,399 $ 870,682 $ 71,710 $ 58,288 $1,510,492 $1,257,087 =================================================================================================================================== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 1,568 $ (103) $ (554) $ 49 $ (3,585) $ (57) ===================================================================================================================================
See accompanying notes to financial statements. 1-800-922-6769 Spread 58-59 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 Subscriptions -- Class A 16,259 29,671 765 809 Shares issued in reinvestment and capital gains -- Class A 1,446 3,255 27 13 Less shares redeemed -- Class A (11,869) (19,230) (215) (722) ------------------------------------------------------------------------------------------------------- Net Increase -- Class A 5,836 13,696 577 100 Subscriptions -- Class B 1,130 3,928 332 438 Shares issued in reinvestment and capital gains -- Class B 756 1,836 8 3 Less shares redeemed -- Class B (3,599) (6,388) (183) (301) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (1,713) (624) 157 140 Subscriptions -- Class C 3,191 6,282 229 333 Shares issued in reinvestment and capital gains -- Class C 538 1,261 5 2 Less shares redeemed -- Class C (3,242) (5,916) (92) (293) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 487 1,627 142 42 Subscriptions -- Class Z 30,921 66,041 9,414 8,246 Shares issued in reinvestment and capital gains -- Class Z 4,286 9,967 805 624 Less shares redeemed -- Class Z (20,944) (60,621) (5,589) (11,723) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 14,263 15,387 4,630 (2,853) ------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 18,873 30,086 5,506 (2,571) -------------------------------------------------------------------------------------------------------
COLUMBIA COLUMBIA ACORN COLUMBIA ACORN USA INTERNATIONAL SELECT ACORN SELECT (UNAUDITED) (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, ----------------------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 2005 2004 Subscriptions -- Class A 835 1,239 124 116 9,331 14,418 Shares issued in reinvestment and capital gains -- Class A 63 24 4 --* 126 473 Less shares redeemed -- Class A (517) (1,043) (23) (49) (3,358) (4,824) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 381 220 105 67 6,099 10,067 Subscriptions -- Class B 80 229 74 108 1,133 3,336 Shares issued in reinvestment and capital gains -- Class B 39 16 2 -- 41 177 Less shares redeemed -- Class B (255) (485) (35) (38) (653) (1,035) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (136) (240) 41 70 521 2,478 Subscriptions -- Class C 129 261 58 52 1,692 2,649 Shares issued in reinvestment and capital gains -- Class C 20 8 1 -- 24 98 Less shares redeemed -- Class C (134) (379) (17) (167) (718) (929) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 15 (110) 42 (115) 998 1,818 Subscriptions -- Class Z 4,462 8,912 768 707 8,931 10,606 Shares issued in reinvestment and capital gains -- Class Z 349 128 33 10 116 326 Less shares redeemed -- Class Z (1,659) (7,291) (202) (479) (3,928) (5,997) ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 3,152 1,749 599 238 5,119 4,935 ----------------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 3,412 1,619 787 260 12,737 19,298 -----------------------------------------------------------------------------------------------------------------------------------
* Rounds to less than 500 shares. See accompanying notes to financial statements. 1-800-922-6769 Spread 60-61 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS
(UNAUDITED) SIX MONTHS ENDED COLUMBIA ACORN FUND CLASS Z JUNE 30, YEAR ENDED DECEMBER 31, ---------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000 NET ASSET VALUE, BEGINNING OF PERIOD $ 26.45 $ 22.56 $ 15.50 $ 17.88 $ 17.21 $ 18.53 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.09 0.04 0.03 0.02 0.05 0.10 Net realized and unrealized gain (loss) 0.64 4.78 7.05 (2.40) 1.01 1.55 ---------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 0.73 4.82 7.08 (2.38) 1.06 1.65 ---------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.02) -- -- (0.04) (0.11) From net realized gains (0.39) (0.91) (0.02) -- (0.35) (2.86) ---------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.39) (0.93) (0.02) -- (0.39) (2.97) ================================================================================================================================== NET ASSET VALUE, END OF PERIOD $ 26.79 $ 26.45 $ 22.56 $ 15.50 $ 17.88 $ 17.21 ================================================================================================================================== Total Return (b) 2.78%(c)(d) 21.51%(d) 45.68% (13.31)% 6.14% 10.06% ================================================================================================================================== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (e) 0.76%(f) 0.81% 0.80% 0.82% 0.82% 0.83% Net investment income (e) 0.66%(f) 0.18% 0.17% 0.15% 0.28% 0.55% Reimbursement 0.02%(f) 0.02% -- -- -- -- Portfolio turnover rate 8%(c) 20% 10% 13% 20% 29% Net assets at end of period (IN MILLIONS) $ 9,183 $ 8,689 $ 7,065 $ 4,022 $ 4,220 $ 3,983
(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) Not annualized. (d) Had the Investment Adviser and/or Transfer Agent not waived and/or reimbursed a portion of expenses, total return would have been reduced. (e) The benefits derived from custody fees paid indirectly had no impact. (f) Annualized.
(UNAUDITED) SIX MONTHS ENDED COLUMBIA ACORN INTERNATIONAL CLASS Z JUNE 30, YEAR ENDED DECEMBER 31, ---------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000 NET ASSET VALUE, BEGINNING OF PERIOD $ 29.03 $ 22.66 $ 15.40 $ 18.47 $ 23.85 $ 35.33 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.26 0.25 0.21 0.14 0.12 0.01 Net realized and unrealized gain (loss) 0.60 6.37 7.13 (3.10) (5.11) (6.73) ---------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 0.86 6.62 7.34 (2.96) (4.99) (6.72) ---------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.43) (0.25) (0.08) (0.11) -- (0.66) From net realized gains -- -- -- -- (0.39) (4.10) ---------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.43) (0.25) (0.08) (0.11) (0.39) (4.76) ================================================================================================================================== REDEMPTION FEES Redemption fees added to paid in capital 0.00(a)(b) 0.00(a)(b) -- -- -- -- ================================================================================================================================== NET ASSET VALUE, END OF PERIOD $ 29.46 $ 29.03 $ 22.66 $ 15.40 $ 18.47 $ 23.85 ================================================================================================================================== Total Return (c) 2.97%(d)(e) 29.47%(e) 47.80% (16.10)% (21.11)% (20.02)% ================================================================================================================================== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.01%(g) 1.08% 1.05% 1.06% 1.06% 1.05% Net investment income (f) 1.79%(g) 1.01% 1.19% 0.80% 0.62% 0.02% Reimbursement 0.02%(g) 0.02% -- -- -- -- Portfolio turnover rate 15%(d) 40% 40% 52% 45% 63% Net assets at end of period (IN MILLIONS) $ 2,084 $ 1,919 $ 1,563 $ 1,241 $ 1,613 $ 2,459
(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) Not annualized. (e) Had the Investment Adviser and/or Transfer Agent not waived and/or 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.
(UNAUDITED) SIX MONTHS ENDED COLUMBIA ACORN USA CLASS Z JUNE 30, YEAR ENDED DECEMBER 31, -------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000 NET ASSET VALUE, BEGINNING OF PERIOD $ 25.20 $ 21.01 $ 14.28 $ 17.52 $ 14.90 $ 16.75 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) 0.07 (0.15) (0.13) (0.10) (0.08) (0.05) Net realized and unrealized gain (loss) 1.30 4.48 6.86 (3.14) 2.94 (1.48) -------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 1.37 4.33 6.73 (3.24) 2.86 (1.53) -------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- -- (0.00)(b) From net realized gains (0.36) (0.14) -- -- (0.24) (0.32) -------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.36) (0.14) -- -- (0.24) (0.32) ================================================================================================================================ NET ASSET VALUE, END OF PERIOD $ 26.21 $ 25.20 $ 21.01 $ 14.28 $ 17.52 $ 14.90 ================================================================================================================================ Total Return (c) 5.48%(d)(e) 20.62%(e) 47.13% (18.49)% 19.25% (8.99)% ================================================================================================================================ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.03%(g) 1.09% 1.11% 1.17% 1.17% 1.15% Net investment income (loss) (f) 0.55%(g) (0.66)% (0.72)% (0.64)% (0.46)% (0.32)% Reimbursement 0.01%(g) 0.02% -- -- -- -- Portfolio turnover rate 7%(d) 18% 7% 31% 24% 45% Net assets at end of period (IN MILLIONS) $ 755 $ 646 $ 502 $ 235 $ 229 $ 222
(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) Not annualized. (e) Had the Investment Adviser and/or Transfer Agent not waived and/or 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. See accompanying notes to financial statements 1-800-922-6769 Spread 62-63 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS, CONTINUED
(UNAUDITED) SIX MONTHS ENDED COLUMBIA ACORN INTERNATIONAL SELECT CLASS Z JUNE 30, YEAR ENDED DECEMBER 31, --------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000 NET ASSET VALUE, BEGINNING OF PERIOD $18.02 $14.58 $10.29 $ 12.09 $ 17.15 $ 19.93 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (a) 0.13 0.04 0.06 0.03 (0.05) (0.11) Net realized and unrealized gain (loss) (0.03) 3.47 4.24 (1.83) (4.92) (2.53) --------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 0.10 3.51 4.30 (1.80) (4.97) (2.64) --------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.28) (0.07) (0.01) -- (0.01) (0.04) From net realized gains -- -- -- -- (0.08) (0.10) --------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.28) (0.07) (0.01) -- (0.09) (0.14) ================================================================================================================================= REDEMPTION FEES Redemption fees added to paid in capital 0.00(a)(b) 0.00(a)(b) -- -- -- -- ================================================================================================================================= NET ASSET VALUE, END OF PERIOD $17.84 $18.02 $14.58 $ 10.29 $ 12.09 $ 17.15 ================================================================================================================================= Total Return (c) 0.58%(d)(e) 24.14%(e) 41.79%(e) (14.89)%(e) (29.05)%(e) (13.35)% ================================================================================================================================= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.45%(g) 1.45% 1.45% 1.45% 1.45% 1.33% Net investment income (loss) (f) 1.42%(g) 0.27% 0.56% 0.26% (0.32)% (0.42)% Reimbursement 0.03%(g) 0.29% 0.42% 0.33% 0.01% -- Portfolio turnover rate 13%(d) 73% 69% 102% 82% 79% Net assets at end of period (IN MILLIONS) $ 57 $ 46 $ 34 $ 26 $ 37 $ 130
(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) Not annualized. (e) Had the Investment Adviser and/or Transfer Agent not waived and/or 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.
(UNAUDITED) SIX MONTHS ENDED COLUMBIA ACORN SELECT CLASS Z JUNE 30, YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 2001 2000 NET ASSET VALUE, BEGINNING OF PERIOD $21.13 $18.20 $14.04 $15.23 $14.13 $13.70 INCOME FROM INVESTMENT OPERATIONS Net investment loss (a) (0.02) (0.10) (0.10) (0.10) (0.05) (0.07) ------------------------------------------------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) (0.01)(b) 3.47 4.39 (1.09) 1.18 1.59 Total from Investment Operations (0.03) 3.37 4.29 (1.19) 1.13 1.52 ------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- -- (0.01) From net realized gains (0.13) (0.44) (0.13) -- (0.03) (1.08) ------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.13) (0.44) (0.13) -- (0.03) (1.09) =============================================================================================================================== NET ASSET VALUE, END OF PERIOD $20.97 $21.13 $18.20 $14.04 $15.23 $14.13 =============================================================================================================================== Total Return (c) (0.14)%(d)(e) 18.58%(e) 30.61% (7.81)%(e) 8.00%(e) 11.68% =============================================================================================================================== RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 1.00%(f)(g) 1.13%(f) 1.12%(f) 1.26%(f) 1.35% 1.34%(h) Net investment loss (0.20)%(f)(g) (0.52)%(f) (0.63)%(f) (0.67)%(f) (0.44)% (0.52)%(h) Reimbursement 0.04%(g) 0.02% -- 0.01% 0.03% -- Portfolio turnover rate 14%(d) 34% 16% 40% 82% 116% Net assets at end of period (IN MILLIONS) $ 549 $ 445 $ 294 $ 93 $ 70 $ 67
(a) Per share data was calculated using average shares outstanding during the period. (b) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments in the Fund. (c) Total return at net asset value assuming all distributions reinvested. (d) Not annualized. (e) Had the Investment Adviser and/or Transfer Agent not waived and/or 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) In accordance with a requirement of the U.S. Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances the Fund 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. See accompanying notes to financial statements 1-800-922-6769 64-65 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 each a 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. Effective January 3, 2005, Columbia Acorn International and Columbia Acorn International Select impose a 2% redemption fee on Class A, Class B and Class C shares that are owned 60 days or less. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. 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 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 semiannual report. The semiannual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begin 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 market 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 Trust has retained an independent statistical fair value pricing service to assist in the fair valuation process for securities principally traded in a foreign market in order to adjust for possible changes in value that may occur between the close of the foreign exchange and the time at which Fund shares are priced. If a security is valued at a "fair value", that value may be different from the last quoted market price for the security. 1-800-922-6769 66 >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 adviser 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. If the Funds no longer own the applicable securities, any distributions received in excess of income are recorded as realized gains. >Restricted Securities Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale at the issuer's expense either upon demand by the Funds or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees. The Funds will not incur any registration costs upon such resale. >Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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" on 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, 2005. >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 (the "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 67 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED and Class A, Class B, Class C and Class Z 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 accounted for as an addition to paid in capital and are allocated to each class proportionately for purposes of determining the net asset value of each class. >Custody fees/credits Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. The amount is disclosed as a reduction of total expenses on the Statements of Operations. >Federal income taxes The Funds have complied with the 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 Funds 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 15%. 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, 2004 was as follows: LONG- TERM ORDINARY CAPITAL INCOME* GAINS -------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 30,840 $ 441,598 Columbia Acorn International 16,930 -- Columbia Acorn USA -- 4,748 Columbia Acorn International Select 157 -- Columbia Acorn Select -- 25,216 * For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. The following capital loss carryforwards, determined as of December 31, 2004, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: YEAR OF COLUMBIA ACORN COLUMBIA ACORN EXPIRATION INTERNATIONAL USA -------------------------------------------------------------------------- (IN THOUSANDS) 2009 $ -- $ 2,529* 2010 14,102 506 2011 48,477 -- -------------------------------------------------------------------------- TOTAL $62,579 $ 3,035 YEAR OF COLUMBIA ACORN EXPIRATION INTERNATIONAL SELECT -------------------------------------------------------------------------- (IN THOUSANDS) 2009 $ 16,135 2010 12,528 2011 2,488 -------------------------------------------------------------------------- TOTAL $ 31,151 * Of these carryforwards, $2,529 (expiring in 2009) remains from the Columbia Acorn USA's merger with Stein Roe Small Company Growth Fund on 7/26/2002. Utilization of Stein Roe Small Company Growth Fund's losses could be subject to limitations imposed by the Internal Revenue Code. 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. Effective March 8, 2005, 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 0.74% Next $1.3 billion 0.69% Next $4 billion 0.64% Net assets in excess of $6 billion 0.63% COLUMBIA ACORN INTERNATIONAL -------------------------------------------------------------------------- Net asset value: On the first $100 million 1.19% Next $400 million 0.94% Net assets in excess of $500 million 0.74% COLUMBIA ACORN USA -------------------------------------------------------------------------- Net asset value: On the first $200 million 0.94% Net assets in excess of $200 million 0.89% 1-800-922-6769 68 COLUMBIA ACORN INTERNATIONAL SELECT -------------------------------------------------------------------------- On average daily net assets: 0.94% COLUMBIA ACORN SELECT -------------------------------------------------------------------------- Net asset value: On the first $700 million 0.85% Net assets in excess of $700 million 0.80% Prior to March 8, 2005, under the Funds' investment management agreement, fees were 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 -------------------------------------------------------------------------- Net asset value: On the first $700 million 0.90% Net assets in excess of $700 million 0.85% In accordance with the terms of the NYAG Settlement (as defined and discussed further under Note 8 to these Financial Statements - "Legal Proceedings"), Columbia WAM waived a portion of the fees payable under the Funds' investment management agreement so that those fees are retained at the following rates as a percent of average daily net assets: COLUMBIA ACORN FUND - 0.740% - up to $700 million; 0.690% - $700 million to $2 billion; 0.640% - $2 billion to $6 billion; 0.630% - $6 billion and over; COLUMBIA ACORN INTERNATIONAL - 1.190% - up to $100 million; 0.940% - $100 million to $500 million; 0.740% - $500 million and over; COLUMBIA ACORN USA - 0.940% - up to $200 million; 0.890% - $200 million and over; COLUMBIA ACORN INTERNATIONAL SELECT - 0.940% on average daily net assets; COLUMBIA ACORN SELECT - 0.850% - up to $700 million; 0.800% - $700 million and over. The fee waiver was effective as of March 8, 2005 but applied as if it had gone into effect on December 1, 2004. For the six months ended June 30, 2005, the Funds' effective investment advisory fee rates were as follows: -------------------------------------------------------------------------- Columbia Acorn Fund 0.65% Columbia Acorn International 0.80% Columbia Acorn USA 0.90% Columbia Acorn International Select 0.94% Columbia Acorn Select 0.84% ========================================================================== >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 provides administrative services and receives an administration fee from the Funds at the following rates: COLUMBIA ACORN TRUST -------------------------------------------------------------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net asset in excess of $16 billion 0.03% For the six months ended June 30, 2005 each Fund's effective administration fee rate was 0.043%. 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. 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. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $21.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. The Transfer Agent has made the decision to waive the reimbursement for certain out-of-pocket expenses. 69 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED 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, 2005 were as follows: -------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 323 Columbia Acorn International 53 Columbia Acorn USA 21 Columbia Acorn International Select 20 Columbia Acorn Select 65 ========================================================================== The Board of Trustees appointed a Chief Compliance Officer to the Trust in accordance with federal securities regulations. The Funds, along with other affiliated funds, will pay their pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. These expenses are disclosed separately as "Compliance fees" on the Statements of Operations. 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, 2005, Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select 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 32, 47 and 54, respectively. During the six months ended June 30, 2005, the Funds engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), 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: PURCHASES SALES -------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 3,046 $ 1,713 Columbia Acorn International 4,757 623 Columbia Acorn USA -- 311 Columbia Acorn International Select 5,483 92 Columbia Acorn Select -- 912 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. Interest is charged to each participating fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.10% per annum is accrued and apportioned among the participating funds based on their pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. No amounts were borrowed under this facility for the six months ended June 30, 2005. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2005 were: COLUMBIA ACORN FUND -------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 1,459,490 Proceeds from sales 1,076,808 ========================================================================== COLUMBIA ACORN INTERNATIONAL -------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 506,385 Proceeds from sales 305,798 ========================================================================== COLUMBIA ACORN USA -------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 121,693 Proceeds from sales 57,382 ========================================================================== COLUMBIA ACORN INTERNATIONAL SELECT -------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 24,315 Proceeds from sales 7,891 ========================================================================== COLUMBIA ACORN SELECT -------------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 465,643 Proceeds from sales 170,312 ========================================================================== 7. Redemption Fees For the six months ended June 30, 2005, the redemption fees for Columbia Acorn International and Columbia Acorn International Select amounted to $32,722 and $6,294, respectively. 1-800-922-6769 70 8. Legal Proceedings On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"), the advisor to the Columbia Funds, and CFDI (collectively with Columbia Management, "Columbia"), the distributor of the shares of the Columbia Funds, the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds (collectively, "the Columbia Family of Funds"), entered into agreements in principle with the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General ("NYAG") to resolve the proceedings brought in connection with the SEC's and NYAG's investigations of frequent trading and market timing in certain Columbia mutual funds. Columbia WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds, was not a respondent in either proceeding nor were any of its officers or directors. On February 9, 2005, Columbia entered into an Assurance of Discontinuance (the "NYAG Settlement") with the NYAG and consented to the entry of a cease-and-desist order by the SEC (the "SEC Order" and together, the "Settlements"). The Settlements contain substantially the same terms and conditions as outlined in the agreements in principle. Although none of the Columbia Acorn Family of Funds is a party to the Settlement orders, under the terms of the Settlements and in order for Columbia Management to continue to provide administrative services to the Columbia Acorn Family of Funds, the Board of Trustees of the Trust expects to comply voluntarily with certain requirements, including: the election of an independent board chairman, which the Board had done well in advance of the regulatory proceedings; and the appointment of one or more individuals to monitor legal compliance and to add another level of assurance that the management fees to be charged to the Funds are negotiated at arm's length and are reasonable. Under the terms of the SEC Order, Columbia has agreed, among other things, to: pay $70 million in disgorgement and $70 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to review Columbia's applicable supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (see below). The NYAG Settlement also, among other things, requires Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce management fees paid by the Columbia Family of Funds, Nations Funds and other related mutual funds collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions based on net assets as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the settlement amounts will be distributed in accordance with a distribution plan to be developed by an independent distribution consultant, who is acceptable to the SEC staff and the independent trustees of the funds. The distribution plan must be based on a methodology developed in consultation with Columbia and the independent trustees of the funds and not unacceptable to the staff of the SEC. More specific information on the distribution plan will be communicated by Columbia WAM and/or its affiliates at a later date. The Trust, Columbia WAM and the Trustees of the Trust are named as defendants in class and derivative complaints which have been consolidated in a Multi-District Action in the federal district court for the District of Massachusetts. These lawsuits contend that defendants permitted certain investors to market time their trades in certain Columbia Acorn Funds. The Multi-District Action is ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are also defendants in a consolidated lawsuit filed in the federal district court of Massachusetts 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 and the Trustees of the Trust breached certain common law duties and federal 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 plaintiffs' complaint 71 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED was dismissed by the district court. However, plaintiffs are in the process of appealing that decision. On January 11, 2005 a putative class action lawsuit was filed in federal district court in Massachusetts against, among others, the Trustees of the Trust and Columbia WAM. The lawsuit alleges that defendants violated common law duties to fund shareholders as well as sections of the Investment Company Act of 1940, by failing to ensure that the Trust funds and other affiliated funds participated in securities class action settlements for which the funds were eligible. Specifically, plaintiffs allege that defendants failed to submit Proof of Claims in connection with settlements of securities class action lawsuits filed against companies in which the funds held positions. The complaint seeks compensatory and punitive damages, and the disgorgement of all fees paid to Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM have been dismissed as defendants in this lawsuit. On March 21, 2005, a class action complaint was filed against the Columbia Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due to the alleged market timing of the Columbia Acorn Funds. In addition to the rescission of sales charges, plaintiffs seek recovery of actual damages, attorneys' fees and cost. The case has been removed to the federal district court of Massachusetts. The Trust and Columbia WAM intend to defend these suits vigorously. 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 BOA (and affiliated entities). These suits are ongoing. However, based on currently available information, the Columbia Acorn Trust believes that the likelihood that these lawsuits will have a material adverse impact on any fund is remote, and Columbia WAM believes that the lawsuits are not likely to materially affect its ability to provide investment management services to the Funds. For the six months ended June 30, 2005, Columbia Management has assumed consulting services and legal fees incurred by the Funds in connection with these matters and the amounts are as follows: -------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 85 Columbia Acorn International 13 Columbia Acorn USA 6 Columbia Acorn International Select --* Columbia Acorn Select 8 ========================================================================== * Rounds to less than $500. 9. Subsequent Event Effective August 22, 2005, the Funds' distributor will be Columbia Management Distributors, Inc. and the Funds' transfer agent will be Columbia Management Services, Inc. 1-800-922-6769 72 COLUMBIA THERMOSTAT FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) --------------------------------------------------------------- >BOND MUTUAL FUNDS: 59.9% 6,794,681 Columbia Intermediate Bond Fund, Class Z $ 61,764 3,435,575 Columbia Federal Securities Fund, Class Z 37,035 2,864,156 Columbia High Yield Fund, Class Z 24,746 --------------------------------------------------------------- TOTAL BOND MUTUAL FUNDS (COST: $122,607) 123,545 >STOCK MUTUAL FUNDS: 39.9% 1,118,975 Columbia Growth & Income Fund, Class Z 20,444 2,319,364 Columbia Growth Stock Fund, Class Z (b) 20,039 627,082 Columbia Acorn Fund, Class Z 16,800 602,341 Columbia Acorn Select, Class Z 12,631 452,128 Columbia Mid Cap Value Fund, Class Z 12,551 --------------------------------------------------------------- TOTAL STOCK MUTUAL FUNDS (COST: $67,473) 82,465 >SHORT-TERM OBLIGATIONS: 0.4% $ 751 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $769 (repurchase proceeds: $751) 751 --------------------------------------------------------------- (COST: $751) 751 ---------- TOTAL INVESTMENTS: 100.2% 206,761 (COST: $190,831)(a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.2)% (421) ---------- TOTAL NET ASSETS: 100% $ 206,340 =============================================================== >Notes to Statement of Investments (in thousands) (a) At June 30, 2005, for federal income tax purposes cost of investments was $190,831 and net unrealized appreciation was $15,930 consisting of gross unrealized appreciation of $16,094 and gross unrealized depreciation of $164. (b) Non-income producing security. 73 COLUMBIA THERMOSTAT FUND >STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2005 -------------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS: Unaffiliated investments, at value (cost: $751) $ 751 Affiliated investments, at value (cost: $190,080) 206,010 Cash 490 Receivable for fund shares sold 153 Expense reimbursement due from Investment Adviser 28 -------------------------------------------------------------------------------------- Total Assets 207,432 LIABILITIES: Payable for: Investments purchased 490 Fund shares redeemed 361 Management fee 16 Administration fee 7 Deferred trustees fee 5 Transfer agent fees 16 Trustees' fees 2 Custody fees 3 Reports to shareholders 73 12b-1 Service & Distribution fees 102 Other liabilities 17 -------------------------------------------------------------------------------------- Total Liabilities 1,092 -------------------------------------------------------------------------------------- NET ASSETS $ 206,340 ====================================================================================== COMPOSITION OF NET ASSETS: Paid in capital $ 187,052 Undistributed net investment income 2,080 Accumulated net realized gain 1,278 Net unrealized appreciation on investments 15,930 -------------------------------------------------------------------------------------- NET ASSETS $ 206,340 ====================================================================================== Net asset value per share -- Class A (a) $ 13.04 (Net assets/shares) ($71,945/5,518) Maximum offering price per share -- Class A (b) $ 13.84 (Net asset value per share/front-end sales charge) ($13.04/0.9425) Net asset value and offering price per share -- Class B (a) $ 13.02 (Net assets/shares) ($79,557/6,110) Net asset value and offering price per share -- Class C (a) $ 13.01 (Net assets/shares) ($30,449/2,341) Net asset value, offering and redemption price per share -- Class Z $ 13.06 (Net assets/shares) ($24,389/1,867)
(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 74 COLUMBIA THERMOSTAT FUND >STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005
(IN THOUSANDS) -------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends from affiliated investment company shares $ 2,882 Interest income 11 -------------------------------------------------------------------------------------- Total Investment Income 2,893 EXPENSES: Management fee 102 Administration fee 44 12b-1 Service and Distribution fees: Class A 92 Class B 330 Class C 151 Transfer agent fees: Class A 45 Class B 65 Class C 23 Class Z 10 Trustees' fees 10 Custody fees 6 Reports to shareholders 67 Compliance fees 4 Non-recurring costs (See Note 7) 1 Other expenses 47 -------------------------------------------------------------------------------------- Total expenses 997 Less custody fees paid indirectly --* Less reimbursement of expenses by Investment Adviser (149) Less reimbursement of expenses by Transfer Agent (19) Non-recurring costs reimbursed (See Note 7) (1) -------------------------------------------------------------------------------------- Net Expenses 828 -------------------------------------------------------------------------------------- Net Investment Income 2,065 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on: Affiliated investments 1,532 Distributions from affiliated investment company shares 280 -------------------------------------------------------------------------------------- Net realized gain 1,812 Net change in unrealized appreciation (depreciation) on investments (1,503) -------------------------------------------------------------------------------------- Net realized and unrealized gain 309 -------------------------------------------------------------------------------------- Net Increase in Net Assets from Operations $ 2,374 ======================================================================================
* 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) 2005 2004 OPERATIONS: Net investment income $ 2,065 $ 3,334 Net realized gain on investments and distributions from affiliated investment company shares 1,812 3,692 Net change in net unrealized appreciation (depreciation) on investments (1,503) 8,154 ------------------------------------------------------------------------------------------------ Net Increase from Operations 2,374 15,180 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- (1,488) Net realized gain -- Class A (1,365) (141) Net investment income -- Class B -- (997) Net realized gain -- Class B (1,495) (146) Net investment income -- Class C -- (383) Net realized gain -- Class C (573) (61) Net investment income -- Class Z -- (450) Net realized gain -- Class Z (449) (36) ------------------------------------------------------------------------------------------------ Total Distributions to Shareholders (3,882) (3,702) SHARE TRANSACTIONS: Subscriptions -- Class A 7,179 42,302 Distributions reinvested -- Class A 1,229 1,425 Redemptions -- Class A (13,096) (13,080) ------------------------------------------------------------------------------------------------ Net Increase (Decrease) -- Class A (4,688) 30,647 Subscriptions -- Class B 6,412 27,802 Distributions reinvested -- Class B 1,356 1,024 Redemptions -- Class B (5,578) (6,671) ------------------------------------------------------------------------------------------------ Net Increase -- Class B 2,190 22,155 Subscriptions -- Class C 3,670 12,939 Distributions reinvested -- Class C 523 378 Redemptions -- Class C (4,611) (4,000) ------------------------------------------------------------------------------------------------ Net Increase (Decrease) -- Class C (418) 9,317 Subscriptions -- Class Z 4,257 8,408 Distributions reinvested -- Class Z 427 470 Redemptions -- Class Z (1,184) (3,140) ------------------------------------------------------------------------------------------------ Net Increase -- Class Z 3,500 5,738 ------------------------------------------------------------------------------------------------ Net Increase from Share Transactions 584 67,857 ------------------------------------------------------------------------------------------------ Total Increase (Decrease) in Net Assets (924) 79,335 ------------------------------------------------------------------------------------------------ NET ASSETS: Beginning of period 207,264 127,929 ------------------------------------------------------------------------------------------------ End of period $ 206,340 $ 207,264 ------------------------------------------------------------------------------------------------ UNDISTRIBUTED NET INVESTMENT INCOME $ 2,080 $ 15 ================================================================================================
See accompanying notes to financial statements. 1-800-922-6769 76 COLUMBIA THERMOSTAT FUND >STATEMENT OF CHANGES IN NET ASSETS, CONTINUED
(UNAUDITED) SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------ (IN THOUSANDS) 2005 2004 Subscriptions -- Class A 551 3,381 Shares issued in reinvestment and capital gains -- Class A 94 110 Less shares redeemed -- Class A (1,006) (1,049) ------------------------------------------------------------------------------------------------ Net Increase (Decrease) -- Class A (361) 2,442 Subscriptions -- Class B 493 2,213 Shares issued in reinvestment and capital gains -- Class B 104 79 Less shares redeemed -- Class B (428) (530) ------------------------------------------------------------------------------------------------ Net Increase -- Class B 169 1,762 Subscriptions -- Class C 282 1,028 Shares issued in reinvestment and capital gains -- Class C 41 29 Less shares redeemed -- Class C (354) (316) ------------------------------------------------------------------------------------------------ Net Increase (Decrease) -- Class C (31) 741 Subscriptions -- Class Z 327 669 Shares issued in reinvestment and capital gains -- Class Z 33 36 Less shares redeemed -- Class Z (91) (250) ------------------------------------------------------------------------------------------------ Net Increase -- Class Z 269 455 ------------------------------------------------------------------------------------------------ Net Increase in Shares of Beneficial Interest 46 5,400 ------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. 77 COLUMBIA THERMOSTAT FUND >FINANCIAL HIGHLIGHTS
INCEPTION (UNAUDITED) SEPTEMBER 25, SIX MONTHS 2002 THROUGH CLASS Z ENDED JUNE 30, YEAR ENDED DECEMBER 31, DECEMBER 31, --------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 2002 NET ASSET VALUE, BEGINNING OF PERIOD 13.12 $ 12.31 $ 10.41 $ 10.00 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.17 0.31 0.19 0.04 Net realized and unrealized gain 0.02 0.82 1.87 0.37 --------------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 0.19 1.13 2.06 0.41 --------------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.29) (0.16) -- From net realized gains (0.25) (0.03) (0.00)(b) -- --------------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.25) (0.32) (0.16) -- --------------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.06 $ 13.12 $ 12.31 $ 10.41 --------------------------------------------------------------------------------------------------------------------------------- Total Return (c)(d) 1.44%(e) 9.17% 19.79% 4.10%(e) ================================================================================================================================= RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 0.25%(g)(h) 0.25%(g) 0.38%(g) 0.62%(h)(i) Net investment income 2.59%(g)(h) 2.48%(g) 1.64%(g) 1.41%(h)(i) Reimbursement 0.11%(h) 0.21% 0.88% 19.94%(h) Portfolio turnover rate 35%(e) 67% 61% 11%(e) Net assets at end of period (IN MILLIONS) $ 24 $ 21 $ 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 Investment Adviser and/or Transfer Agent 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 U.S. Securities and Exchange Commission, the ratios reflect total expenses prior to the reduction of custody fees for cash balances the Fund 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. 1-800-922-6769 78 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), is a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. 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. 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 semiannual report. The semiannual 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, 2005, 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. 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 Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. Repurchase agreements, 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 adviser 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 accounting principles generally accepted in the United States of America 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. 79 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED >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 (the "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 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/credits Custody fees are reduced based on the Fund's cash balance maintained with the custodian. The Fund could have invested a portion of assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. The amount is disclosed as a reduction of total expenses on the Statement of Operations. >Federal income taxes The Fund has complied with the 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, 2004 was as follows: DECEMBER 31, 2004 -------------------------------------------------------------------------------- (IN THOUSANDS) Distributions paid from: Ordinary Income* $ 3,645 Long-Term Capital Gains 57 * For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. 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. 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 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 has the right to recoup expense reimbursement payments made to the Fund through December 31, 2005. This will be accomplished by the payment of an expense reimbursement fee by the Fund to Columbia WAM computed and paid monthly, with a limitation that immediately after such payment the Fund's ordinary operating expenses (excluding interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) will not exceed 0.25% annually. Columbia WAM provides administrative services and receives an administration fee from the Fund 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 asset value in excess of $16 billion 0.03% For the six months ended June 30, 2005, the Fund's effective administration fee rate was 0.043%. 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 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. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $21.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. 1-800-922-6769 80 The Transfer Agent has made the decision to waive the reimbursement for certain 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 Fund for the six months ended June 30, 2005 were $9,720. The Board of Trustees appointed a Chief Compliance Officer to the Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, will pay its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. This expense is disclosed separately as "Compliance fees" on the Statement of Operations. 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. Interest is charged to each participating fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.10% per annum is accrued and apportioned among the participating funds based on their pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. No amounts were borrowed under this facility for the six months ended June 30, 2005. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2005 were: -------------------------------------------------------------------------------- (IN THOUSANDS) Purchases $ 71,861 Proceeds from sales 71,924 ================================================================================ 7. Legal Proceedings On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"), the advisor to the Columbia Funds, and CFDI (collectively with Columbia Management, "Columbia"), the distributor of the shares of the Columbia Funds, the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds (collectively, "the Columbia Family of Funds"), entered into agreements in principle with the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General ("NYAG") to resolve the proceedings brought in connection with the SEC's and NYAG's investigations of frequent trading and market timing in certain Columbia mutual funds. Columbia WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds, was not a respondent in either proceeding nor were any of its officers or directors. On February 9, 2005, Columbia entered into an Assurance of Discontinuance (the "NYAG Settlement") with the NYAG and consented to the entry of a cease-and-desist order by the SEC (the "SEC Order" and together, the "Settlements"). The Settlements contain substantially the same terms and conditions as outlined in the agreements in principle. Although none of the Columbia Acorn Family of Funds is a party to the Settlement orders, under the terms of the Settlements and in order for Columbia Management to continue to provide administrative services to the Columbia Acorn Family of Funds, the Board of Trustees of the Trust expects to comply voluntarily with certain requirements, including: the election of an independent board chairman, which the Board had done well in advance of the regulatory proceedings; and the appointment of one or more individuals to monitor legal compliance and to add another level of assurance that the management fees to be charged to the Funds are negotiated at arm's length and are reasonable. Under the terms of the SEC Order, Columbia has agreed, among other things, to: pay $70 million in disgorgement and $70 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to review Columbia's applicable supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (see below). The NYAG Settlement also, among other things, requires Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce management fees paid by the Columbia Family of Funds, Nations Funds and other related mutual funds collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions based on net assets as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the settlement amounts will be distributed in accordance with a distribution plan to be developed by an independent distribution consultant, who is acceptable to the SEC staff and the independent trustees of the funds. The distribution plan must be based on a methodology developed in consultation with Columbia and the independent trustees of the funds and 81 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED not unacceptable to the staff of the SEC. More specific information on the distribution plan will be communicated by Columbia WAM and/or its affiliates at a later date. The Trust, Columbia WAM and the Trustees of the Trust are named as defendants in class and derivative complaints which have been consolidated in a Multi-District Action in the federal district court for the District of Massachusetts. These lawsuits contend that defendants permitted certain investors to market time their trades in certain Columbia Acorn Funds. The Multi-District Action is ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are also defendants in a consolidated lawsuit filed in the federal district court of Massachusetts 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 and the Trustees of the Trust breached certain common law duties and federal 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 plaintiffs' complaint was dismissed by the district court. However, plaintiffs are in the process of appealing that decision. On January 11, 2005 a putative class action lawsuit was filed in federal district court in Massachusetts against, among others, the Trustees of the Trust and Columbia WAM. The lawsuit alleges that defendants violated common law duties to fund shareholders as well as sections of the Investment Company Act of 1940, by failing to ensure that the Trust funds and other affiliated funds participated in securities class action settlements for which the funds were eligible. Specifically, plaintiffs allege that defendants failed to submit Proof of Claims in connection with settlements of securities class action lawsuits filed against companies in which the funds held positions. The complaint seeks compensatory and punitive damages, and the disgorgement of all fees paid to Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM have been dismissed as defendants in this lawsuit. On March 21, 2005, a class action complaint was filed against the Columbia Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due to the alleged market timing of the Columbia Acorn Funds. In addition to the rescission of sales charges, plaintiffs seek recovery of actual damages, attorneys' fees and cost. The case has been removed to the federal district court of Massachusetts. The Trust and Columbia WAM intend to defend these suits vigorously. 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 BOA (and affiliated entities). These suits are ongoing. However, based on currently available information, the Columbia Acorn Trust believes that the likelihood that these lawsuits will have a material adverse impact on any fund is remote, and Columbia WAM believes that the lawsuits are not likely to materially affect its ability to provide investment management services to the Funds. For the six months ended June 30, 2005, Columbia Management has assumed $1,256 of consulting services and legal fees incurred by the Fund in connection with these matters. 8. Subsequent Event Effective August 22, 2005, the Fund's distributor will be Columbia Management Distributors, Inc. and the Fund's transfer agent will be Columbia Management Services, Inc. 1-800-922-6769 82 COLUMBIA ACORN FAMILY OF FUNDS CLASS Z SHARE INFORMATION MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN INTERNATIONAL SELECT AND COLUMBIA THERMOSTAT FUND $ 1,000 $ 1,000 FOR AN IRA MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN FUND, COLUMBIA ACORN USA AND COLUMBIA ACORN SELECT* $ 50,000 MINIMUM SUBSEQUENT INVESTMENT $ 50 EXCHANGE FEE NONE COLUMBIA ACORN FUND ACRNX Management Fee 0.65% 12b-1 Fee None Other Expenses 0.11% -------- Expense Ratio 0.76% COLUMBIA ACORN INTERNATIONAL ACINX Management Fee 0.80% 12b-1 Fee None Other Expenses 0.21% -------- Expense Ratio 1.01% COLUMBIA ACORN USA AUSAX Management Fee 0.90% 12b-1 Fee None Other Expenses 0.13% -------- Expense Ratio 1.03% COLUMBIA ACORN INTERNATIONAL SELECT ACFFX Management Fee 0.94% 12b-1 Fee None Other Expenses 0.51% -------- Net Expense Ratio 1.45% COLUMBIA ACORN SELECT ACTWX Management Fee 0.84% 12b-1 Fee None Other Expenses 0.16% -------- Expense Ratio 1.00% 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, 2005 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, 2006. The Fund's adviser and/or affiliates have contractually agreed to waive a portion of "other expenses" through April 30, 2006. * Effective August 5, 2005, the minimum initial investment in Columbia Acorn Select was raised to $50,000 from $1,000. ** Does not include estimated fees and expenses of 0.85% incurred by the Fund from the underlying portfolio funds. 83 This page intentionally left blank. 84 [Excerpts from:] COLUMBIA ACORN TRUST Management Fee Evaluation of the Senior Officer Prepared Pursuant to the New York Attorney General's Assurance of Discontinuance July 2005 85 INTRODUCTION The New York Attorney General's Assurance of Discontinuance ("Order") entered into by Columbia Management Advisors, Inc. ("CMAI") and Columbia Funds Distributor, Inc., ("CFDI" and collectively with "CMAI", "CMG") in February 2005, allows CMAI to manage or advise a mutual fund, including the Acorn Trust's family of funds (the "Acorn Funds" or "Acorn" or "Trust"), only if the trustees of the Acorn Funds appoint a "Senior Officer" to perform specified duties and responsibilities. One of these responsibilities includes "managing the process by which proposed management fees (including but not limited to, advisory fees) to be charged the Acorn Funds are negotiated so that they are negotiated in a manner which is at arms' length and reasonable and consistent with this Assurance of Discontinuance." The Order also provides that the Board of Trustees of the Acorn Funds ("Board") must determine the reasonableness of proposed "management fees" by using either an annual competitive bidding process supervised by the Senior Officer or Independent Fee Consultant, or by obtaining "an annual independent written evaluation prepared by or under the direction of the Senior Officer or the Independent Fee Consultant." "Management fees" are only part of the costs and expenses paid by mutual fund shareholders. The expenses can vary depending upon the class of shares held but usually include: (1) investment management or advisory fees to compensate analysts and portfolio managers for stock research and portfolio management, as well as the cost of operating a trading desk; (2) administrative expenses incurred to prepare registration statements and tax returns, calculate the Funds' net asset values, maintain effective compliance procedures and perform recordkeeping services; (3) transfer agency costs for establishing accounts, accepting and disbursing funds, as well as overseeing trading in Fund shares; (4) custodial expenses incurred to hold the securities purchased by the Funds; and (5) distribution expenses, including commissions paid to brokers that sell the Fund shares to investors. Columbia Wanger Asset Management, L.P. ("CWAM"), the adviser to the Acorn Funds, has proposed that the Trust enter into separate agreements governing the first two categories listed above: an advisory agreement governing portfolio management, and an administration agreement governing certain administration and clerical services. Together the fees paid under these two agreements are referred to as "management fees." Other fund expenses are governed by separate agreements, in particular agreements with two CWAM affiliates: CFDI, the broker-dealer that underwrites and distributes the Acorn Funds' shares, and Columbia Funds Services, Inc. ("CFSI"), the Funds' transfer agent. In conformity with the terms of the Order, this evaluation, therefore, addresses only the advisory and administrative contracts between CWAM and the Trust, and does not extend to the other agreements. According to the Order, the Senior Officer's evaluation must consider at least the following: (1) Management fees (including components thereof) charged to institutional and other clients of CWAM for like services; (2) Management fees (including any components thereof) charged by other mutual fund companies for like services; (3) Costs to CWAM and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; (4) Profit margins of CWAM and its affiliates from supplying such services; (5) Possible economies of scale as the Acorn Funds grow larger; and (6) The nature and quality of CWAM's services, including the performance of each Acorn Fund. 1-800-922-6769 86 On November 16, 2004, the Board appointed me Senior Officer under the Order. The Board also determined not to pursue a competitive bidding process and instead, charged me with the responsibility of evaluating the Acorn Funds' proposed advisory and administrative fee contracts with CWAM in conformity with the requirements of the Order. This Report is an annual evaluation required under the Order. In discharging their responsibilities, the independent Trustees have also consulted independent, outside counsel. * * * This evaluation was performed in cooperation and regular communication with the Investment Advisory Committee of the Board of Trustees. PROCESS AND INDEPENDENCE The objectives of the Order are to insure the independent evaluation of the advisory fees paid by the Acorn Funds as well as to insure that all relevant factors are considered. In my view, the contract renewal process has been conducted at arms-length and with independence in gathering, considering and evaluating relevant data. For example, the selection of fund peer groups is critical in assessing a fund's relative performance and cost. I have required Lipper and Morningstar Inc. to prepare their reports without input or commentary from CWAM; the engagement letters with them reflect this requirement. As a result, the peer groups reflected in the Morningstar Inc. and Lipper reports were determined independently. After submission of the reports, I asked CWAM to comment on them to avoid errors and to establish a clear record of CWAM's views on which funds, in its judgment, constitute an appropriate peer group. Similarly, I discussed CWAM's profitability analysis with its management but also sought the independent views of Ernst & Young on the reasonableness of CWAM's cost allocation methodology and on the adequacy of the financial data it provided. The evaluation of CWAM's profitability was performed in the context of the limited industry data available. My evaluation of the advisory contract was shaped by my experience as Acorn's Chief Compliance Officer ("CCO"). As CCO, I report solely to the Board and have no reporting obligation to or employment relationship with CMG or its affiliates, except for administrative purposes. This too contributes to the independence of this evaluation. I have made several comments on compliance matters in evaluating the quality of service provided by CWAM and CMG. Finally, this Report, its supporting materials and the data contained in other materials submitted to the Investment Advisory Committee of the Board, in my view, provide a thorough factual basis upon which the Board, in consultation with independent counsel as it deems appropriate, may conduct management fee negotiations that are in the best interests of the Acorn Funds' shareholders. 87 * * * VI. CONCLUSIONS My review of the data and other material above leads to the following conclusions with respect to the factors identified in the Order. 1. Performance. The Acorn Funds generally have achieved outstanding performance. The Acorn Fund, Acorn USA and Acorn Select all rank very favorably against their peers. The international funds have good recent performance records, but weaker long-term performance relative to the other, domestic Acorn Funds. Recent management changes have been followed by improved performance. The Acorn Funds typically achieve their performance with less risk than their competitors. 2. Management Fees relative to Peers. The management fee rankings of the Funds - particularly on the basis of a combined advisory and administrative fee basis - are generally above the respective medians and, hence, more favorable to shareholders than their peer group funds. Management fees do vary by Fund, with the Acorn Fund the least expensive and the Acorn USA Fund the most expensive. Acorn USA is the only fund that both Lipper and Morningstar ranked below the median. 3. Administrative Fees. The Acorn Funds' administrative fee, which is uniform across all Funds, is at a level comparable to that of its peers, provides for appropriate services to Funds, and affords breakpoints that lower the fee as assets increase. 4. Management Fees relative to Institutional and Other Mutual Fund Accounts. CWAM's focus is on its mutual funds. It does not actively seek to manage separate or institutional accounts. The few institutional accounts it does manage vary in rate structures. Some pay advisory fees commensurate with or higher than the Acorn Funds. In a few instances, however, institutional accounts pay lower advisory fees than do the Acorn Funds. One particular institutional account is significant in size and has been under CWAM's management for over 25 years. Finally, in two instances, the Acorn Funds pay slightly higher fees than do similar funds sold through insurance companies. 5. Costs to CWAM and its Affiliates. CWAM's costs do not appear excessive, and, in my view, it uses appropriate methodologies to allocate overhead costs. CWAM's affiliates do not appear to profit indirectly from CWAM's advisory agreement with the Acorn Funds. 6. Profit Margins. CWAM's firm-wide profit margins are at the upper end of the industry, though these comparisons are hampered by limited industry data. High profit margins are not unexpected for firms that manage large, successful funds and have provided outstanding investment performance for investors. CMAI, the Funds' administrator, currently experiences losses rather than profits in connection with its activities relating to the Acorn Funds. 7. Economies of Scale. Economies of scale do exist at CWAM and will expand as the assets of the Acorn Funds get larger. They are, however, only partially reflected in the management fee schedule for the Funds. If the Acorn Funds' assets continue to grow, under the Funds' current fee schedules, shareholders might not benefit in a manner generally commensurate with CWAM's increased profits. 1-800-922-6769 88 8. Nature and quality of services. This category includes a variety of considerations that are difficult to quantify, yet can have a significant bearing on the performance of the Acorn Funds. Several areas merit comment. a. Continuity of Management. It is critical that capable and experienced portfolio managers remain committed to the Funds and are able to hire and retain analysts to assist them. CWAM must have in place appropriate incentive plans that align its management's interests with those of investors. Further, CWAM must maintain the independence of its investment process, supported by effective information technology. b. Compliance. CWAM has a reasonably designed compliance program and a variety of related services that are valuable to shareholders, such as systems to ensure best execution of portfolio transactions and the daily review of security prices to ensure accuracy of the Acorn Funds' NAV. c. Administrative Services. The Acorn Funds benefit from a variety of administrative services that are performed by CWAM and CMAI, including preparation of registration statements, calculation of NAV's, accounting services, shareholder services, and other functions. In my opinion, these conclusions, taken together, support the reasonableness of the proposed advisory and administrative fees. In reaching my evaluation, I weighed heavily the factors of performance and management fees relative to those paid by competing funds. In this respect, the Acorn Funds provide excellent performance at costs that generally fall below industry medians. VII. RECOMMENDATIONS The Trustees should consider the following proposals to address the issues identified in this Report. Some of these recommendations require the collection and evaluation of more data. This work cannot be accomplished effectively before the expiration of the existing advisory contract on July 31, 2005. Therefore, I recommend that the Trustees consider extending the existing contract pending consideration of these recommendations. These recommendations do not purport to offer the only avenues to address the opinions and conclusions I have expressed in this Report. Economies of scale, for example, can be addressed in a variety of ways in a management contract. Sound business judgment will guide how any particular area is addressed with due consideration given to all the factors that must be weighed in reaching an advisory agreement that best serves the Acorn Fund shareholders. I believe the Trustees should consider the following: 1. Restructure the advisory fee beyond the current breakpoint schedule to reflect more fully economies of scale. The Trustees might consider several ways to accomplish this objective, including instituting a two-tier fee structure that incorporates a complex- or CWAM-wide fee (including assets held in separate accounts) and a fund specific fee, with each containing breakpoints to reflect their separate economies of scale. Another approach is to consider uniform breakpoints for all Acorn Funds, including breakpoints above current asset levels. 2. Condition contract renewal on submission of an employment agreement or management incentive plan designed to ensure the continued employment of senior management, under terms that align management's incentives with the interests of the Acorn Funds' shareholders. Any incentive plan should be designed to 89 permit CWAM to attract and retain the highest caliber investment professionals and to support them with effective and reliable information technology systems. 3. Review with CWAM its anticipated capacity limitations and the degree to which increased staffing and effective incentives may address those issues. Robert P. Scales July 20, 2005 * * * More complete copies of the Management Fee Evaluation of the Senior Officer of the Columbia Acorn Trust, edited to delete certain confidential or proprietary information, are available upon written request to: R. Scott Henderson Bank of America MA-515-11-05 One Financial Center Boston, MA 02111 EFFECTIVE AUGUST 22, 2005, THE FUNDS' DISTRIBUTOR WILL BE COLUMBIA MANAGEMENT DISTRIBUTORS, INC. AND THE FUNDS' TRANSFER AGENT WILL BE COLUMBIA MANAGEMENT SERVICES, INC. 1-800-922-6769 90 This page intentionally left blank. 91 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 Management Distributors, Inc. One Financial Center Boston, Massachusetts 02111-2621 TRANSFER AGENT, DIVIDEND DISBURSING AGENT Columbia Management 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. INFORMATION REGARDING HOW THE FUNDS VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE 12-MONTH PERIOD ENDED JUNE 30, 2004 IS AVAILABLE FROM THE SEC'S WEBSITE. THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY BE REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, D.C. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330. 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 92 PARKING INFORMATION FOR 2005 ANNUAL SHAREHOLDER INFORMATION MEETING A public lot is located at 172 West Madison, between Wells and LaSalle, on the north side of the street. The entrance is on Madison. Madison is a one-way west street. This lot is approximately two blocks west of the Bank One building. Valet parking is available at 183 West Monroe, between Wells and LaSalle, on the south side of the street. The entrance is on Monroe. Monroe is a one-way east street. No vans or trucks are allowed to park at this lot. This lot is approximately three blocks west of the Bank One building. 55 East Monroe (formerly Mid-Continental Plaza Parking) is located on East Monroe Street two and one half blocks east of the Bank One building. The entrance is on the south side (right) of Monroe Street, between Wabash and Michigan Avenues. Monroe is a one-way street east. Grant Park Underground (indoor) parking is located 3 1 1/42 blocks east of the Bank One building on Monroe Street. The entrance is on the north side of Monroe Street between Columbus Drive and Lake Shore. Monroe is two-way between Lake Shore Drive and Michigan Avenue. West of Michigan, Monroe is a one-way east. 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. [LOCATION MAP] SAVE THE DATE! SEPTEMBER 27, 2005 Meet your portfolio managers, analysts and fellow shareholders at Columbia Acorn Funds 2005 Annual Shareholder Information Meeting Bank One Auditorium, Plaza Level 38 South Dearborn Street Chicago, IL 60602 Bring your ideas and questions. We're anxious to hear what's onyour mind. [PHOTO OF ACORNS] --------------------- PRESORTED FIRST-CLASS MAIL U.S. POSTAGE PAID HOLLISTON, MA [EAGLE HEAD LOGO] COLUMBIA FUNDS PERMIT NO. 20 --------------------- A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2005 COLUMBIA MANAGEMENT DISTRIBUTORS, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 SHC-44/88229-0705 05/7049 COLUMBIA ACORN FUNDS SEMIANNUAL REPORT JUNE 30, 2005 [PHOTO OF WOMAN HOLDING A PHONE] COLUMBIA ACORN FUND COLUMBIA ACORN INTERNATIONAL COLUMBIA ACORN USA COLUMBIA ACORN INTERNATIONAL SELECT COLUMBIA ACORN SELECT COLUMBIA THERMOSTAT FUND LOOK INSIDE FOR DETAILS ON THE 2005 COLUMBIA ACORN FUNDS SHAREHOLDER INFORMATION MEETING. ---------------------------- NOT FDIC MAY LOSE VALUE INSURED ----------------- NO BANK GUARANTEE ---------------------------- PLEASE JOIN US AT THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING o September 27, 2005 9 a.m. - 10 a.m. Central time, immediately following the special meeting of shareholders o Bank One Auditorium, Plaza Level 38 South Dearborn Street Chicago, IL 60602 REFRESHMENTS WILL BE SERVED. o PLEASE RSVP BY SEPTEMBER 20 BY CALLING 800-922-6769 DIRECTIONS TO THE 2005 ANNUAL SHAREHOLDER INFORMATION MEETING The Bank One Auditorium is located on the Plaza Level of the Bank One building. The Bank One building is located in the center of the Loop, bordered by Dearborn Street on the east, Madison Street on the north, Clark Street on the west and Monroe Street on the south. 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 Expressway West. Travel on the Kennedy and exit using the Monroe Street exit. Turn right (east) from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn. FROM THE NORTH: Take the Kennedy Expressway (I-90/94) south to Chicago. Exit in the city at Monroe Street. Turn left (east) from the exit onto Monroe Street. Proceed east on Monroe Street to Dearborn. FROM THE WEST: Take the Eisenhower Expressway (I-290) from the west. This becomes Congress Street in the city. Take Congress east to Dearborn Street. Turn left (north) on Dearborn to Monroe 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 on Monroe Street to Dearborn. COLUMBIA ACORN FAMILY OF FUNDS SEMIANNUAL REPORT 2005 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: Discipline and Creativity 5 Understanding Your Expenses 8 COLUMBIA ACORN FUND In a Nutshell 10 At a Glance 11 Major Portfolio Changes 22 Statement of Investments 24 COLUMBIA ACORN INTERNATIONAL In a Nutshell 12 At a Glance 13 Major Portfolio Changes 36 Statement of Investments 38 Portfolio Diversification 43 COLUMBIA ACORN USA In a Nutshell 14 At a Glance 15 Major Portfolio Changes 44 Statement of Investments 45 COLUMBIA ACORN INTERNATIONAL SELECT In a Nutshell 16 At a Glance 17 Major Portfolio Changes 50 Statement of Investments 51 Portfolio Diversification 53 COLUMBIA ACORN SELECT In a Nutshell 18 At a Glance 19 Major Portfolio Changes 54 Statement of Investments 55 COLUMBIA THERMOSTAT FUND In a Nutshell 20 At a Glance 21 Statement of Investments 76 Statement of Assets and Liabilities 77 Statement of Operations 78 Statement of Changes in Net Assets 79 Financial Highlights 81 Notes to Financial Statements 82 COLUMBIA ACORN FAMILY OF FUNDS Statements of Assets and Liabilities 58 Statements of Operations 59 Statements of Changes in Net Assets 60 Financial Highlights 64 Notes to Financial Statements 69 Columbia Acorn Family of Funds Information 86 Management Fee Evaluation of the Senior Officer 87 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 >2005 MID-YEAR DISTRIBUTIONS The following table details the funds' mid-year distributions. The record date for COLUMBIA ACORN, COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN USA, COLUMBIA ACORN SELECT, COLUMBIA ACORN INTERNATIONAL SELECT, and COLUMBIA THERMOSTAT was June 6, 2005. The ex-dividend date was June 7, 2005, and the payable date was June 8, 2005.
---------------------------------------------------------------------------------------- COLUMBIA ACORN FUND CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains $0.3609 $0.3609 $0.3609 Short-term Capital Gains $0.0255 $0.0255 $0.0255 Ordinary Income None None None Reinvestment Price $25.70 $24.88 $24.86 ---------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains None None None Short-term Capital Gains None None None Ordinary Income $0.3296 $0.1352 $0.1426 Reinvestment Price $28.97 $28.50 $28.49 ---------------------------------------------------------------------------------------- COLUMBIA ACORN USA CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains $0.3640 $0.3640 $0.3640 Short-term Capital Gains None None None Ordinary Income None None None Reinvestment Price $25.17 $24.44 $24.44 ---------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains $0.0919 $0.0919 $0.0919 Short-term Capital Gains None None None Ordinary Income None None None Reinvestment Price $20.26 $19.61 $19.61 ---------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains None None None Short-term Capital Gains None None None Ordinary Income $0.2374 $0.1387 $0.1278 Reinvestment Price $17.64 $17.21 $17.23 ---------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT CLASS A CLASS B CLASS C -------------------------------------------- Long-term Capital Gains $0.0927 $0.0927 $0.0927 Short-term Capital Gains $0.1562 $0.1562 $0.1562 Ordinary Income None None None Reinvestment Price $13.00 $12.99 $12.98 ----------------------------------------------------------------------------------------
>NET ASSET VALUE PER SHARE AS OF 06/30/05
COLUMBIA COLUMBIA ACORN COLUMBIA COLUMBIA ACORN COLUMBIA INTERNATIONAL COLUMBIA THERMOSTAT ACORN FUND INTERNATIONAL ACORN USA SELECT ACORN SELECT FUND ----------------------------------------------------------------------------------------------------------------- Class A $26.21 $29.23 $25.73 $17.69 $20.68 $13.04 ----------------------------------------------------------------------------------------------------------------- Class B $25.37 $28.74 $24.97 $17.25 $20.01 $13.02 ----------------------------------------------------------------------------------------------------------------- Class C $25.35 $28.73 $24.96 $17.26 $20.00 $13.01 -----------------------------------------------------------------------------------------------------------------
2 COLUMBIA ACORN FAMILY OF FUNDS >SHARE CLASS PERFORMANCE Average Annual Total Returns through 6/30/05
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* 4.00% -1.98% 3.85% -1.15% 3.81% 2.81% --------------------------------------------------------------------------------------------------------------------- Year to date* 2.60% -3.30% 2.28% -2.72% 2.24% 1.24% --------------------------------------------------------------------------------------------------------------------- 1 year 14.22% 7.66% 13.41% 8.41% 13.32% 12.32% --------------------------------------------------------------------------------------------------------------------- 3 years 17.25% 14.96% 16.46% 15.71% 16.43% 16.43% --------------------------------------------------------------------------------------------------------------------- Life of fund 12.71% 11.31% 11.98% 11.70% 11.96% 11.96% --------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (10/16/2000) --------------------------------------------------------------------------------------------------------------------- 3 months* -0.33% -6.06% -0.50% -5.45% -0.50% -1.49% --------------------------------------------------------------------------------------------------------------------- Year to date* 2.83% -3.09% 2.47% -2.53% 2.43% 1.43% --------------------------------------------------------------------------------------------------------------------- 1 year 22.16% 15.14% 21.28% 16.28% 21.22% 20.22% --------------------------------------------------------------------------------------------------------------------- 3 years 17.32% 15.03% 16.49% 15.75% 16.51% 16.51% --------------------------------------------------------------------------------------------------------------------- Life of fund 4.20% 2.90% 3.50% 3.13% 3.50% 3.50% --------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (10/16/2000) --------------------------------------------------------------------------------------------------------------------- 3 months* 5.42% -0.64% 5.24% 0.24% 5.20% 4.20% --------------------------------------------------------------------------------------------------------------------- Year to date* 5.38% -0.68% 4.98% -0.02% 4.94% 3.94% --------------------------------------------------------------------------------------------------------------------- 1 year 15.44% 8.80% 14.67% 9.67% 14.52% 13.52% --------------------------------------------------------------------------------------------------------------------- 3 years 16.34% 14.07% 15.56% 14.80% 15.54% 15.54% --------------------------------------------------------------------------------------------------------------------- Life of fund 14.78% 13.35% 14.04% 13.78% 14.03% 14.03% --------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (10/16/2000) --------------------------------------------------------------------------------------------------------------------- 3 months* -1.00% -6.70% -1.14% -6.05% -1.20% -2.19% --------------------------------------------------------------------------------------------------------------------- Year to date* 0.44% -5.34% 0.17% -4.80% 0.05% -0.95% --------------------------------------------------------------------------------------------------------------------- 1 year 15.66% 9.01% 15.01% 10.01% 14.77% 13.77% --------------------------------------------------------------------------------------------------------------------- 3 years 15.00% 12.75% 14.22% 13.45% 14.18% 14.18% --------------------------------------------------------------------------------------------------------------------- Life of fund 0.44% -0.82% -0.25% -0.67% -0.25% -0.25% --------------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (10/16/2000) --------------------------------------------------------------------------------------------------------------------- 3 months* 5.40% -0.66% 5.20% 0.20% 5.20% 4.20% --------------------------------------------------------------------------------------------------------------------- Year to date* -0.27% -6.00% -0.62% -5.57% -0.67% -1.66% --------------------------------------------------------------------------------------------------------------------- 1 year 9.96% 3.64% 9.08% 4.08% 9.03% 8.03% --------------------------------------------------------------------------------------------------------------------- 3 years 14.05% 11.82% 13.23% 12.44% 13.24% 13.24% --------------------------------------------------------------------------------------------------------------------- Life of fund 10.63% 9.24% 9.88% 9.58% 9.86% 9.86% --------------------------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (3/3/2003) --------------------------------------------------------------------------------------------------------------------- 3 months* 2.54% -3.35% 2.39% -2.61% 2.39% 1.39% --------------------------------------------------------------------------------------------------------------------- Year to date* 1.37% -4.46% 0.99% -3.97% 0.99% 0.00% --------------------------------------------------------------------------------------------------------------------- 1 year 7.54% 1.36% 6.93% 1.93% 6.79% 5.79% --------------------------------------------------------------------------------------------------------------------- Life of fund 14.05% 11.19% 13.29% 12.19% 13.22% 13.22% --------------------------------------------------------------------------------------------------------------------- * Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. 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 AND MOST RECENT MONTH-END 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 FOLLOWS: THROUGH FIRST YEAR--5%, SECOND YEAR--4%, THIRD YEAR--3%, FOURTH YEAR--3%, FIFTH YEAR--2%, SIXTH YEAR--1%, THEREAFTER--0%; AND THE CLASS C CONTINGENT DEFERRED SALES CHARGE OF 1% FOR THE FIRST YEAR ONLY. PERFORMANCE 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 Adviser or its affiliates. Absent these waivers or reimbursement 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 6/30/05
2nd Year to 1 3 Life quarter* Date* year years of Fund --------------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND (10/16/2000) 4.00% 2.60% 14.22% 17.25% 12.71% --------------------------------------------------------------------------------------------------- Russell 2500 4.52% 1.24% 12.73% 14.76% 8.96% --------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -1.39% --------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 3.07% -0.16% 9.67% 12.45% 8.57% --------------------------------------------------------------------------------------------------- Lipper Mid-Cap Core Funds Index 3.13% 1.88% 11.47% 12.71% 4.90% --------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL (10/16/2000) -0.33% 2.83% 22.16% 17.32% 4.20% --------------------------------------------------------------------------------------------------- S&P/Citigroup EMI Global ex-US -0.40% 2.79% 21.33% 21.26% 10.85% --------------------------------------------------------------------------------------------------- MSCI EAFE -1.01% -1.17% 13.65% 12.06% 2.05% --------------------------------------------------------------------------------------------------- Lipper Int'l Small- Cap Funds Index -0.22% 3.62% 20.72% 21.47% 9.28% --------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA (10/16/2000) 5.42% 5.38% 15.44% 16.34% 14.78% --------------------------------------------------------------------------------------------------- Russell 2000 4.32% -1.25% 9.45% 12.81% 7.66% --------------------------------------------------------------------------------------------------- Lipper Small-Cap Core Funds Index 3.07% -0.16% 9.67% 12.45% 8.57% --------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -1.39% --------------------------------------------------------------------------------------------------- COLUMBIA ACORN INT'L SELECT (10/16/2000) -1.00% 0.44% 15.66% 15.00% 0.44% --------------------------------------------------------------------------------------------------- S&P/Citigroup World ex-US Cap Range $2-10B -0.29% 0.79% 17.64% 17.54% 8.94% --------------------------------------------------------------------------------------------------- MSCI EAFE -1.01% -1.17% 13.65% 12.06% 2.05% --------------------------------------------------------------------------------------------------- Lipper International Funds Index -0.60% -0.65% 13.45% 11.16% 2.50% --------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT (10/16/2000) 5.40% -0.27% 9.96% 14.05% 10.63% --------------------------------------------------------------------------------------------------- S&P MidCap 400 4.26% 3.85% 14.03% 13.16% 8.05% --------------------------------------------------------------------------------------------------- Lipper Mid-Cap Growth Index 3.14% -0.92% 7.31% 9.82% -6.13% --------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% 8.28% -1.39% --------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND (3/3/2003) 2.54% 1.37% 7.54% -- 14.05% --------------------------------------------------------------------------------------------------- S&P 500 1.37% -0.81% 6.32% -- 18.14% --------------------------------------------------------------------------------------------------- Lehman U.S. Credit Intermediate Bond Index 2.76% 1.56% 5.79% -- 4.47% --------------------------------------------------------------------------------------------------- Lipper Flexible Portfolio Funds Index 1.18% -0.36% 6.70% -- 14.78% --------------------------------------------------------------------------------------------------- * Not annualized.
PERFORMANCE SHOWN HERE IS PAST PERFORMANCE WHICH CANNOT GUARANTEE FUTURE RESULTS. CURRENT PERFORMANCE MAY BE HIGHER OR LOWER. 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 AND MOST RECENT MONTH-END 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. S&P/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. S&P/CITIGROUP WORLD EX-US CAP RANGE $2-10B is a subset of the broad market selected by the index sponsor, representing the mid-cap developed market 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 and Columbia Acorn USA. 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. 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. It is not possible to invest directly in an index. 1-800-922-6769 4 >SQUIRREL CHATTER: DISCIPLINE AND CREATIVITY [PHOTO OF RALPH WANGER] A popular new book by Tom Friedman, "The World Is Flat: A Brief History of the Twenty-First Century," recounts how developing countries such as India and China are using modern technology to compete with the United States in both manufacturing and services. He contrasts the success of China and India to the failure of the Arab states to participate in the modern world. He deplores the influence of Yamani, the former Saudi oil minister, who used oil as an economic weapon, and Osama bin Laden who uses terror as a political weapon. Friedman compares the stagnant current state of Arab culture with its peak in the 12th century. "What makes Yamanism and Bin Ladenism unfortunate as strategies for the Arabic world is that they ignore the examples within the Arab culture and civilization - when it was at its height - of discipline, hard work, knowledge, achievement, scientific inquiry, and pluralism." 1 The popular Susan Hockfield was just installed as president of MIT. In her inaugural speech she invoked her list of virtues. She said, "The value of engineering - the rigor; the unflappable curiosity; the discipline and creativity; the appetite for good, old fashioned hard work; the passionate, enthusiastic, can do, hands-on, fix-it-now attitude - these values are and always will be the values of MIT." The rules for success in the world don't seem to have changed very much. Twelfth century Cordoba and 21st century Cambridge are completely different in almost every way, but the characteristics that make you successful have not changed. Any financial analyst or serious investor should apply the engineer's characteristics of discipline, hard work, knowledge and enthusiasm to investing. President Hockfield's linking of discipline and creativity is interesting. It's widely believed that we should diversify and balance our investments. We balance stocks vs. bonds, growth stocks vs. value stocks, big-cap vs. small-cap stocks, and U.S. stocks vs. international, but it is unusual to think of the balance between discipline and creativity; yet this balance is what I believe brings good investment results. Discipline without creativity is sterile - you tend to get an index fund. Index funds run by computer algorithm are boring and backward looking - although they have a significant place in investment portfolios. Creativity without discipline tends to result in wild speculation and money-losing results. We all remember the dot.com's in 1999 when the market was dominated by speculators who ignored valuation in favor of science- fiction fantasies. The resulting bubble was a seductive, narcotic experience for a year or two but of course ended very badly. We believe the Columbia Acorn Funds have been successful because our analysts have been able to maintain a balance between discipline and creativity. WE ARE NOT MANUFACTURERS Organizations that are in the business of marketing mutual funds often prefer discipline and are made nervous by creativity. For instance, Raymond "Chip" Mason, chairman of Legg Mason, a major force in the mutual fund business, said recently, "For two years we've been looking to cross the line and become pure asset management. All the regulators have been pointing toward the need to separate the manufacturing and distribution businesses." 2 I have been in corporate meetings in which mutual fund portfolio management was called "manufacturing" but this is a strange and inapt metaphor. Manufacturers make products. Mutual funds are NOT a product. Cap'n Crunch cereal is a product. When you go to the store to buy a new box of Cap'n Crunch you expect the taste and nutrition performance to be exactly like the last box. Manufacturing cereal is very disciplined resulting in high quality and high reliability, so that every box is identical. Since you are a mutual fund shareholder you know that a mutual fund could be a lot better or a lot worse than you expected when you bought it. Investing involves forecasting the future, but forecasting is an uncertain and sloppy process. While discipline is important, you need a lot of creativity as well. Predicting the future does not require a fortune teller with a crystal ball. It is more like watching a skilled athlete. When you go to a baseball game and a batter hits a fly ball to left field, the fielder will see the ball heading his direction and, by experience, run to where the ball is going to land and make what looks like a routine catch. The fielder has to predict the flight of the ball, which for a physicist would require solving a complicated equation, but the player shows that it is not an impossible task. Like the outfielder, we have figured out where trends are likely going to land with reasonable success. As in baseball, the ball can elude the fielder and the batter 5 ends up on second base. Sometimes our analysts miss the ball too, but for the full season we tend to catch more balls than we miss. TWO WHEELS GOOD, FOUR WHEELS BAD Other teams haven't done so well. Forty years ago, major U.S. car makers were among the largest companies in the world and were highly profitable. Since then, the U.S. automotive industry has fallen into a long slump. Their corporate bonds have been downgraded in quality, which is a definite sign of financial problems. I believe that these companies were complacent and arrogant, so the German and Japanese car makers beat them up. A long time ago, perhaps 1966, I attended a meeting of the Chicago Science Analysts with the General Time Corporation. The company's main business was making name-brand clocks like Seth Thomas and Big Ben. It also made automobile clocks. The clocks were sold as accessories with the car. They were mechanical clocks because electronic clocks hadn't yet been invented. They worked for about three months and then broke. The U.S. automotive giant that bought the clocks from General Time paid $3.25 per clock and resold it to the customer for $21. I asked the president of General Time why his clocks didn't work better. I knew this was an impertinent question but I wanted to see how he would react. I expected him to take a defensive position retorting that the clocks were fine but weren't being used correctly. To my surprise he admitted that the clocks WERE lousy and he explained why. General Time couldn't make a good clock for $3.25. The clock needed an additional component that would have made it a sturdy, reliable device, but this improvement would have raised the selling price to $3.75. Its customer, the automobile manufacturer, was adamant about sticking to the lower price. Even to an inexperienced analyst, as I was in 1966, I did not see how the automaker could prosper if it was not delivering a high-quality car. Such a successful company could have paid $3.75 for a clock and sold it for a decent profit even if it kept the price at $21. While this would have been a less enormous markup, the car likely would have been a better vehicle. If the automaker was willing to sell a crummy clock, then I thought that customers would perceive that it was cutting corners on all the other components of the vehicle too. Bad clock, bad car. This willingness to forego quality for price made room for the imports. Why am I bringing up an anecdote from 40 years ago? I think there are some useful lessons here for financial analysts and investors. First, in a management meeting it is okay to ask tough questions. You get more meaningful answers that way. Second, you can find out a lot about a company by talking to its suppliers or customers. Company spokesmen will only give you their own corporate press release. Third, a long-term trend will take a long time to develop but it is enormously important. At the time of my 1966 meeting, U.S. automakers were riding high because foreign car imports were not yet a problem. In 1960, Japan exported only 39,000 vehicles. By 1970, the Japanese were starting to exploit the lower quality of U.S. cars and exported 1.1 million cars. In 1980, exports rose to 6 million and the Japanese were producing more vehicles than U.S. manufacturers. U.S. automotive companies had to react to the loss of market share from high-quality imports. However, once there is a loss of market share, it is not usually readily reversible. DAVID ALWAYS BEATS GOLIATH There are several lessons we can learn from the decline of Arab civilization and the problems of U.S. auto companies: (1) To operate a successful business, the world is too competitive to be complacent. Like baseball players, companies have to fight to keep their position on the team. Great U.S. businesses must constantly compete in the world market and it is darn tough. (2) Big companies are often just big targets. Small companies are hungry to succeed and are constantly focused on improving with the hope of taking some of the flabby giant's customers. (3) History provides a useful context. Discipline, creativity, hard work, knowledge, achievement, and a can-do, hands-on, fix-it-now attitude worked in the past and will work now. (4) We believe small-cap investing works if you can identify the hungry, small companies whose employees embrace our list of exemplary values. The core investment strategy of the Columbia Acorn Funds has always been to try to find small- and mid-cap companies that are on the way up. We don't want to own once-great companies that are now on their way down. This is partly a matter of personal taste, because we find following big, sick companies 1-800-922-6769 6 to be depressing. Even though there are occasional turnarounds in these big companies, it seems to us that is not the way to bet. SO LONG AND BEST REGARDS! This is my final "Squirrel Chatter." I am retiring from Columbia Wanger Asset Management as of September 30, but I will still be a trustee of Columbia Acorn Trust. While I considered writing a few more essays, current regulatory rules are not conducive to the free-ranging thought that was characteristic of these essays. I have great confidence in Chuck McQuaid and his team of analysts and portfolio managers to keep the performance of the Funds at a competitive level. Thank you, fellow shareholders, for your support over 35 years. I regard myself as truly fortunate to have been able to build a career in this exciting industry. I am especially proud that we have enabled thousands of our shareholders to pursue their economic goals by investing in our funds. COLUMBIA WAM NEWS We are pleased to announce that Ashish Kohli has joined our domestic analyst team to follow health care. Jason Selch, who followed energy, departed in May. We are searching for his replacement and continue to talk to some promising candidates. Your Columbia Acorn investment team includes 20 investment analysts and portfolio managers. /s/ Ralph Wanger Ralph Wanger FOUNDER, ADVISOR AND TRUSTEE COLUMBIA WANGER ASSET MANAGEMENT, L.P. -------------------------------------------------------------------------------- 1 Friedman, Thomas, THE WORLD IS FLAT: A BRIEF HISTORY OF THE TWENTY-FIRST CENTURY, Farrar, Straus and Giroux, 2005. Page 405. 2 Raymond "Chip" Mason, chairman of Legg Mason, THE WALL STREET JOURNAL, June 27, 2005, page C1. 7 >UNDERSTANDING YOUR EXPENSES As a fund shareholder, you incur two types of costs. There are transaction costs, which generally include sales charges on purchases and may include redemption or exchange fees. There are also ongoing costs, which generally include investment advisory fees, Rule 12b-1 fees, and other fund expenses. The information on these pages is intended to help you understand your ongoing costs of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds. ANALYZING YOUR FUND'S EXPENSES To illustrate these ongoing costs, we have provided an example and calculated the expenses paid by investors in the Class A, B and C shares of the Columbia Acorn Funds for the last six months. The information in the following table is based on an initial investment of $1,000, which is invested at the beginning of the period and held for the entire period. Expense information is calculated two ways and each method provides you with different information. The amount listed in the "actual" column is calculated using each fund's actual operating expenses and total return for the period. The amount listed in the "hypothetical" column assumes that the return each year is 5% before expenses and then applies each fund's actual expense ratio for the period to the hypothetical return. You should not use the hypothetical account values and expenses to estimate either your actual account balance at the end of the period or the expenses you paid during the reporting period. COMPARE WITH OTHER FUNDS Since all mutual funds are required to include the same hypothetical calculations about expenses in shareholder reports, you can use this information to compare the ongoing cost of investing in the funds with other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. As you compare hypothetical examples of other funds, it is important to note that hypothetical examples are meant to highlight the continuing cost of investing in a fund and do not reflect any transactional costs, such as sales charges or redemption or exchange fees. ESTIMATING YOUR ACTUAL EXPENSES To estimate the expenses that you paid over the period, first you will need your account balance at the end of the period: o For shareholders who receive their account statements from Columbia Management Services, Inc., your account balance is available online at www.columbiafunds.com or by calling Shareholder Services at 800.922.6769. o For shareholders who receive their account statements from their brokerage firm, contact your brokerage firm to obtain your account balance. 1. Divide your ending account balance by $1,000. For example, if an account balance was $8,600 at the end of the period, the result would be 8.6. 2. In the section of the table titled "Expenses paid during the period," locate the amount for your fund. You will find this number is in the column labeled "actual." Multiply this number by the result from step 1. Your answer is an estimate of the expenses you paid on your account during the period. 1-800-922-6769 8 >UNDERSTANDING YOUR EXPENSES >January 1, 2005 - June 30, 2005
ACCOUNT VALUE AT ACCOUNT VALUE AT FUND'S THE BEGINNING OF THE END OF EXPENSES PAID ANNUALIZED THE PERIOD ($) THE PERIOD ($) DURING THE PERIOD ($) EXPENSE ---------------------------------------------------------------------------------------------------- RATIO (%)* ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ACTUAL HYPOTHETICAL ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN FUND ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $1,025.98 $1,019.54 $5.32 $5.31 1.06% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $1,022.81 $1,016.12 $8.78 $8.75 1.75% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $1,022.41 $1,015.62 $9.28 $9.25 1.85% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $1,028.32 $1,018.30 $6.59 $6.56 1.31% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $1,024.70 $1,014.73 $10.19 $10.14 2.03% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $1,024.30 $1,014.38 $10.54 $10.49 2.10% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN USA ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $1,053.80 $1,018.15 $6.82 $6.71 1.34% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $1,049.79 $1,014.73 $10.32 $10.14 2.03% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $1,049.39 $1,014.23 $10.82 $10.64 2.13% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL SELECT ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $1,004.41 $1,016.36 $8.45 $8.50 1.70% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $1,001.69 $1,013.39 $11.42 $11.48 2.30% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $1,000.50 $1,012.65 $12.15 $12.23 2.45% ----------------------------------------------------------------------------------------------------------------- COLUMBIA ACORN SELECT ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $997.32 $1,018.60 $6.19 $6.26 1.25% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $993.80 $1,014.98 $9.79 $9.89 1.98% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $993.31 $1,014.53 $10.23 $10.34 2.07% ----------------------------------------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND ----------------------------------------------------------------------------------------------------------------- Class A $1,000 $1,000 $1,013.69 $1,022.32 $2.50 $2.51 0.50% ----------------------------------------------------------------------------------------------------------------- Class B $1,000 $1,000 $1,009.92 $1,019.34 $5.48 $5.51 1.10% ----------------------------------------------------------------------------------------------------------------- Class C $1,000 $1,000 $1,009.92 $1,018.60 $6.23 $6.26 1.25% -----------------------------------------------------------------------------------------------------------------
Expenses paid during the period are equal to each fund's annualized expense ratio, multiplied by the average account value over the period, then multiplied by the number of days in the fund's most recent fiscal half-year and divided by 365. Had the Investment Adviser and/or Transfer Agent not waived a portion of expenses, total return would have been reduced. It is important to note that the expense amounts shown in the table are meant to highlight only ongoing costs of investing in the funds and do not reflect any transactional costs, such as sales charges, redemption or exchange fees. Therefore, the hypothetical examples provided may not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher. Columbia Thermostat Fund's expenses do not include fees and expenses incurred by the Fund from the underlying portfolio funds. * For the six months ended 06/30/05. 9 COLUMBIA ACORN FUND >IN A NUTSHELL [PHOTO OF CHARLES P. MCQUAID AND ROBERT A. MOHN] Columbia Acorn Fund was up 4.00% (Class A shares, without sales charge) in the second quarter, slightly underperforming the Russell indexes but outperforming the Lipper Small- and Mid-Cap Funds indexes as well as the large-cap S&P 500 Index. In the first half of 2005, the Fund grew 2.60%, moderately beating all of its benchmarks. (See Page 4 performance data). PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. Columbia Acorn's domestic stocks rose 5.16% in the quarter, driven by good stock selections. Handbag designer Coach and women's apparel retailer Chico's FAS were the Fund's two top dollar winners, each ringing up gains of about 20%. Hobby goods retailer Michaels Stores and apparel retailer Abercrombie & Fitch also were among our top 10 dollar gainers, rising 14% and 20% respectively. All were up on better than expected earnings and outperformed their group in the quarter. We thank our consumer analyst, Susie Hultquist, for these fine stock picks. Esco Technologies, a producer of remotely read electric meters, jumped 25% on large orders and fine earnings (see sidebar for details). Filter maker Cuno surged 39% in the quarter when it agreed to sell. Our industrial analyst Rob Chalupnik found both of these winners. Southwestern Energy spurted up 66% in the quarter, as investors got excited about new drilling prospects. Communications tower company Crown Castle International transmitted a 26% gain, spurred by an attractive debt refinancing. Hospitality information system provider Micros Systems served a 22% return on better than expected earnings. Columbia Acorn's largest dollar losers were Navigant Consulting, off 35%, and Kronos, down 21%, both lower due to earnings estimate cuts. Harley-Davidson hit a speed bump, falling 14% on lower than expected production hikes. Columbia Acorn's foreign stocks rose 1.91% and ended the quarter representing 15% of the Fund. Oil-pipe makers Vallorec and Tenaris continued their runs, each producing gains of more than 30%. Sweden-based kitchen cabinet maker Nobia fell 21% on lower revenues and manufacturing problems in its U.K. operations. The Fund's foreign stocks overall did fine against their benchmarks and were up nicely in local currencies, but dollar gains were slashed by currency movements. /s/ Charles P. McQuaid /s/ Robert A. Mohn Charles P. McQuaid Robert A. Mohn LEAD PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- METERING SUCCESS -------------------- We wrote about Esco Technologies in our second quarter 2004 shareholder report, citing the virtues of all three of its businesses - filters, remotely read electric meters, and radio frequency shielding products. Since the company's meter business is accelerating and the stock has continued to do well, we are providing more perspective. We had unsuccessfully invested in remote metering many years ago, so this time we did lots of homework. We talked to customers and competitors and visited trade shows. Our contacts confirmed that Esco's meters were reliable and cost effective, and could help manage peak electricity demand. Meter orders have surged and meters are now driving Esco's profits. The stock is up 252% from our first purchase and we think excellent growth may continue. -------------------------------------------------------------------------------- SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: COACH, 1.4%; CHICO'S FAS, 1.2%; MICHAELS STORES, 0.9%; ABERCROMBIE & Fitch, 0.6%; ESCO TECHNOLOGIES, 0.7%; CUNO, 0.4%; SOUTHWESTERN ENERGY, 0.3%; CROWN CASTLE INTERNATIONAL, 0.6%; MICROS SYSTEMS, 0.6%, NAVIGANT CONSULTING, 0.2%, KRONOS, 0.4%, HARLEY-DAVIDSON, 0.6%, VALLOUREC, 0.3%; TENARIS, 0.3%; NOBIA,, 0.2%. 1-800-922-6769 10 COLUMBIA ACORN FUND TICKER SYMBOL: LACAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $14,502.8 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005
------------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR 3 YEARS (10/16/2000) ------------------------------------------------------- Returns before NAV 2.60% 14.22% 17.25% 12.71% taxes POP -3.30 7.66 14.96 11.31 -------------------------------------------------------------------------------- Returns after taxes NAV 2.35 13.32 16.93 11.87 on distributions POP -3.53 6.81 14.65 10.48 -------------------------------------------------------------------------------- Returns after taxes NAV 1.96 10.22 14.94 10.74 on distributions and POP -1.89 5.89 12.91 9.49 sale of fund shares -------------------------------------------------------------------------------- S&P 500 (pretax) -0.81 6.32 8.28 -1.39 -------------------------------------------------------------------------------- Russell 2500 (pretax) 1.24 12.73 14.76 8.96 --------------------------------------------------------------------------------
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, 2005 [PIE CHART] Consumer Goods/Services 21.0% Industrial Goods/Services 15.4% Finance 12.1% Other* 11.6% Energy/Minerals 9.4% Health Care 8.6% Information 21.9% Software/Services 9.0% Computer Related Hardware 6.6% Telecommunications 3.9% Media 2.4% * Other includes short-term obligations, cash and other assets less liabilities of 7.6%. Foreign equities within the portfolio were 15.0% diversified by country as follows: 5.7% Europe ex-Ireland & UK; 2.9% UK/Ireland; 2.8% Latin America and Emerging Markets; 1.8% Canada; 1.3% Japan; 0.5% Australia/New Zealand. THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN FUND (CLASS A) -------------------------------------------------------------------------------- >October 16, 2000 through June 30, 2005 Illustration is based on a hypothetical $50,000 investment from inception in Class A shares of the Fund, which includes the 4.50% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Adviser 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 3,000 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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $87,883 $85,204 $85,138 ------------------------------------------------------ WITH SALES CHARGE $83,929 $84,204 $85,138 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA ACORN COLUMBIA ACORN FUND-A FUND-A WITH AT NAV SALES CHARGE RUSSELL 2500 ----------------- -------------- ------------ 10/16/00 50000 47750 50000 10/31/00 51370 49058 52159 48668 46478 47569 12/31/00 53695 51279 51666 54662 52202 53364 53257 50861 49928 3/31/01 50823 48536 47189 55291 52803 51356 57635 55041 52901 6/30/01 58390 55762 53652 57245 54669 51733 54961 52488 50038 9/30/01 47476 45339 43563 49508 47280 45815 53280 50882 49520 12/31/01 56679 54129 52296 56107 53582 51647 55372 52880 50743 3/31/02 59414 56740 54251 59254 56587 54113 57440 54856 52527 6/30/02 54511 52058 49567 48013 45853 43652 48397 46220 43784 9/30/02 45498 43451 40315 47409 45276 41629 50467 48196 45027 12/31/02 48842 46644 42990 47665 45520 41848 46902 44792 40842 3/31/03 47475 45338 41232 51581 49260 44906 55213 52728 49323 6/30/03 56902 54341 50265 59542 56863 52967 62633 59814 55418 9/30/03 61900 59114 54664 66932 63920 58983 69101 65991 61204 12/31/03 70759 67575 62555 73307 70008 64837 74707 71345 65839 3/31/04 75790 72379 66235 73046 69759 63054 74354 71008 64341 6/30/04 76934 73472 66457 73010 69725 62590 72915 69634 62430 9/30/04 76233 72803 64785 78116 74601 66263 82998 79263 71210 12/31/04 85657 81802 73998 83773 80003 71512 86118 82243 73131 3/31/05 84501 80698 71674 81036 77390 68451 85064 81236 72593 6/30/05 87883 83929 74915 -------------------------------------------------------------------------------- COLUMBIA ACORN FUND TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Coach 1.4% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 2. Chico's FAS 1.2% WOMEN'S SPECIALTY RETAILER 3. XTO Energy 1.2% NATURAL GAS PRODUCER 4. International Game Technology 1.2% SLOT MACHINES & PROGRESSIVE JACKPOTS 5. AmeriCredit 1.0% AUTO LENDING 6. Expeditors International of Washington 0.9% INTERNATIONAL FREIGHT FORWARDER 7. Michaels Stores 0.9% CRAFT & HOBBY SPECIALTY RETAILER 8. Western Wireless 0.9% RURAL CELLULAR PHONE SERVICES 9. Peoples Bank of Bridgeport 0.9% CONNECTICUT SAVINGS & LOAN 10. ITT Educational Services 0.8% POSTSECONDARY DEGREE PROGRAMS 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 >IN A NUTSHELL [PHOTO OF P. ZACHARY EGAN AND LOUIS J. MENDES III.] Columbia Acorn International finished the second quarter down 0.33% (Class A shares, without sales charge), slightly ahead of the benchmark S&P/Citigroup EMI Global ex-U.S. return which fell 0.40%. The larger cap MSCI EAFE Index was down 1.01% in the quarter. Year-to-date, the Fund was up 2.83%, which puts it ahead of the benchmark, and well ahead of the EAFE Index. As has been the case for several years, international small-cap stocks continued to substantially outperform their large-cap counterparts. PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAT THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. Steel pipe manufacturers seemed unlikely candidates for the quarter's biggest winners considering the poor performance of the steel sector in general, but two of the Fund's investments, Vallourec and Tenaris, earned this distinction by returning more than 30% to shareholders. Their specialty steel products are critical to the successful development of oil and gas fields globally. In the past year, both companies have seen strong volume and price increases as high energy prices stimulated oil and gas companies to increase spending on exploration and pipelines. These two companies have been central to our strategy of taking advantage of an anticipated rebound in oil-field service spending. As both companies were among the Fund's top holdings at the beginning of the quarter, their contribution to overall return was substantial. Other positive drivers to performance were Housing Development Finance, the Indian mortgage finance company, which rose 25% on continued strong mortgage growth, and SES Global, the European satellite services company, up 19%, from the region's switch to an HDTV format. During the quarter, the U.S. dollar reversed its recent slide against most world currencies, appreciating more than 7% against the euro. This compounded otherwise moderate weakness on several of our long-term European winners, such as Nobia (kitchen cabinets), Sligro Food Group (food distribution) and United Services Group (temporary staffing), each of which fell more than 15% in dollar terms. Other sizable holdings negatively affecting performance came from diverse sectors in Japan, including Funai Electric (consumer electronics), and Kappa Create (restaurants). Funai Electric was hurt by raw material price increases while Kappa Create's profitability remains under pressure as it works to maintain its share of an increasingly crowded marketplace. /s/ P. Zachary Egan /s/ Louis J. Mendes III P. Zachary Egan Louis J. Mendes III CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- PIPING PROFITS -------------------- Headquartered in Argentina, Tenaris is a global manufacturer and supplier of seamless steel pipe products and related services. It has locations ranging from Japan to Mexico to Italy. High oil prices are driving energy companies to increase their exploration and production activities. With more than 50% of its revenue coming from energy-related equipment sales, this directly translates into more orders for the company. In addition, Tenaris competes in a specialty niche, high-demand product category that is giving it the pricing power to protect and expand margins even as raw material prices are falling. -------------------------------------------------------------------------------- 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. SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: VALLOUREC, 1.5%; TENARIS, 1.2%; HOUSING DEVELOPMENT FINANCE, 1.2%; SES GLOBAL, 1.3%; NOBIA, 0.7%; SLIGRO FOOD GROUP, 0.7%; UNITED SERVICES GROUP, 0.8%; FUNAI ELECTRIC, 0.5%; KAPPA CREATE, 0.3%. 1-800-922-6769 12 COLUMBIA ACORN INTERNATIONAL TICKER SYMBOL: LAIAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $2,268.3 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005
------------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR 3 YEARS (10/16/2000) ------------------------------------------------------- Returns before NAV 2.83% 22.16% 17.32% 4.20% taxes POP -3.09 15.14 15.03 2.90 -------------------------------------------------------------------------------- Returns after taxes NAV 2.42 21.89 17.21 3.50 on distributions POP -3.47 14.88 14.92 2.20 -------------------------------------------------------------------------------- Returns after taxes NAV 1.83 14.60 15.04 3.37 on distributions and POP -2.01 10.03 13.02 2.25 sale of fund shares -------------------------------------------------------------------------------- S&P/Citigroup EMI 2.79 21.33 21.26 10.85 Global 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, 2005 [PIE CHART] Consumer Goods/Services 19.4% Finance 13.8% Information 13.6% Other* 10.5% Energy/Minerals 9.5% Health Care 6.7% Industrial Goods/Services 26.5% * Other includes short-term obligations, cash and other assets less liabilities of 4.0%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL (CLASS A) -------------------------------------------------------------------------------- >October 16, 2000 through June 30, 2005 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 Adviser or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. The S&P/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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $12,140 $11,762 $11,761 ------------------------------------------------------ WITH SALES CHARGE $11,442 $11,562 $11,761 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA ACORN COLUMBIA ACORN INTERNATIONAL - INTERNATIONAL - A S&P/CITIGROUP A AT NAV WITH SALES CHARGE EMI GLOBAL EX-US ----------------- ----------------- ---------------- 10/16/00 10000 9425 10000 10153 9569 9993 9322 8786 9552 12/31/00 9514 8967 9925 9941 9369 10110 9222 8692 9717 3/31/01 8332 7853 8965 8651 8154 9552 8592 8098 9532 6/30/01 8167 7698 9209 7838 7387 8939 7676 7234 8915 9/30/01 6626 6245 7754 6939 6540 8069 7326 6905 8401 12/31/01 7460 7031 8470 7277 6859 8316 7252 6835 8456 3/31/02 7627 7188 9007 7874 7422 9194 7838 7387 9488 6/30/02 7517 7085 9112 6720 6334 8339 6610 6230 8289 9/30/02 6017 5671 7524 6045 5698 7694 6228 5870 7981 12/31/02 6233 5874 7886 6078 5729 7754 5912 5572 7615 3/31/03 5822 5488 7541 6351 5986 8252 6872 6477 8956 6/30/03 7066 6660 9290 7217 6802 9621 7536 7102 10081 9/30/03 7821 7372 10542 8417 7933 11309 8642 8145 11514 12/31/03 9161 8634 12225 9430 8888 12665 9781 9218 13101 3/31/04 9781 9218 13422 9565 9015 12971 9593 9042 12973 6/30/04 9940 9369 13390 9678 9122 12917 9724 9164 13056 9/30/04 10126 9544 13543 10488 9885 13958 11285 10636 15057 12/31/04 11806 11127 15804 11913 11228 15954 12553 11832 16730 3/31/05 12180 11480 16310 11802 11124 15798 11827 11147 15909 6/30/05 12140 11442 16245 -------------------------------------------------------------------------------- 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. Vallourec (France) 1.5% SEAMLESS TUBES 4. Billabong International (Australia) 1.4% ACTION SPORTS APPAREL BRAND MANAGER 5. Fugro (Netherlands) 1.4% SURVEY & GPS SERVICES 6. SES Global (France) 1.3% SATELLITE BROADCASTING SERVICES 7. Neopost (France) 1.3% POSTAGE METER MACHINES 8. Grafton Group (Ireland) 1.2% BUILDING MATERIALS, WHOLESALING & DIY RETAILING 9. Housing Development Finance (India) 1.2% PREMIER MORTGAGE LENDER IN INDIA 10. Tenaris (Argentina) 1.2% STEEL PIPE FOR OIL WELLS & PIPELINES 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 USA >IN A NUTSHELL [PHOTO OF ROERT A. MOHN] Small-cap stocks had a strong second quarter. Columbia Acorn USA rose 5.42% (Class A shares, without sales charge), slightly more than the small-cap Russell 2000 Index's 4.32% increase. For the first six months of the year, Columbia Acorn USA was up 5.38%, nicely ahead of the Russell 2000's 1.25% decline. PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. Industrial stocks stoked the Fund's performance for the quarter. Esco Technologies was the biggest dollar winner for the Fund, rising 25% on news that it will likely land a huge contract to install automated electric meter readers. Cuno, a water filtration company, spiked 39% after announcing it was being acquired. Many of the Fund's holdings had been attractive to larger corporate acquirers. Cuno was the fifth company in the Fund to be bought out this year, joining Western Wireless and Brookstone. Rising oil prices lifted energy stocks last quarter. Our energy portfolio was stocked with companies benefiting not only from higher commodity prices, but also from strong internal production growth. Top holdings Quicksilver Resources, up 31%, and Southwestern Energy, up 66%, had exciting new drilling prospects in the Barnet and Fayetteville gas fields. Other winners for the quarter were cellular tower owner Crown Castle International, up 27%, and teen retailer Abercrombie & Fitch up 20%. Our worst-performing group was technology. Software companies Kronos, down 21% and JDA Software Group, off 19%, decreased on weak March-quarter earnings results. SeaChange International dropped 46% as sales of its video-on-demand servers fell short. The turnaround at mobile computing and bar-code scanner company Symbol Technologies has taken longer than hoped, which sent its stock down 32% for the quarter. The U.S. stock market has been stuck in a see-saw trading range for the past 18 months. Flat markets like this one may not make for exciting business headlines but were just as plentiful with investment opportunities as the good old Roaring Nineties bull markets. /s/ Robert A. Mohn Robert A. Mohn LEAD PORTFOLIO MANAGER -------------------------------------------------------------------------------- The Light burns Bright at ---------------------------- Genlyte The Genlyte Group has been a major winner for Columbia Acorn USA, returning 66% since its purchase in June 2004. Genlyte is a leading manufacturer of lighting fixtures and controls and sells product through independent distributors servicing the architect and designer community. This is a better distribution channel than the big-box retailers, with customers willing to pay a higher price for quality design features and service. Although the commercial construction market has been weak for several years, Genlyte managed to grow earnings by taking market share away from competitors and improving profitability. We believe the company's strong market position and the potential for a recovery in the commercial construction market makes Genlyte a solid investment. -------------------------------------------------------------------------------- SMALL-CAP STOCKS ARE OFTEN MORE VOLATILE AND LESS LIQUID THAN THE STOCKS OF LARGER COMPANIES. SMALL COMPANIES MAY HAVE A SHORTER HISTORY OF OPERATIONS THAN LARGER COMPANIES AND MAY HAVE A LESS DIVERSIFIED PRODUCT LINE, MAKING THEM MORE SUSCEPTIBLE TO MARKET PRESSURE. AS OF 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: ESCO TECHNOLOGIES, 2.9%; CUNO, 1.0%; WESTERN WIRELESS, 2.8%; BROOKSTONE, 0.3%; QUICKSILVER RESOURCES, 2.3%; SOUTHWESTERN ENERGY, 0.5%; CROWN CASTLE INTERNATIONAL, 2.1%; ABERCROMBIE & Fitch, 2.0%; KRONOS, 1.1%; JDA SOFTWARE GROUP, 1.1%; SEACHANGE INTERNATIONAL, 0.3%; SYMBOL TECHNOLOGIES, 0.6%; GENLYTE, 1.5%. 1-800-922-6769 14 COLUMBIA ACORN USA TICKER SYMBOL: LAUAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $994.4 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005 -------------------------------------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR 3 YEARS (10/16/2000) -------------------------------------------------------------------------------- Returns before NAV 5.38% 15.44% 16.34% 14.78% taxes POP -0.68 8.80 14.07 13.35 -------------------------------------------------------------------------------- Returns after taxes NAV 5.15 15.10 16.23 14.66 on distributions POP -0.89 8.48 13.96 13.23 -------------------------------------------------------------------------------- Returns after taxes NAV 3.79 10.47 14.17 12.95 on distributions and POP -0.17 6.13 12.17 11.67 sale of fund shares -------------------------------------------------------------------------------- Russell 2000 (pretax) -1.25 9.45 12.81 7.66 -------------------------------------------------------------------------------- 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, 2005 [PIE CHART] Consumer Goods/Services 18.0% Health Care 14.2% Other* 10.2% Energy/Minerals 11.8% Industrial Goods/Services 9.7% Finance 8.7% Information 27.4% Software/Services 11.8% Telecommunications 9.1% Computer Related Hardware 4.4% Media 2.1% * Other includes short-term obligations, cash and other assets less liabilities of 9.5%. THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN USA (CLASS A) -------------------------------------------------------------------------------- >October 16, 2000 through June 30, 2005 Illustration is based on a hypothetical $50,000 investment from inception in Class A shares of the Fund, which includes the 4.50% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Adviser 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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $95,752 $92,871 $92,834 ------------------------------------------------------ WITH SALES CHARGE $91,443 $91,871 $92,834 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA ACORN COLUMBIA ACORN USA - A WITH USA - A AT NAV SALES CHARGE RUSSELL 2000 -------------- -------------- ------------ 10/16/00 50000 47750 50000 52060 49717 51820 49025 46819 46500 12/31/00 53795 51374 50494 57195 54621 53123 57012 54446 49637 3/31/01 55672 53167 47209 62397 59589 50902 65867 62903 52153 6/30/01 67671 64626 53954 68355 65279 51034 66441 63451 49385 9/30/01 56827 54270 42737 56969 54405 45238 60296 57583 48741 12/31/01 63823 60951 51749 64551 61646 51211 62324 59519 49807 3/31/02 67609 64566 53810 68596 65509 54301 64693 61782 51891 6/30/02 60792 58056 49316 52476 50114 41868 51673 49347 41761 9/30/02 47808 45656 38762 50069 47816 40005 54410 51961 43575 12/31/02 51711 49384 41149 50910 48619 40010 50182 47923 38801 3/31/03 50292 48029 39301 55216 52731 43027 60941 58199 47645 6/30/03 61892 59107 48507 64776 61861 51542 68313 65239 53905 9/30/03 66708 63706 52910 73525 70217 57353 75091 71712 59389 12/31/03 75639 72236 60593 79542 75963 63226 79908 76312 63793 3/31/04 79325 75755 64387 77358 73877 61105 80382 76765 62077 6/30/04 82939 79206 64691 77830 74327 60336 76701 73250 60025 9/30/04 79585 76004 62843 81845 78162 64080 87754 83806 69639 12/31/04 90865 86772 71700 89584 85549 68708 91268 87157 69872 3/31/05 90828 86741 67872 87086 83167 63985 91893 87758 68173 6/30/05 95752 91443 70802 -------------------------------------------------------------------------------- COLUMBIA ACORN USA TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Esco Technologies 2.9% FILTRATION & TEST EQUIPMENT 2. AmeriCredit 2.8% AUTO LENDING 3. Western Wireless 2.8% RURAL CELLULAR PHONE SERVICES 4. Edwards Lifesciences 2.5% HEART VALVES 5. Micros Systems 2.3% INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 6. Quicksilver Resources 2.3% NATURAL GAS & COAL SEAM GAS PRODUCER 7. ITT Educational Services 2.1% POSTSECONDARY DEGREE PROGRAMS 8. Crown Castle International 2.1% COMMUNICATION TOWERS 9. Abercrombie & Fitch 2.0% TEEN APPAREL RETAILER 10. HCC Insurance Holdings 1.6% SPECIALTY 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. -------------------------------------------------------------------------------- 15 COLUMBIA ACORN INTERNATIONAL SELECT >IN A NUTSHELL [PHOTO OF TODD M. NARTER AND CHRISTOPHER J. OLSON] Columbia Acorn International Select was down 1.00% (Class A shares, without sales charge) for the quarter, slightly below the S&P/Citigroup World ex-US Cap Range $2-10B Index's negative return of 0.29%. The Fund was practically in line with the large-cap MSCI EAFE Index, which declined 1.01%. Most of these negative returns were due to a strong dollar that offset positively performing local equity markets. Year-to-date the Fund slightly underperformed the S&P/Citigroup World ex-U.S. Cap Range $2-10B, posting a 0.44% return compared to the Index's 0.79% return, and was ahead of the MSCI EAFE negative return of 1.17%. PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. Argentina's Tenaris, a manufacturer of seamless pipes used by oil and gas producers and the Fund's fourth largest holding, continued its strong performance as the stock gained a bit over 30% in the second quarter. The stock was up 65% year-to-date. High oil prices continued to drive energy exploration and investment, and tight capacity in the seamless pipe industry gave Tenaris strong pricing power. Another large holding, SES Global, had a good quarter, up 19% due to continued demand for satellite services from the switch to HDTV. The company also indicated it will launch two new satellites which will increase its capacity even further. It also reported that it will buy back 10% of its outstanding shares, which highlights its strong balance sheet and cash flow. Utilities BKW Energie in Switzerland, a new holding this quarter, and Red Electrica in Spain were strong performers as well, up 12% and 11%, respectively. Two of the Fund's weaker performers this quarter were in Japan. Funai Electronics was down 17% as margins were squeezed by hikes in raw material prices and there was increasing concern about the impact of a potentially stronger yen. After a very strong first quarter, Shimano, maker of bicycle components used by Lance Armstrong among others, gave back 15% as it guided its estimates down modestly due to a weaker European sales environment. In addition to BKW Energie, we also added two other new stocks, Gambro, which manufactures dialyzers and blood collection and separation equipment, and William Hill, a United Kingdom betting shop and internet gaming operator. /s/ Todd M. Narter /s/ Christopher J. Olson Todd M. Narter Christopher J. Olson CO-PORTFOLIO MANAGER CO-PORTFOLIO MANAGER -------------------------------------------------------------------------------- JUPITER RISING ----------------------------------- Jupiter Telecommunications, or JCOM as it's called by the locals, is the largest cable service provider in Japan. JCOM went public in March 2005, but we were familiar with it long before then. JCOM is partially owned by Liberty Global, which has been a long-term holding of the Columbia Acorn Fund. Because fewer than 10% of the households in Japan have cable TV, JCOM is growing more than 15% annually. JCOM has finished building the network and is now able to sell a "triple play" of cable TV, high-speed internet, and telephone service with very little additional investment required. -------------------------------------------------------------------------------- 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: TENARIS, 4.0%; SES GLOBAL, 3.6%; BKW ENERGIE, 1.0%; RED ELECTRICA, 2.8%; FUNAI ELECTRIC, 1.6%; SHIMANO, 2.7%; GAMBRO, 0.7%; WILLIAM HILL, 1.1%; JUPITER TELECOMMUNICATIONS, 1.9%. 1-800-922-6769 16 COLUMBIA ACORN INTERNATIONAL SELECT TICKER SYMBOL: LAFAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $71.7 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005 ------------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR 3 YEARS (10/16/2000) ------------------------------------------------------- Returns before NAV 0.44% 15.66% 15.00% 0.44% taxes POP -5.34 9.01 12.75 -0.82 -------------------------------------------------------------------------------- Returns after taxes NAV -0.03 15.29 14.91 0.36 on distributions POP -5.78 8.66 12.67 -0.90 -------------------------------------------------------------------------------- Returns after taxes NAV 0.28 10.34 12.99 0.36 on distributions and POP -3.47 6.01 11.02 -0.71 sale of fund shares -------------------------------------------------------------------------------- S&P/Citigroup World 0.79 17.64 17.54 8.94 ex-US $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, 2005 [PIE CHART] Consumer Goods/Services 20.1% Finance 15.3% Other* 10.3% Information 14.5% Energy/Minerals 6.7% Health Care 4.8% Industrial Goods/Services 28.3% * Other includes short-term obligations, cash and other assets less liabilities of 4.3%. THE VALUE OF A $10,000 INVESTMENT IN COLUMBIA ACORN INTERNATIONAL SELECT (CLASS A) -------------------------------------------------------------------------------- >October 16, 2000 through June 30, 2005 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 Adviser or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. S&P/Citigroup World ex-US $2-10B Index is 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. 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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $10,207 $9,882 $9,881 ------------------------------------------------------ WITH SALES CHARGE $9,620 $9,687 $9,881 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA ACORN COLUMBIA ACORN INTERNATIONAL INTERNATIONAL S&P/CITIGROUP SELECT - A AT SELECT - A WITH WORLD NAV SALE CHARGE EX-US CAP RANGE -------------- --------------- --------------- 10/16/00 10000 9425 10000 10344 9749 10020 9023 8504 9607 12/31/00 9684 9127 10015 9994 9420 10114 8848 8339 9716 3/31/01 7662 7222 8948 8063 7600 9587 8041 7578 9564 6/30/01 7700 7257 9220 7296 6877 8978 7143 6732 8949 9/30/01 5938 5597 7799 6313 5950 8121 6660 6277 8429 12/31/01 6859 6465 8443 6506 6132 8250 6427 6057 8404 3/31/02 6655 6272 8950 6859 6464 9131 6927 6528 9472 6/30/02 6711 6325 9130 5989 5645 8332 6097 5746 8274 9/30/02 5654 5329 7521 5642 5318 7661 5779 5447 7938 12/31/02 5819 5484 7828 5535 5217 7651 5302 4997 7527 3/31/03 5348 5040 7467 5848 5511 8201 6353 5988 8898 6/30/03 6393 6026 9200 6496 6122 9508 6774 6385 9950 9/30/03 7024 6620 10411 7547 7113 11161 7706 7263 11348 12/31/03 8212 7739 12033 8359 7879 12449 8717 8216 12842 3/31/04 8774 8269 13166 8592 8098 12787 8598 8104 12832 6/30/04 8824 8317 13281 8620 8124 12763 8614 8118 12854 9/30/04 8978 8462 13290 9240 8709 13708 9820 9256 14783 12/31/04 10162 9578 15492 10088 9508 15677 10629 10018 16415 3/31/05 10310 9717 16071 9963 9390 15561 9969 9396 15656 6/30/05 10207 9620 14973 -------------------------------------------------------------------------------- COLUMBIA ACORN INTERNATIONAL SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. Anglo Irish Bank (Ireland) 4.2% SMALL BUSINESS & MIDDLE MARKET BANKING 2. Exel (United Kingdom) 4.1% GLOBAL LOGISTICS & FREIGHT FORWARDING 3. Neopost (France) 4.0% POSTAGE METER MACHINES 4. Tenaris (Argentina) 4.0% STEEL PIPE FOR OIL WELLS & PIPELINES 5. SES Global (France) 3.6% SATELLITE BROADCASTING SERVICES 6. Kuehne & Nagel (Switzerland) 3.0% FREIGHT FORWARDING/LOGISTICS 7. Depfa Bank (Ireland) 2.9% INTERNATIONAL PUBLIC SECTOR FINANCE 8. Komercni Banka (Czech Republic) 2.9% LEADING CZECH UNIVERSAL BANK 9. Red Electrica (Spain) 2.8% SPANISH POWER GRID 10. Swatch Group (Switzerland) 2.7% WATCH & ELECTRONICS MANUFACTURER 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 ACORN SELECT >IN A NUTSHELL [PHOTO OF BEN ANDREWS] Columbia Acorn Select made up some ground from its weak first quarter. The Fund was up 5.40% (Class A share, without sales charge) in the second quarter and gained against its benchmarks. In the second quarter the S&P MidCap 400 Index was up 4.26% and the S&P 500 Index gained 1.37%. Year-to-date the Fund was down 0.27% versus the S&P 400's gain of 3.85% and the S&P 500's loss of 0.81%. PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. The Fund's biggest percentage winner for the quarter was Mine Safety Appliances (MSA), up 27% as strong demand for combat helmets from the U.S. army drove higher than expected earnings. The stock was a new purchase this quarter. MSA manufactures products designed to protect the safety and health of workers worldwide. Seven other stocks posted returns from 15% to 22% in the quarter. On the down side Harley-Davidson lost 14% in the quarter. Harley cut production and its earnings forecast and sales slowed for its heavy-weight bikes. We believe this hiccup will be overcome in the next several quarters. In addition to MSA, there were five new companies added to the portfolio during the quarter (Conseco, Nuveen Investments, Spartech, Tribune Company, and Worthington Industries) while three were sold (McAfee, Moodys, and Synopsys). We also lost a fourth company when Liberty Media International purchased United Global Communications. The combined company is now called Liberty Global and remains in the portfolio. We continue to search for the best risk/return investments for the Fund. As always, we appreciate your investment in Columbia Acorn Select. /s/Ben Andrews Ben Andrews LEAD PORTFOLIO MANAGER -------------------------------------------------------------------------------- THE GAS GRILL GOURMET ----------------------------------- Worthington Industries is a steel processor and manufacturer of metal products such as pressure cylinders (Gas grill propane tanks) and metal framing used in commercial construction. Since 2000, Worthington has improved its manufacturing processes, sold underperforming businesses and made accretive acquisitions. Recent performance has been weak, as falling steel prices have hurt short-term profits due to losses on inventory held. However, unlike the steel mills, Worthington's long-term success is tied to volume growth rather than steel prices. We like Worthington's prospects due to its strong market position, reasonable valuation and opportunity for growth as the industry adopts metal framing for residential construction. While waiting for the market to recognize its value, we continue to collect a 4% dividend. -------------------------------------------------------------------------------- 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 06/30/05, THE FUND'S POSITIONS IN THE STOCKS MENTIONED WERE: MINE SAFETY APPLIANCES, 2.6%; HARLEY-DAVIDSON, 3.4%; CONSECO, 2.6%; NUVEEN INVESTMENTS, 2.4%; SPARTECH, 0.2%; TRIBUNE COMPANY, 1.1%; WORTHINGTON INDUSTRIES, 2.1%; MCAFEE, 0.0%; MOODYS, 0.0%; SYNOPSYS, 0.0%; LIBERTY MEDIA INTERNATIONAL, 0.0%; UNITED GLOBAL COMMUNICATIONS, 0.0%; LIBERTY GLOBAL, 2.8%. 1-800-922-6769 18 COLUMBIA ACORN SELECT TICKER SYMBOL: LTFAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $1,510.5 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005 ------------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR 3 YEARS (10/16/2000) ------------------------------------------------------- Returns before NAV -0.27% 9.96% 14.05% 10.63% taxes POP -6.00 3.64 11.82 9.24 -------------------------------------------------------------------------------- Returns after taxes NAV -0.34 9.54 13.86 10.44 on distributions POP -6.07 3.24 11.64 9.06 -------------------------------------------------------------------------------- Returns after taxes NAV -0.09 7.02 12.14 9.21 on distributions and POP -3.82 2.88 10.18 7.99 sale of fund shares -------------------------------------------------------------------------------- S&P MidCap 3.85 14.03 13.16 8.05 400 (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, 2005 [PIE CHART] Information 26.3% Other* 9.4% Finance 17.1% Industrial Goods/Services 8.7% Health Care 5.0% Energy/Minerals 4.1% Consumer Goods/Services 29.4% * Other includes short-term obligations, cash and other assets less liabilities of 9.4%. THE VALUE OF A $50,000 INVESTMENT IN COLUMBIA ACORN SELECT (CLASS A) -------------------------------------------------------------------------------- >October 16, 2000 through June 30, 2005 Illustration is based on a hypothetical $50,000 investment from inception in Class A shares of the Fund, which includes the 4.50% maximum initial sales charge. Performance may reflect any voluntary waiver or reimbursement of Fund expenses by the Adviser 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 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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $80,470 $77,933 $77,894 ------------------------------------------------------ WITH SALES CHARGE $76,849 $76,933 $77,894 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA ACORN COLUMBIA SELECT SELECT - A ACORN - A WITH SALES AT NAV CHARGE S&P MIDCAP 400 --------------- -------------- -------------- 10/16/00 50000 47750 50000 54790 52324 51725 49470 47244 47820 12/31/00 53160 50768 51478 54702 52240 52626 51502 49184 49621 3/31/01 49468 47242 45934 53044 50657 51001 55940 53423 52189 6/30/01 55001 52526 51980 54473 52021 51206 51912 49576 49531 9/30/01 48715 46522 43370 49733 47495 45287 54890 52420 48656 12/31/01 57228 54653 51171 56095 53571 50905 54889 52419 50966 3/31/02 56777 54222 54611 53683 51267 54354 55191 52708 53435 6/30/02 54248 51807 49524 50814 48527 44720 52023 49682 44948 9/30/02 49609 47377 41325 52328 49973 43115 54929 52457 45611 12/31/02 52550 50185 43736 52324 49970 42459 52397 50040 41449 3/31/03 53456 51050 41797 56514 53970 44831 59531 56852 48548 6/30/03 61079 58331 49164 63987 61107 50910 66629 63631 53221 9/30/03 65157 62225 52407 67535 64496 56369 67008 63993 58330 12/31/03 68295 65221 59316 70152 66995 60603 71934 68697 62058 3/31/04 71898 68663 62318 69777 66637 60274 70915 67723 61522 6/30/04 73191 69897 62925 70007 66857 59986 69398 66275 59830 9/30/04 70918 67727 61601 73684 70368 62587 78193 74674 66311 12/31/04 80695 77064 69089 77871 74367 67327 76789 73333 69583 3/31/05 76366 72930 68810 73617 70304 66134 77180 73707 70115 6/30/05 80470 76849 72019 -------------------------------------------------------------------------------- COLUMBIA ACORN SELECT TOP 10 HOLDINGS (AS A % OF NET ASSETS) -------------------------------------------------------------------------------- 1. ITT Educational Services 5.5% POSTSECONDARY DEGREE PROGRAMS 2. Tellabs 5.1% TELECOMMUNICATIONS EQUIPMENT 3. Safeway 4.5% RETAIL FOOD & DRUG STORES 4. Abercrombie & Fitch 4.4% TEEN APPAREL RETAILER 5. Harley-Davidson 3.4% MOTORCYCLES & RELATED MERCHANDISE 6. TCF Financial 3.4% GREAT LAKES BANK 7. American Tower 3.3% COMMUNICATION TOWERS IN USA & MEXICO 8. Pride International 3.2% OFFSHORE DRILLING CONTRACTOR 9. Coach 3.1% DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 10. Liberty Global 2.8% CATV HOLDING COMPANY 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. -------------------------------------------------------------------------------- 19 COLUMBIA THERMOSTAT FUND >IN A NUTSHELL [PHOTO OF RALPH WANGER AND CHARLES P. MCQUAID] Columbia Thermostat Fund was up 2.54% (Class A shares, without sales charge) for the quarter and ended the six months up 1.37%. These returns were better than the Lipper Flexible Portfolio Funds Index and easily outperformed the S&P 500 Index, and were close to the Lehman Brothers U.S. Credit Intermediate Bond Index over the same time periods. (See page 4 for results). PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PLEASE VISIT WWW.COLUMBIAFUNDS.COM FOR DAILY AND MOST RECENT MONTH-END PERFORMANCE UPDATES. RESULTS OF THE FUNDS OWNED IN COLUMBIA THERMOSTAT FUND EQUITIES WEIGHTINGS 2ND SIX-MONTH IN QUARTER RETURNS TO CATEGORY RETURNS 6/30/05 -------------------------------------------------------------------------------- Columbia 21% 4.07% 2.78% Acorn Fund -------------------------------------------------------------------------------- Columbia 15% 5.45% -0.14% Acorn Select -------------------------------------------------------------------------------- Columbia Growth 24% -0.58% -4.32% Stock Fund -------------------------------------------------------------------------------- Columbia Growth 25% 0.61% 0.55% & Income Fund -------------------------------------------------------------------------------- Columbia Mid Cap 15% 2.78% 3.74% Value Fund -------------------------------------------------------------------------------- WEIGHTED AVERAGE EQUITY RETURN 100% 2.08% 0.16% -------------------------------------------------------------------------------- FIXED INCOME WEIGHTINGS 2ND SIX-MONTH IN QUARTER RETURNS TO CATEGORY RETURNS 6/30/05 -------------------------------------------------------------------------------- Columbia Federal 30% 3.04% 2.74% Securities Fund -------------------------------------------------------------------------------- Columbia 50% 2.65% 2.18% Intermediate Bond Fund -------------------------------------------------------------------------------- Columbia High 20% 3.02% 1.18% Yield Fund -------------------------------------------------------------------------------- Weighted Average 100% 2.84% 2.15% Income Return -------------------------------------------------------------------------------- WEIGHTED AVERAGE EQUITY RETURN 100% 2.08% 0.16% -------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND REBALANCING IN THE SECOND QUARTER -------------------------------------------------------------------------------- APRIL 14, 2005: 50% stock, 50% bond MAY 18, 2005: 45% stock, 55% bond JUNE 1, 2005: 40% stock, 60% bond -------------------------------------------------------------------------------- The first six-months of 2005 favored the Fund's small- and mid-cap stock funds, with the Columbia Mid Cap Value Fund delivering the best performance with a 3.74% return for the six-month period and 2.78% return for the quarter. Columbia Acorn Fund also contributed to performance delivering a 2.78% return year-to-date and a 4.07% return for the quarter. Despite the good performance from the small- and mid-cap funds, the equity portion was hurt by the negative year-to-date 4.32% return of Columbia Growth Stock Fund and its 0.58% loss for the quarter. Overall, Thermostat's bond portfolio, up 2.15%, outperformed the equity portion's return of 0.16%. As noted in the table below, the Fund had three reallocation triggers during the second quarter. We increased stock exposure in the portfolio in April. In May and June we increased the portfolio's bond exposure. Assets in Columbia Thermostat were just over $206 million at the end of the first half of 2005. With the Fund's third anniversary approaching on September 25, we have been pleased with the Fund's low-risk result and steady inflows. The Fund has performed as expected in the broad trading-range market we have experienced since its inception. We continue to believe Columbia Thermostat's investment strategy should keep a portion of your portfolio 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 20 COLUMBIA THERMOSTAT FUND TICKER SYMBOL: CTFAX >AT A GLANCE TOTAL NET ASSETS OF THE FUND: $206.3 MILLION PRETAX AND AFTER-TAX AVERAGE ANNUAL TOTAL RETURNS (BASED ON CLASS A SHARE RETURNS) -------------------------------------------------------------------------------- >through June 30, 2005 ---------------------------------------------------- YEAR TO LIFE OF FUND DATE* 1 YEAR (3/3/2003) ---------------------------------------------------- Returns before taxes NAV 1.37% 7.54% 14.05% POP -4.46 1.36 11.19 -------------------------------------------------------------------------------- Returns after taxes NAV 0.85 6.29 13.30 on distributions POP -4.95 0.18 10.46 -------------------------------------------------------------------------------- Returns after taxes NAV 1.03 5.09 11.70 on distributions and POP -2.77 1.06 9.23 sale of fund shares -------------------------------------------------------------------------------- S&P 500 (pretax) -0.81 6.32 18.14 -------------------------------------------------------------------------------- Lehman U.S. Credit 1.56 5.79 4.47 Intermediate Bond Index (pretax) -------------------------------------------------------------------------------- Lipper Flexible Portfolio -0.36 6.70 14.78 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. COLUMBIA THERMOSTAT FUND PORTFOLIO WEIGHTINGS -------------------------------------------------------------------------------- >as a % of assets in each investment category, as of June 30, 2005 [PIE CHART] STOCK MUTUAL FUNDS Columbia Acorn Fund 21% Columbia Acorn Select 15% Columbia Growth Stock Fund 24% 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 (CLASS A) -------------------------------------------------------------------------------- >March 3, 2003 through June 30, 2005 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 Adviser 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. 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 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. 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 AND MOST RECENT MONTH-END UPDATES. ------------------------------------------------------ CLASS A CLASS B CLASS C ------------------------------------------------------ WITHOUT SALES CHARGE $13,591 $13,380 $13,363 ------------------------------------------------------ WITH SALES CHARGE $12,810 $13,080 $13,363 ------------------------------------------------------ [MOUNTAIN CHART] COLUMBIA COLUMBIA LEHMAN U.S. LIPPER THERMOSTAT THERMOSTAT CREDIT FLEXIBLE FUND - A AT FUND - A WITH INTERMEDIATE PORTFOLIO NAV SALES CHARGE S&P 500 BOND INDEX FUNDS INDEX ----------- ------------- ------- ------------ ----------- 3/3/03 10000 9425 10000 10000 10000 3/31/03 10089 9509 10097 10021 10065 10604 9994 10929 10158 10640 11079 10442 11505 10418 11163 6/30/03 11225 10579 11651 10423 11277 11284 10636 11857 10104 11330 11512 10850 12088 10134 11562 9/30/03 11482 10822 11960 10436 11572 11868 11186 12636 10343 12027 12007 11317 12747 10374 12154 12/31/03 12308 11601 13416 10477 12643 12478 11761 13662 10561 12825 12618 11892 13852 10678 12998 3/31/04 12658 11931 13643 10773 12943 12398 11685 13429 10498 12618 12437 11722 13613 10431 12706 6/30/04 12635 11909 13878 10469 12929 12444 11729 13419 10576 12583 12514 11794 13473 10781 12643 9/30/04 12674 11945 13619 10821 12848 12885 12144 13827 10904 13024 13185 12427 14386 10808 13489 12/31/04 13408 12637 14876 10905 13845 13315 12549 14513 10936 13624 13427 12655 14819 10878 13881 3/31/05 13254 12492 14556 10777 13634 13131 12376 14280 10896 13385 13447 12674 14735 11011 13694 6/30/05 13591 12810 14756 11075 13795 -------------------------------------------------------------------------------- COLUMBIA THERMOSTAT FUND ASSET ALLOCATION -------------------------------------------------------------------------------- >as a % of net assets, as of June 30, 2005 [PIE CHART] Stock Mutual Funds 39.9% Bond Mutual Funds 59.9% Cash and other Assets less Liabilities 0.2% -------------------------------------------------------------------------------- 21 COLUMBIA ACORN FUND >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- INFORMATION Advantech (Taiwan) 7,416,000 9,300,000 American Tower 3,000,000 3,500,000 Amis Holdings 0 1,071,000 ASE Test (Taiwan) 1,410,100 2,101,700 Cnet Networks 0 1,135,000 Crown Castle International 4,000,000 4,500,000 CTS 1,626,000 1,870,000 Diebold 0 375,000 Fair Isaac 1,110,000 1,316,000 Littelfuse 785,000 915,000 Navigant Consulting 1,336,000 1,836,000 Navteq 0 500,000 Novatek Microelectronics (Taiwan) 0 2,600,000 Outdoor Channel 0 460,000 RSA Security 2,000,000 3,000,000 SSA Global Technologies 0 928,000 Tellabs 9,300,000 9,540,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Aeropostale 2,265,000 2,300,000 Ann Taylor 1,093,000 1,223,000 Chico's FAS 4,990,000 5,090,000 Coinstar 1,290,000 1,440,000 Four Seasons Hotels (Canada) 0 314,000 Genesco 700,000 775,000 Knoll 777,000 1,384,000 Paddy Power (Ireland) 0 650,000 Petco Animal Supplies 1,245,000 1,445,000 Polaris Industries 550,000 850,000 Prestige Brands 350,000 657,000 Shimano (Japan) 610,000 780,000 Speedway Motorsports 553,000 933,000 Sports Authority 1,480,000 1,520,000 Vail Resorts 1,635,000 2,110,000 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Aalberts Industrie (Netherlands) 740,000 755,000 Administaff 1,150,000 1,300,000 Carbone Lorraine (France) 200,000 260,000 Drew Industries 0 390,000 Forward Air 1,500,000 2,000,000 (INCLUDES THE EFFECT OF A 3 FOR 2 STOCK SPLIT) Gardner Denver 785,000 1,140,000 Genlyte Group 1,528,000 1,600,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Hexagon (Sweden) 30,000 120,000 (INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT) Kaydon 553,000 1,100,000 Mine Safety Appliances 1,300,000 1,440,000 Nordson 600,000 1,297,000 Quanta Services 1,700,000 2,481,000 Simpson 1,200,000 1,450,000 Spartech 3,000,000 3,150,000 Ultrapar (Brazil) 0 750,000,000 United Services Group (Netherlands) 675,000 740,000 Worthington Industries 1,050,000 1,700,000 ---------------------------------------------------------------------------- FINANCE Assurant 0 715,000 Independent Bank 152,000 252,000 Nuveen Investments 965,000 1,290,000 Paragon Group (United Kingdom) 0 1,950,000 Provident Bancorp 160,000 360,000 Scottish Re Group 1,250,000 1,500,000 United America Indemnity 700,000 1,300,000 ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 2,300,000 2,350,000 Fugro (Netherlands) 0 1,365,000 (INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT) McMoran Exploration 1,100,000 1,200,000 Pride International 2,100,000 2,300,000 Sociedad Quimica Y Minera de Chile (Chile) 32,800 275,000 Tipperary 2,265,000 2,320,000 Veritas DGC 374,000 700,000 Western Gas 3,000,000 3,200,000 1-800-922-6769 22 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ADDITIONS (CONTINUED) ---------------------------------------------------------------------------- HEALTH CARE Advanced Medical Optics 0 552,000 Arrow International 655,000 851,000 Cytokinetics 0 705,000 CYTYC 861,000 1,150,000 Datascope 0 261,000 Decode Genetics 0 1,900,000 Dendrite International 1,333,000 2,033,000 Exelixis 888,000 2,000,000 Intermagnetics General 750,000 1,180,000 Lexicon Genetics 2,000,000 3,100,000 Martek Biosciences 519,000 900,000 NPS Pharmaceuticals 776,000 1,176,000 Rigel Pharmaceuticals 0 675,000 Seattle Genetics 0 2,300,000 Serologicals 700,000 1,200,000 Tanox 0 1,500,000 ---------------------------------------------------------------------------- OTHER INDUSTRIES Diamondrock Hospitality 1,000,000 1,303,000 Gaylord Entertainment 0 475,000 Heartland Express 980,000 1,500,000 Kite Realty Group 0 717,000 SALES ---------------------------------------------------------------------------- INFORMATION 3Com 2,900,000 0 Corus Entertainment (Canada) 710,000 0 FTI Consulting 1,000,000 162,000 Global Payments 1,432,000 1,407,000 Insight Communications 2,700,000 2,430,000 International Game Technology 6,700,000 6,000,000 MAPICS 2,200,000 0 McAfee 1,448,000 0 Pericom Semiconductor 521,000 68,000 Radiant Systems 1,575,000 1,542,000 Trimble Navigation 1,200,000 1,000,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES AFC Enterprises 2,000,000 1,700,000 Amer Sports 1,110,000 0 Autogrill (Italy) 1,447,000 0 Esprit Holdings (Hong Kong) 2,250,000 0 Hunter Douglas (Netherlands) 248,000 0 Kappa Create (Japan) 388,000 366,000 Masonite International (Canada) 465,000 0 Monaco Coach 1,000,000 762,000 SCP Pool 1,989,000 1,689,000 Station Casinos 890,000 745,000 Wacoal (Japan) 1,000,000 789,000 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 SALES (CONTINUED) ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Cobham (United Kingdom) 500,000 0 Dominion Homes 572,000 0 Hub Group 304,000 0 Schulman 1,000,000 336,000 ---------------------------------------------------------------------------- FINANCE Anglo Irish Bank (Ireland) 6,657,588 6,243,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) BankFirst 19,000 0 Credito Emiliano (Italy) 1,000,000 0 Cullen Frost Bankers 370,000 0 Den Norske Bank (Norway) 2,150,000 1,670,000 FirstFed Financial 76,000 0 Midwest Bank 170,000 18,000 Stewart Information Services 340,000 0 Texas Regional Bancshares 1,190,000 0 Washington Federal 1,605,000 1,285,000 World Acceptance 1,820,000 1,700,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Equitable Resources 1,600,000 1,200,000 Hanover Compressor 1,200,000 0 Petrokazakhstan (Canada) 680,000 662,800 Quicksilver Resources 700,000 0 XTO Energy 9,000,000 5,000,000 ---------------------------------------------------------------------------- HEALTH CARE Ciphergen Biosystems 1,708,000 0 CTI Molecular Imaging 1,900,000 0 Myriad Genetics 460,000 0 SYRRX, Series C 461,000 0 VISX 1,000,000 0 ---------------------------------------------------------------------------- OTHER INDUSTRIES Allied Waste Industries 2,500,000 0 23 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 92.4% ---------------------------------------------------------------------------- INFORMATION: 21.9% SOFTWARE/SERVICES >BUSINESS SOFTWARE: 3.6% 1,900,000 Micros Systems (b) $ 85,025 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 11,500,000 Novell (b) 71,300 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 1,478,000 Kronos (b) 59,696 LABOR MANAGEMENT SOLUTIONS 847,000 Avid Technology (b) 45,128 DIGITAL NONLINEAR EDITING SOFTWARE & SYSTEMS 3,448,000 Aspect Communications (b)(c) 38,721 CALL CENTER SOFTWARE 2,000,000 MRO Software (b)(c) 29,220 ENTERPRISE MAINTENANCE SOFTWARE 1,521,000 Sybase (b) 27,910 DATABASE SOFTWARE 2,200,000 JDA Software Group (b)(c) 25,036 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 1,300,000 Witness Systems (b) 23,699 CUSTOMER EXPERIENCE MANAGEMENT SOFTWARE 6,700,000 E.Piphany (b)(c) 23,316 CRM SOFTWARE 1,542,000 Radiant Systems (b)(c) 17,579 POINT OF SALE SYSTEMS FOR CONVENIENCE STORES 460,000 Maximus 16,233 OUTSOURCER FOR LOCAL GOVERNMENT 3,000,000 Lawson Software (b) 15,450 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 5,000,000 Indus International (b)(c) 12,300 600,000 Indus International (b)(c) 1,476 ENTERPRISE ASSET MANAGEMENT SOFTWARE 6,000,000 Actuate (b)(c) 11,220 INFORMATION DELIVERY SOFTWARE & SOLUTIONS 928,000 SSA Global Technologies (b) 11,136 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 1,250,000 ClickSoftware Technologies (b) 2,338 SERVICE CHAIN OPTIMIZATION SOFTWARE ---------------------------------------------------------------------------- 516,783 >BUSINESS INFORMATION/BUSINESS SERVICES/ PUBLISHING: 1.8% 1,200,000 Getty Images (b) 89,112 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 1,316,000 Fair Isaac 48,034 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 1,836,000 Navigant Consulting (b) 32,424 FINANCIAL CONSULTING FIRM 2,685,000 InfoUSA (c) 31,415 BUSINESS DATA FOR SALES LEADS 1,395,000 Ceridian (b) 27,175 HR SERVICES & PAYMENT PROCESSING 500,000 Navteq (b) 18,590 MAP DATA FOR ELECTRONIC DEVICES 350,000 Dex Media 8,544 YELLOW PAGES PUBLISHER NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 1,700,000 PRIMEDIA (b) $ 6,885 SPECIALTY MAGAZINES & OTHER PUBLICATIONS 162,000 FTI Consulting (b) 3,386 FINANCIAL CONSULTING FIRM ---------------------------------------------------------------------------- 265,565 >TRANSACTION PROCESSORS: 1.0% 1,407,000 Global Payments 95,395 CREDIT CARD PROCESSOR 9,000,000 Hong Kong Exchanges & Clearing (Hong Kong) 23,312 HONG KONG EQUITY & DERIVATIVES OPERATOR 1,250,000 Pegasus Systems (b)(c) 13,938 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY 600,000 Cubic 10,644 REVENUE COLLECTION & DEFENSE SYSTEMS ---------------------------------------------------------------------------- 143,289 >ELECTRONICS DISTRIBUTION: 0.9% 2,325,000 Avnet (b) 52,382 ELECTRONIC COMPONENTS DISTRIBUTION 730,000 CDW 41,676 TECHNOLOGY RESELLER 680,000 Tech Data (b) 24,895 I/T DISTRIBUTOR 710,000 Agilysys 11,147 I/T DISTRIBUTOR ---------------------------------------------------------------------------- 130,100 >INTERNET: 0.8% 3,000,000 RSA Security (b) 34,440 ENTERPRISE SECURITY SOFTWARE 9,500,000 Skillsoft Publishing (b)(c) 32,775 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 2,000,000 ValueClick (b) 24,660 INTERNET ADVERTISING 1,135,000 Cnet Networks (b) 13,325 INTERNET ADVERTISING ON NICHE WEBSITES 1,400,000 DoubleClick (b) 11,746 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 1,879,808 Vital Stream, Cl. C (b) 1,352 STREAMING SERVICES FOR THE INTERNET ---------------------------------------------------------------------------- 118,298 >COMPUTER SERVICES: 0.6% 4,000,000 Bearing Point (b) 29,320 BUSINESS CONSULTING & TECHNOLOGY STRATEGY 5,000,000 Igate Capital (b)(c) 17,900 I/T & BPO OUTSOURCING SERVICES 4,600,000 AnswerThink Consulting (b)(c) 16,330 I/T INTEGRATION & BEST PRACTICE RESEARCH 2,000,000 Ciber (b) 15,960 SOFTWARE SERVICES & STAFFING 2,300,000 Analysts International (b)(c) 7,866 TECHNOLOGY STAFFING SERVICES 1,025,000 New Horizons Worldwide (b)(c) 3,587 COMPUTER TRAINING SERVICES ---------------------------------------------------------------------------- 90,963 1-800-922-6769 24 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONSUMER SOFTWARE: 0.3% 1,333,000 Activision (b) $ 22,021 ENTERTAINMENT SOFTWARE 700,000 THQ (b) 20,489 ENTERTAINMENT SOFTWARE ---------------------------------------------------------------------------- 42,510 COMPUTER RELATED HARDWARE >COMPUTER HARDWARE/RELATED SYSTEMS: 2.4% 1,525,000 Unova (b) 40,611 BARCODE & WIRELESS LAN SYSTEMS 371,900 Neopost (France) 32,686 POSTAGE METER MACHINES 1,070,000 Avocent (b) 27,970 COMPUTER CONTROL SWITCHES 660,000 Rogers (b) 26,763 PCB LAMINATES & HIGH PERFORMANCE FOAMS 1,173,000 Belden CDT 24,868 SPECIALTY CABLE 1,870,000 CTS (c) 22,982 ELECTRONIC COMPONENTS, SENSORS & EMS 9,300,000 Advantech (Taiwan) 21,919 EMBEDDED COMPUTERS 2,100,000 Symbol Technologies 20,727 MOBILE COMPUTERS & BARCODE SCANNERS 1,070,000 II VI (b) 19,677 LASER COMPONENTS 230,000 Wincor Nixdorf (Germany) 18,791 RETAIL POS SYSTEMS & ATM MACHINES 400,000 Zebra Technologies (b) 17,516 BAR CODE PRINTERS 375,000 Diebold 16,916 AUTOMATED TELLER MACHINES 625,000 Excel Technologies (b)(c) 15,188 LASER SYSTEMS & ELECTRO-OPTICAL COMPONENTS 1,875,000 SeaChange International (b)(c) 13,163 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 480,000 Applied Films (b) 12,288 THIN-FILM GLASS COATING EQUIPMENT 5,000,000 Concurrent Computer (b)(c) 10,650 VIDEO ON DEMAND SYSTEMS & SERVICES 6,800,000 Phoenixtec Power (Taiwan) 7,295 UNINTERRUPTIBLE POWER SUPPLIES ---------------------------------------------------------------------------- 350,010 >SEMICONDUCTORS/RELATED EQUIPMENT: 1.4% 1,510,000 Integrated Circuit Systems (b) 31,166 SILICON TIMING DEVICES 1,835,000 Semtech (b) 30,553 ANALOG SEMICONDUCTORS 1,905,000 IXYS (b)(c) 27,013 POWER SEMICONDUCTORS 915,000 Littelfuse (b) 25,483 LITTLE FUSES 2,000,000 Entegris (b) 19,800 SEMICONDUCTOR WAFER SHIPPING & HANDLING PRODUCTS 1,071,000 Amis Holdings (b) 14,287 ANALOG & MIXED: SIGNAL SEMICONDUCTORS NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 10,000,000 Sunplus Technology (Taiwan) $ 13,997 FABLESS SEMICONDUCTOR DESIGNER 2,101,700 ASE Test (Taiwan) (b) 13,535 SEMICONDUCTOR PACKAGING & TEST SERVICES 2,600,000 Novatek Microelectronics (Taiwan) 11,055 LCD RELATED IC DESIGNER 565,000 Supertex (b) 9,978 MIXED-SIGNAL SEMICONDUCTORS 361,000 Actel (b) 5,018 FIELD PROGRAMMABLE GATE ARRAYS 68,000 Pericom Semiconductor (b) 554 INTERFACE INTEGRATED CIRCUITS ---------------------------------------------------------------------------- 202,439 >GAMING EQUIPMENT: 1.4% 6,000,000 International Game Technology 168,900 SLOT MACHINES & PROGRESSIVE JACKPOTS 1,050,000 Shuffle Master (b) 29,432 CARD SHUFFLERS & CASINO GAMES ---------------------------------------------------------------------------- 198,332 >INSTRUMENTATION: 0.9% 1,000,000 Trimble Navigation (b) 38,970 GPS-BASED INSTRUMENTS 711,000 Dionex (b) 31,007 ION & LIQUID CHROMATOGRAPHY 600,000 Mettler Toledo (b) 27,948 LABORATORY EQUIPMENT 2,300,000 Spectris (United Kingdom) 20,346 ELECTRONIC INSTRUMENTATION & CONTROLS 428,000 Varian (b) 16,174 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- 134,445 >CONTRACT MANUFACTURING: 0.5% 1,855,000 Jabil Circuit (b) 57,004 ELECTRONIC MANUFACTURING SERVICES 1,536,000 Plexus (b) 21,857 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- 78,861 TELECOMMUNICATIONS >TELECOMMUNICATION SERVICES: 2.7% 3,000,000 Western Wireless (b) 126,900 RURAL CELLULAR PHONE SERVICES 4,500,000 Crown Castle International (b) 91,440 COMMUNICATION TOWERS 3,500,000 American Tower (b) 73,570 COMMUNICATION TOWERS IN USA & MEXICO 800,000 Commonwealth Telephone 33,528 RURAL PHONE FRANCHISES & CLEC 780,000 Telephone & Data Systems 31,832 780,000 Telephone & Data Systems, Cl. S 29,905 CELLULAR & TELEPHONE SERVICES ---------------------------------------------------------------------------- 387,175 >TELECOMMUNICATIONS EQUIPMENT: 1.2% 9,540,000 Tellabs (b) 82,998 TELECOMMUNICATIONS EQUIPMENT 2,750,000 Andrew (b) 35,090 WIRELESS INFRASTRUCTURE EQUIPMENT 25 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TELECOMMUNICATIONS EQUIPMENT--CONTINUED 960,000 Plantronics $ 34,906 COMMUNICATION HEADSETS 1,510,000 Symmetricom (b) 15,659 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- 168,653 MEDIA >TELEVISION PROGRAMMING/CATV: 1.3% 1,700,000 Liberty Global (formerly known as Liberty Media International) (b) 79,339 CATV HOLDING COMPANY 35,506 Jupiter Telecommunications (Japan) (b) 29,835 LARGEST CABLE SERVICE PROVIDER IN JAPAN 2,430,000 Insight Communications (b) 26,852 CATV FRANCHISES IN MIDWEST 2,605,000 Liberty Media (b) 26,545 CATV PROGRAMMING & MEDIA COMPANY HOLDINGS 1,250,000 Mediacom Communications (b) 8,588 CABLE TELEVISION FRANCHISES 333,000 Alliance Atlantis Communication (b) (Canada) 7,814 CATV CHANNELS, TV/MOVIE PRODUCTION/DISTRIBUTION 460,000 Outdoor Channel (b) 6,330 CABLE TELEVISION PROGRAMMING ---------------------------------------------------------------------------- 185,303 >TV/SATELLITE BROADCASTING: 0.7% 3,307,000 SES Global (France) 49,778 SATELLITE BROADCASTING SERVICES 1,750,000 Gray Television 21,105 MID MARKET AFFILIATED TV STATIONS 2,200,000 Entravision Communications (b) 17,138 SPANISH LANGUAGE TV, RADIO & OUTDOOR 270,000 Metropole TV (France) 6,840 TELEVISION BROADCASTER 200,000 Young Broadcasting (b) 830 TELEVISION STATIONS ---------------------------------------------------------------------------- 95,691 >RADIO BROADCASTING: 0.4% 1,291,000 Salem Communications (b) 25,613 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 1,200,000 Cumulus Media, Cl. A (b) 14,136 RADIO STATIONS IN SMALL CITIES 992,000 Saga Communications (b) 13,888 RADIO STATIONS IN SMALL & MID-SIZED CITIES 1,200,000 Spanish Broadcasting (b) 11,988 SPANISH LANGUAGE RADIO STATIONS ---------------------------------------------------------------------------- 65,625 ----------- INFORMATION: TOTAL 3,174,042 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 21.0% SERVICES >RETAIL: 6.8% 5,090,000 Chico's FAS (b) 174,485 WOMEN'S SPECIALTY RETAILER 3,200,000 Michaels Stores 132,384 CRAFT & HOBBY SPECIALTY RETAILER NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- 1,245,000 Abercrombie & Fitch $ 85,531 TEEN APPAREL RETAILER 2,300,000 Aeropostale (b) 77,280 MALL BASED TEEN RETAILER 3,743,000 Christopher & Banks (c) 68,347 WOMEN'S APPAREL RETAILER 1,400,000 Williams Sonoma (b) 55,398 HOME GOODS & FURNISHING RETAILER 1,520,000 Sports Authority (b)(c) 48,336 SPORTING GOODS STORES 826,000 Urban Outfitters (b) 46,826 APPAREL & HOME SPECIALTY RETAILER 1,445,000 Petco Animal Supplies (b) 42,367 PET SUPPLIES & SERVICES 1,072,000 Zale (b) 33,972 SPECIALTY RETAILER OF JEWELRY 1,300,000 Borders Group 32,903 BOOKSTORES 1,223,000 Ann Taylor (b) 29,694 WOMEN'S APPAREL RETAILER 775,000 Genesco (b) 28,745 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 230,000 Whole Foods Market 27,209 NATURAL FOOD SUPERMARKETS 1,370,000 Hot Topic (b) 26,194 MUSIC INSPIRED RETAILER OF APPAREL, ACCESSORIES & GIFTS 958,000 Brookstone (b) 18,087 SPECIALTY CONSUMER PRODUCT RETAILER 955,000 West Marine (b) 17,247 LARGEST RETAILER OF BOATING SUPPLIES 300,000 Fast Retailing (Japan) 15,557 APPAREL RETAILER 350,000 Edgars Consolidated Stores (South Africa) 15,183 LEADING RETAIL CONGLOMERATE 1,062,000 Gaiam (b)(c) 7,392 HEALTHY LIVING CATALOGS & E-COMMERCE $ 6,000 Gadzooks 5% Convertible 10/07/08 (d)(f) 0 TEEN APPAREL RETAILER ---------------------------------------------------------------------------- 983,137 >CONSUMER SERVICES: 1.7% 2,250,000 ITT Educational Services (b) 120,195 POSTSECONDARY DEGREE PROGRAMS 775,000 Weight Watchers (b) 39,998 WEIGHT LOSS PROGRAMS 1,440,000 Coinstar (b)(c) 32,674 OWNER/OPERATOR OF COIN COUNTING MACHINES 1,530,000 Central Parking 21,037 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 870,000 Park 24 (Japan) 17,186 PARKING LOT OPERATOR 1,850,000 Princeton Review (b)(c) 10,786 COLLEGE PREPARATION COURSES 2,350,000 Bally Total Fitness (b)(c) 7,614 NATIONAL CHAIN OF FITNESS CENTERS ---------------------------------------------------------------------------- 249,490 1-800-922-6769 26 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CASINOS: 1.3% 745,000 Station Casinos $ 49,468 CASINOS & RIVERBOATS 875,000 Argosy Gaming (b) 40,784 REGIONAL RIVERBOAT CASINOS 2,750,000 Alliance Gaming (b)(c) 38,555 DIVERSIFIED GAMING COMPANY 1,925,000 Pinnacle Entertainment (b) 37,653 REGIONAL RIVERBOAT CASINOS 4,500,000 Sky City Entertainment (New Zealand) 13,985 CASINO/ENTERTAINMENT COMPLEX 226,000 Lakes Entertainment (b) 3,480 NATIVE AMERICAN CASINO DEVELOPMENT ---------------------------------------------------------------------------- 183,925 >TRAVEL: 1.3% 2,110,000 Vail Resorts (b)(c) 59,291 OWNER/OPERATOR OF SKI RESORTS 1,814,500 Intrawest (Canada) 43,452 OWNER/OPERATOR OF SKI RESORTS 3,380,000 LaQuinta (b) 31,535 OWNER/FRANCHISER OF MID-PRICED HOTELS 314,000 Four Seasons Hotels (Canada) 20,755 LUXURY HOTEL OPERATOR 1,045,000 Navigant International (b)(c) 15,351 CORPORATE TRAVEL AGENCY 698,000 Jurys Doyle Hotel (Ireland) 13,088 OWNER/OPERATOR OF MID-PRICED HOTELS ---------------------------------------------------------------------------- 183,472 >ENTERTAINMENT/LEISURE PRODUCTS: 0.9% 905,000 International Speedway Motors 50,915 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 1,220,000 RC2 (b)(c) 45,835 COLLECTIBLES, TOYS & INFANT PRODUCTS 933,000 Speedway Motorsports 34,110 MOTORSPORT RACETRACK OWNER & OPERATOR 500,000 Callaway Golf 7,715 PREMIUM GOLF CLUBS & BALLS ---------------------------------------------------------------------------- 138,575 >RESTAURANTS: 0.3% 1,700,000 AFC Enterprises (c) 22,406 POPEYES RESTAURANTS 364,000 Cheesecake Factory (b) 12,642 CASUAL DINING RESTAURANTS 366,000 Kappa Create (Japan) 7,628 SUSHI CHAIN RESTAURANT OPERATOR ---------------------------------------------------------------------------- 42,676 >CRUISE LINES: 0.1% 400,000 Carnival 21,820 LARGEST CRUISE LINE ---------------------------------------------------------------------------- >GAMING: 0.1% 650,000 Paddy Power (Ireland) 11,093 IRISH BETTING SERVICES 690,000 Intralot (Greece) 10,526 LOTTERY & GAMING SYSTEMS & SERVICES ---------------------------------------------------------------------------- 21,619 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- GOODS >APPAREL: 2.4% 5,980,000 Coach (b) $ 200,749 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 844,000 Oxford Industries (c) 36,334 BRANDED & PRIVATE LABEL APPAREL 3,000,000 Billabong International (Australia) 30,993 ACTION SPORTS APPAREL BRAND MANAGER 469,000 Carter's (b) 27,380 CHILDREN'S BRANDED APPAREL 400,000 Columbia Sportswear (b) 19,756 ACTIVE OUTDOOR APPAREL, FOOTWEAR & ACCESSORIES 728,000 Steven Madden (b)(c) 12,929 WHOLESALER/RETAILER OF FASHION FOOTWEAR 789,000 Wacoal (Japan) 10,011 WOMEN'S SPECIALTY APPAREL 3,882,411 Pacific Brands (Australia) 6,669 AUSTRALIAN BRANDED APPAREL ---------------------------------------------------------------------------- 344,821 >FURNITURE/TEXTILES: 2.2% 2,200,000 HNI 112,530 OFFICE FURNITURE & FIREPLACES 765,000 Mohawk Industries (b) 63,113 CARPET & FLOORING 1,900,000 Herman Miller 58,596 OFFICE FURNITURE 2,130,000 Nobia (Sweden) 30,913 KITCHEN CABINET MANUFACTURING & DISTRIBUTION 844,000 American Woodmark (c) 25,328 KITCHEN CABINET MANUFACTURER 1,384,000 Knoll 23,680 OFFICE FURNITURE ---------------------------------------------------------------------------- 314,160 >NONDURABLES: 1.1% 895,000 Scotts Company (b) 63,733 CONSUMER LAWN & GARDEN PRODUCTS 1,689,000 SCP Pool 59,267 DISTRIBUTOR OF SWIMMING POOL SUPPLIES 630,000 Natura Cosmeticos (Brazil) 20,103 DIRECT RETAILER OF COSMETICS 657,000 Prestige Brands (b) 12,812 OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS ---------------------------------------------------------------------------- 155,915 >LEISURE VEHICLES: 1.0% 1,745,000 Harley-Davidson 86,552 MOTORCYCLES & RELATED MERCHANDISE 850,000 Polaris Industries 45,900 LEISURE VEHICLES & RELATED PRODUCTS 762,000 Monaco Coach 13,099 RECREATIONAL VEHICLES 2,850,000 Ducati Motor (Italy) (b) 3,374 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- 148,925 >FOOD & BEVERAGES: 0.9% 725,000 Orkla (Norway) 26,582 FOOD & DIVERSIFIED CONSUMER GOODS 27 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FOOD & BEVERAGES--CONTINUED 1,000,000 Kerry (Ireland) $ 24,662 FOOD INGREDIENTS 850,000 NBTY (b) 22,049 VITAMINS & SUPPLEMENTS 30,000,000 Global Bio-Chem Technology Group (China) 18,578 1,700,000 Global Bio-Chem Technology Group Warrants (China) 28 REFINER OF CORN-BASED COMMODITIES 3,000,000 Lion Nathan (Australia) 17,247 BEER BREWER/DISTRIBUTOR 1,800,000 Davide Campari (Italy) 13,152 SPIRITS & WINE 900,000 IAWS (Ireland) 12,574 BAKED GOODS ---------------------------------------------------------------------------- 134,872 >DURABLE GOODS: 0.9% 1,316,000 Helen of Troy (b) 33,505 HAIRDRYERS & CURLING IRONS 465,000 Hyundai Mobis (South Korea) 31,116 AUTO PARTS 10,000,000 Techtronic Industries (Hong Kong) 25,191 POWER TOOLS & MOTORIZED APPLIANCES 780,000 Shimano (Japan) 22,133 BICYCLE COMPONENTS & FISHING TACKLE 133,000 Funai Electric (Japan) 13,599 CONSUMER ELECTRONICS ---------------------------------------------------------------------------- 125,544 ----------- CONSUMER GOODS/SERVICES: TOTAL 3,048,951 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 15.4% >MACHINERY: 2.5% 1,050,000 Esco Technologies (b)(c) 105,840 FILTRATION & TEST EQUIPMENT 2,250,000 Ametek 94,162 AEROSPACE/INDUSTRIAL INSTRUMENTS 1,297,000 Nordson 44,461 DISPENSING SYSTEMS FOR ADHESIVES & COATINGS 1,140,000 Gardner Denver (b)(c) 39,991 AIR COMPRESSORS, BLOWERS & PUMPS 840,000 Pentair 35,960 PUMPS, WATER TREATMENT & TOOLS 1,100,000 Kaydon 30,635 SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS 106,000 Oshkosh Truck 8,298 SPECIALTY TRUCK MANUFACTURER 150,000 Tennant 5,312 NON-RESIDENTIAL FLOOR CLEANING EQUIPMENT ---------------------------------------------------------------------------- 364,659 >INDUSTRIAL GOODS: 2.2% 3,200,000 Clarcor (c) 93,600 MOBILE & INDUSTRIAL FILTERS 1,600,000 Genlyte Group (b)(c) 77,984 COMMERCIAL LIGHTING FIXTURES 1,440,000 Mine Safety Appliances 66,528 SAFETY EQUIPMENT NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 2,000,000 Donaldson $ 60,660 INDUSTRIAL AIR FILTRATION 390,000 Drew Industries (b) 17,706 RV & MFG HOME COMPONENTS 3,000,000 Electric City (b)(c) 2,760 ELECTRICITY CONSERVATION DEVICES ---------------------------------------------------------------------------- 319,238 >LOGISTICS: 2.0% 2,750,000 Expeditors International of Washington 136,978 INTERNATIONAL FREIGHT FORWARDER 900,000 UTI Worldwide 62,658 GLOBAL LOGISTICS & FREIGHT FORWARDING 2,000,000 Forward Air (c) 56,540 FREIGHT TRANSPORTATION BETWEEN AIRPORTS 2,600,000 Exel (United Kingdom) 39,359 GLOBAL LOGISTICS & FREIGHT FORWARDING ---------------------------------------------------------------------------- 295,535 >INDUSTRIAL DISTRIBUTION: 1.9% 2,286,000 Watsco (c) 97,384 HVAC DISTRIBUTION 1,925,000 Airgas 47,490 INDUSTRIAL GAS DISTRIBUTOR 3,800,000 Grafton Group (Ireland) (b) 43,973 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 1,200,000 Hughes Supply 33,720 INDUSTRIAL DISTRIBUTION 1,031,000 Nuco2 (b)(c) 26,466 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS 600,000 Aviall (b) 18,954 AIRCRAFT REPLACEMENT PARTS DISTRIBUTOR ---------------------------------------------------------------------------- 267,987 >CONSTRUCTION: 1.3% 738,000 Florida Rock Industries 54,132 CONCRETE & AGGREGATES 1,450,000 Simpson 44,298 WALL JOINT MAKER 787,500 Wienerberger (Austria) 36,494 BRICKS & CLAY ROOFING TILES 42,500 Geberit International (Switzerland) 27,119 PLUMBING SUPPLIES 380,000 Daito Trust Construction (Japan) 14,190 APARTMENT BUILDER 3,000,000 Consorcio (Mexico) 10,358 AFFORDABLE HOUSING BUILDER ---------------------------------------------------------------------------- 186,591 >STEEL: 1.2% 2,850,000 Gibraltar Industries (c) 52,839 STEEL PROCESSING 600,000 Tenaris (Argentina) 46,962 STEEL PIPE FOR OIL WELLS & PIPELINES 158,000 Vallourec (France) 45,368 SEAMLESS TUBES 1,700,000 Worthington Industries 26,860 STEEL PROCESSING ---------------------------------------------------------------------------- 172,029 1-800-922-6769 28 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >OUTSOURCING SERVICES & TRAINING: 1.1% 1,800,000 Labor Ready (b) $ 41,958 TEMPORARY MANUAL LABOR 1,300,000 Administaff (c) 30,888 PROFESSIONAL EMPLOYER ORGANIZATION 635,000 Bilfinger Berger (Germany) 29,560 CONSTRUCTION & RELATED SERVICES 2,481,000 Quanta Services (b) 21,833 ELECTRICAL & TELECOM CONSTRUCTION SERVICES 740,000 United Services Group (Netherlands) 19,528 TEMPORARY STAFFING SERVICES 565,000 Meitec (Japan) 17,341 STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS 600,000 GP Strategies (b) 4,884 TRAINING PROGRAMS ---------------------------------------------------------------------------- 165,992 >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 1.1% 3,150,000 Spartech (c) 56,070 PLASTICS DISTRIBUTION & COMPOUNDING 450,000 Novozymes (Denmark) 22,233 INDUSTRIAL ENZYMES 35,000 Sika (Switzerland) (b) 21,784 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 200,000 Imerys (France) 13,748 INDUSTRIAL MINERALS PRODUCER 750,000,000 Ultrapar (Brazil) 13,111 SPECIALTY CHEMICALS & LIQUID PROPANE GAS DISTRIBUTION 260,000 Carbone Lorraine (France) 12,337 ADVANCED INDUSTRIAL MATERIALS 20,000 Givaudan (Switzerland) 11,600 INDUSTRIAL FRAGRANCES & FLAVORS 336,000 Schulman 6,011 PLASTICS DISTRIBUTION & COMPOUNDING ---------------------------------------------------------------------------- 156,894 >WATER: 1.1% 856,000 Cuno (b) 61,153 FILTRATION & FLUIDS CLARIFICATION 3,000,000 Tetra Tech (b)(c) 40,590 RESOURCE MANAGEMENT & INFRASTRUCTURE CONSULTING 1,080,000 Pall 32,789 FILTRATION & FLUIDS CLARIFICATION 554,000 Watts Water Technologies 18,553 WATER, VALVES, REGULATORS & FILTRATION ---------------------------------------------------------------------------- 153,085 >OTHER INDUSTRIAL SERVICES: 0.5% 825,000 Mobile Mini (b)(c) 28,446 LEASES PORTABLE STORAGE UNITS 1,500,000 Clark (c) 21,495 EXECUTIVE COMPENSATION & BENEFITS CONSULTING 35,000 Schindler (Switzerland) 12,598 ELEVATOR MANUFACTURER & SERVICE PROVIDER 300,000 IMTech (Netherlands) 10,484 TECHNICAL ENGINEERING 185,000 Jaakko Poyry (Finland) 5,538 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY ---------------------------------------------------------------------------- 78,561 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONGLOMERATES: 0.4% 755,000 Aalberts Industrie (Netherlands) $ 34,500 FLOW CONTROL & HEAT TREATMENT 5,550 Pargesa (Switzerland) 20,226 INDUSTRIAL & MEDIA HOLDINGS 120,000 Hexagon (Sweden) 2,422 MEASUREMENT EQUIPMENT & POLYMERS ---------------------------------------------------------------------------- 57,148 >ELECTRICAL COMPONENTS: 0.1% 1,125,000 Ushio (Japan) 19,937 INDUSTRIAL LIGHT SOURCES ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 2,237,656 ---------------------------------------------------------------------------- FINANCE: 12.1% >BANKS: 4.6% 2,712,000 Associated Banc-Corp 91,286 MIDWEST BANK 3,502,000 TCF Financial 90,632 GREAT LAKES BANK 1,958,000 BOK Financial 90,303 SOUTHWEST MIDDLE MARKET BANK 6,243,000 Anglo Irish Bank (Ireland) 77,328 SMALL BUSINESS & MIDDLE MARKET BANKING 2,734,000 Glacier Bancorp (c) 71,439 MOUNTAIN STATES BANK 1,320,000 West Coast Bancorp (c) 32,221 PORTLAND SMALL BUSINESS LENDER 250,000 Komercni Banka (Czech Republic) 31,314 LEADING CZECH UNIVERSAL BANK 1,850,000 Depfa Bank (Ireland) 29,563 INTERNATIONAL PUBLIC SECTOR FINANCE 1,516,000 Republic 22,710 MICHIGAN BANK 756,000 Chittenden 20,563 VERMONT & WESTERN MASSACHUSETTS BANK 640,000 Great Southern Bancorp 20,026 MISSOURI REAL ESTATE LENDER 1,670,000 Den Norske Bank (Norway) 17,305 LARGEST NORWEGIAN BANK 510,000 CityBank Lynnwood (c) 15,820 SEATTLE REAL ESTATE LENDER 551,000 West Bancorporation 10,359 DES MOINES COMMERCIAL BANK 256,000 First Financial BankShares 8,663 WEST TEXAS BANK 336,000 Sterling Bancorp 7,174 NEW YORK CITY NICHE LENDER 252,000 Independent Bank 7,167 MICHIGAN BANK 382,000 Cascade Financial 6,303 SEATTLE COMMUNITY BANK 242,000 First Mutual Bancshares 6,268 SEATTLE COMMUNITY BANK 200,000 S Y Bancorp 4,570 LOUISVILLE BANK 29 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BANKS--CONTINUED 18,000 Midwest Bank $ 347 CHICAGO BANK ---------------------------------------------------------------------------- 661,361 >INSURANCE: 2.7% 575,000 Philadelphia Consolidated Holding (b) 48,737 SPECIALTY INSURANCE 1,169,000 Leucadia National 45,158 INSURANCE HOLDING COMPANY 995,000 Protective Life 42,009 LIFE INSURANCE 1,020,000 HCC Insurance Holdings 38,627 SPECIALTY INSURANCE 109,000 Markel (b) 36,951 SPECIALTY INSURANCE 1,500,000 Scottish Re Group 36,360 LIFE REINSURANCE 710,000 Selective Insurance Group 35,181 COMMERCIAL & PERSONAL LINES INSURANCE 715,000 Assurant 25,811 SPECIALTY INSURANCE 570,000 RLI 25,422 SPECIALTY INSURANCE 1,300,000 United America Indemnity (b) 22,347 SPECIALTY INSURANCE 560,000 Endurance Specialty Holdings 21,179 COMMERCIAL LINES INSURANCE/REINSURANCE 210,000 StanCorp Financial 16,082 GROUP LIFE & DISABILITY INSURANCE ---------------------------------------------------------------------------- 393,864 >FINANCE COMPANIES: 1.7% 5,831,000 AmeriCredit (b) 148,690 AUTO LENDING 1,700,000 World Acceptance (b)(c) 51,085 PERSONAL LOANS 1,100,000 Intermediate Capital (United Kingdom) 20,527 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 1,000,000 Northgate (United Kingdom) 16,181 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 1,950,000 Paragon Group (United Kingdom) 14,755 UK BUY-TO-LET FINANCE COMPANY ---------------------------------------------------------------------------- 251,238 >SAVINGS & LOANS: 1.7% 4,081,000 Peoples Bank Bridgeport 123,409 CONNECTICUT SAVINGS & LOAN 1,178,000 Anchor Bancorp Wisconsin (c) 35,646 WISCONSIN THRIFT 1,700,000 Housing Development Finance (India) 34,510 PREMIER MORTGAGE LENDER IN INDIA 1,285,000 Washington Federal 30,223 OLD FASHIONED THRIFT 200,000 Bankinter (Spain) 10,197 MORTGAGE LENDER 360,000 Provident Bancorp 4,360 NEW YORK STATE THRIFT ---------------------------------------------------------------------------- 238,345 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >MONEY MANAGEMENT: 1.3% 2,355,000 SEI Investments $ 87,959 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT 2,390,000 Eaton Vance 57,145 SPECIALTY MUTUAL FUNDS 1,290,000 Nuveen Investments 48,530 SPECIALTY MUTUAL FUNDS ---------------------------------------------------------------------------- 193,634 >BROKERAGE: 0.1% 690,000 Investment Technology Group (b) 14,504 ELECTRONIC TRADING ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 1,752,946 ---------------------------------------------------------------------------- ENERGY/MINERALS: 9.4% >OIL/GAS PRODUCERS: 5.0% 5,000,000 XTO Energy 169,950 NATURAL GAS PRODUCER 3,000,000 Talisman Energy (Canada) 112,198 OIL & GAS PRODUCER 3,200,000 Western Gas 111,680 OIL PRODUCER & COAL SEAM GAS PRODUCER 3,400,000 Ultra Petroleum (b) 103,224 NATURAL GAS PRODUCER 15,400,000 Tullow Oil (United Kingdom) 51,333 OIL & GAS PRODUCER 1,000,000 Southwestern Energy (b) 46,980 NATURAL GAS PRODUCER 700,000 Denbury Resources (b) 27,839 OIL PRODUCER USING CO2 INJECTION 1,000,000 Range Resources 26,900 OIL & GAS PRODUCER 662,800 Petrokazakhstan (Canada) 24,245 OIL PRODUCER & REFINER IN KAZAKHSTAN 1,200,000 McMoran Exploration (b) 23,412 NATURAL GAS PRODUCERS & LNG DEVELOPER 2,320,000 Tipperary (b)(c) 14,500 COAL SEAM GAS PRODUCER 3,200,000 Vaalco Energy (b)(c) 11,072 OIL & GAS PRODUCER ---------------------------------------------------------------------------- 723,333 >OIL SERVICES: 2.7% 2,350,000 FMC Technologies (b) 75,130 OIL & GAS WELL HEAD MANUFACTURER 2,300,000 Pride International (b) 59,110 OFFSHORE DRILLING CONTRACTOR 500,000 Carbo Ceramics 39,480 NATURAL GAS WELL STIMULANTS 5,000,000 Newpark Resources (b)(c) 37,500 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 1,600,000 Chicago Bridge & Iron 36,576 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 1,365,000 Fugro (Netherlands) 33,877 SURVEY & GPS SERVICES 2,400,000 Key Energy Services (b) 29,040 OIL & GAS WELL WORKOVER SERVICES 1-800-922-6769 30 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >OIL SERVICES--CONTINUED 1,350,000 Enerflex Systems (Canada) (c) $ 27,719 NATURAL GAS COMPRESSOR 2,000,000 Saipem (Italy) 26,856 OFFSHORE CONSTRUCTION & DRILLING 700,000 Veritas DGC (b) 19,418 GEOPHYSICAL CONTRACTOR 168,000 Pioneer Drilling (b) 2,564 OIL & GAS WELL DRILLER ---------------------------------------------------------------------------- 387,270 >DISTRIBUTION/MARKETING/REFINING: 1.2% 1,200,000 Equitable Resources 81,600 NATURAL GAS PRODUCER & UTILITY 1,900,000 Oneok 62,035 NATURAL GAS UTILITY, MARKETING & PROCESSING 1,206,000 Atmos Energy 34,733 NATURAL GAS UTILITY ---------------------------------------------------------------------------- 178,368 >MINING: 0.5% 1,440,000 Xstrata (United Kingdom) 27,666 DIVERSIFIED MINING HOLDING COMPANY 275,000 Sociedad Quimica Y Minera de Chile (Chile) 27,500 PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM & IODINE 900,000 Noranda (Canada) 15,414 DIVERSIFIED MINING HOLDING COMPANY 1,000,000 Ivanhoe Mines (Canada) (b) 7,757 COPPER MINING IN MONGOLIA ---------------------------------------------------------------------------- 78,337 ----------- ENERGY/MINERALS: TOTAL 1,367,308 ---------------------------------------------------------------------------- HEALTH CARE: 8.6% >SERVICES: 2.9% 2,491,000 Lincare Holdings (b) 101,732 HOME HEALTH CARE SERVICES 1,370,000 Charles River Laboratories (b) 66,102 PHARMACEUTICAL RESEARCH 821,000 Coventry Health Care (b) 58,086 PPO NETWORK 2,592,000 NDCHealth Group (c) 46,578 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 3,470,000 Gambro (Sweden) 46,304 PRODUCTS & SERVICES FOR RENAL CARE 510,000 OPG Groep (Netherlands) 35,513 HEALTHCARE SUPPLIES & PHARMACIES 2,033,000 Dendrite International (b) 28,055 SOFTWARE FOR PHARMACEUTICAL SALES FORCE 1,200,000 Serologicals (b) 25,500 BLOOD COLLECTION & ANTIBODY PRODUCTION 236,000 Omega Pharma (Belgium) 12,184 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 440,000 Medquist (b) 5,852 MEDICAL TRANSCRIPTION SERVICES ---------------------------------------------------------------------------- 425,906 >MEDICAL EQUIPMENT/LABORATORY SUPPLIES: 2.7% 1,629,000 Edwards Lifesciences (b) 70,080 HEART VALVES NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 1,240,000 Diagnostic Products $ 58,689 IMMUNODIAGNOSTIC KITS 1,180,000 Intermagnetics General (b) 36,297 MRI EQUIPMENT 851,000 Arrow International 27,147 DISPOSABLE CATHETERS 1,150,000 CYTYC (b) 25,369 CONSUMABLES RELATED TO WOMEN'S HEALTH 583,000 Orthofix International (b) 25,092 BONE FIXATION & STIMULATION DEVICES 365,000 Essilor International (France) 24,838 EYEGLASS LENSES 714,000 ICU Medical (b)(c) 22,969 INTRAVENOUS THERAPY PRODUCTS 552,000 Advanced Medical Optics (b) 21,942 MEDICAL DEVICES FOR EYE CARE 875,000 Viasys Healthcare (b) 19,766 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 390,000 Hogy Medical (Japan) 17,395 DISPOSABLE SURGICAL PRODUCTS 350,000 Haemonetics (b) 14,224 BLOOD & PLASMA COLLECTION EQUIPMENT 125,000 Synthes (Switzerland) 13,679 PRODUCTS FOR ORTHOPEDIC SURGERY 261,000 Datascope 8,704 MEDICAL DEVICES ---------------------------------------------------------------------------- 386,191 >BIOTECHNOLOGY/DRUG DELIVERY: 2.2% 880,000 Neurocrine Biosciences (b) 37,013 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 900,000 Martek Biosciences (b) 34,155 FATTY ACIDS FOR BABY FORMULA & OTHER FOODS 1,350,000 DOV Pharmaceutical (b)(c) 25,191 DRUGS FOR INSOMNIA, ANXIETY, PAIN & DEPRESSION 2,400,000 Pozen (b)(c) 19,680 DRUGS FOR MIGRAINES 1,179,000 AtheroGenics (b) 18,840 DRUGS FOR ATHEROSCLEROSIS 1,900,000 Decode Genetics (b) 17,841 DRUGS FOR HEART ATTACK, ASTHMA & VASCULAR DISEASE 1,055,000 Nektar Therapeutics (b) 17,766 DRUG DELIVERY TECHNOLOGIES 1,500,000 Tanox (b) 17,580 DRUGS FOR ASTHMA & HIV 2,000,000 Medarex (b) 16,660 HUMANIZED ANTIBODIES 3,100,000 Lexicon Genetics (b) 15,314 DRUG DISCOVERY 2,000,000 Exelixis (b) 14,860 TREATMENTS FOR CANCER & METABOLIC DISORDERS 675,000 Rigel Pharmaceuticals (b) 13,446 DRUGS FOR HAY FEVER, ASTHMA, HEPATITIS & CANCER 1,176,000 NPS Pharmaceuticals (b) 13,348 DRUGS FOR OSTEOPOROSIS & HYPERPARATHYROIDISM 2,300,000 Seattle Genetics (b)(c) 12,328 ANTIBODY-BASED THERAPIES FOR CANCER 1,200,000 Ligand Pharmaceuticals (b) 8,340 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 865,000 Arena Pharmaceuticals (b) 5,899 NOVEL DRUG TARGETING TECHNOLOGY 31 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY--CONTINUED 705,000 Cytokinetics (b) $ 4,900 DRUGS FOR CANCER & HEART FAILURE 5,500,000 La Jolla Pharmaceutical (b)(c) 4,510 LUPUS TREATMENT 635,000 Maxygen (b) 4,356 MOLECULAR BREEDING 1,875,000 Locus Discovery, Series D, Pfd. (d)(f) 3,750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 638,000 Diversa (b) 3,324 MOLECULAR BREEDING 1,249,999 Perlegen Sciences (d)(f) 2,632 LARGE SCALE GENE SEQUENCING 359,944 Microdose (d)(f) 270 DRUG INHALERS ---------------------------------------------------------------------------- 312,003 >MEDICAL SUPPLIES: 0.4% 686,000 Techne (b) 31,494 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES 650,000 Owens & Minor 21,028 DISTRIBUTION OF MEDICAL SUPPLIES ---------------------------------------------------------------------------- 52,522 >HOSPITAL MANAGEMENT: 0.2% 500,000 Rhoen-Klinikum (Germany) 34,626 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- >PHARMACEUTICALS: 0.2% 500,000 Par Pharmaceuticals (b) 15,905 GENERICS 3,495,000 United Drug (Ireland) 14,996 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER ---------------------------------------------------------------------------- 30,901 ----------- HEALTH CARE: TOTAL 1,242,149 ---------------------------------------------------------------------------- OTHER INDUSTRIES: 4.0% >REAL ESTATE: 2.6% 1,320,000 General Growth Properties 54,239 REGIONAL SHOPPING MALLS 699,000 Forest City Enterprises, Cl. B 49,112 COMMERCIAL & RESIDENTIAL PROPERTY DEVELOPER 635,000 Macerich Company 42,577 REGIONAL SHOPPING MALLS 650,000 SL Green Realty 41,925 MANHATTAN OFFICE BUILDINGS 620,000 Mills 37,690 REGIONAL SHOPPING MALLS 575,000 Federal Realty Investment Trust 33,925 SHOPPING CENTERS 2,552,000 Highland Hospitality (c) 26,668 HOTEL REAL ESTATE INVESTMENT TRUST 1,375,000 Crescent Real Estate Equities 25,781 CLASS A OFFICE BUILDINGS 475,000 Gaylord Entertainment (b) 22,083 CONVENTION HOTELS NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- 1,355,000 Sponda (Finland) $ 13,928 OFFICE & WAREHOUSE PROPERTY COMPANY 1,000,000 Diamondrock Hospitality 144A (b)(d) 11,300 303,000 Diamondrock Hospitality 3,424 HOTEL REAL ESTATE INVESTMENT TRUST 717,000 Kite Realty Group 10,755 COMMUNITY SHOPPING CENTERS 37,407 Security Capital European Realty (Luxembourg) (d)(f) 527 SELF STORAGE PROPERTIES ---------------------------------------------------------------------------- 373,934 >TRANSPORTATION: 0.6% 1,500,000 Heartland Express 29,145 REGIONAL TRUCKER 720,000 Grupo Aeroportaurio Del Sureste (Mexico) 22,932 CANCUN & COZUMEL AIRPORT OPERATOR 18,000,000 Comfort Del Gro (Singapore) 17,993 TAXI & MASS TRANSIT SERVICE 70,000 Kobenhavns Lufthavne (Denmark) 16,569 COPENHAGEN AIRPORT AUTHORITY ---------------------------------------------------------------------------- 86,639 >REGULATED UTILITIES: 0.4% 1,650,000 Northeast Utilities 34,419 REGULATED ELECTRIC UTILITY 989,800 Red Electrica (Spain) 27,320 SPANISH POWER GRID ---------------------------------------------------------------------------- 61,739 >WASTE MANAGEMENT: 0.4% 1,500,000 Waste Connections (b) 55,935 SOLID WASTE MANAGEMENT ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES TOTAL 578,247 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 92.4% 13,401,299 (COST: $7,966,904) SHORT-TERM OBLIGATIONS: 7.6% $ 125,000 Aluminum Company America 3.08% - 3.24% Due 7/12/05 - 8/3/05 124,790 107,000 Toyota Motor Credit 3.04% - 3.21% Due 7/13/05 - 8/4/05 106,831 99,000 SBC Communications 3.10% - 3.14% Due 7/7/05 - 7/26/05 98,859 85,000 HSBC Finance Corp 3.23% - 3.25% Due 8/5/05 - 8/10/05 84,713 78,000 Verizon Network 2.74% Due 4/26/05 77,840 73,000 General Electric Capital Services 3.08% - 3.20% - Due 7/21/05 - 8/01/25 72,846 1-800-922-6769 32 PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS--CONTINUED $ 63,000 American General Finance 3.13% - 3.26% Due 7/19/05 - 8/9/05 $ 62,846 62,000 Hewlett Packard 3.14% - 3.16% - Due 7/27/05 - 7/28/05 61,856 45,000 American Express Credit 3.06% Due 7/11/05 44,962 45,000 Prudential Funding 3.09% Due 7/22/05 44,919 45,000 LaSalle Bank 3.14% Due 7/25/05 44,906 45,000 Verizon Global Funding 3.21% - Due 8/2/05 44,872 43,000 Marshall + Ilsley 3.17% Due 7/29/05 42,894 40,000 Campbell Soup Company 3.04% Due 7/8/05 39,976 35,000 General Electric Capital Corporate 3.01% Due 7/1/05 35,000 35,000 Eaton Company 3.03% Due 7/6/05 34,985 35,000 Countrywide Funding 3.29% Due 8/11/05 34,869 34,000 AIG Funding 3.11% - Due 7/18/05 33,950 6,597 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $6,733 (repurchase proceeds: $6,598) 6,597 ---------------------------------------------------------------------------- (AMORTIZED COST: $1,098,511) 1,098,511 ----------- TOTAL INVESTMENTS: 100.0% 14,499,810 (COST: $9,065,415)(a) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% 2,997 ----------- TOTAL NET ASSETS: 100% $14,502,807 ============================================================================ 33 COLUMBIA ACORN FUND >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED -------------------------------------------------------------------------------- >Notes to Statement of Investments (in thousands) (a) At June 30, 2005, for federal income tax purposes cost of investments was $9,065,415 and net unrealized appreciation was $5,434,395 consisting of gross unrealized appreciation of $5,840,365 and gross unrealized depreciation of $405,970. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: AnswerThink Consulting 10.71% Christopher & Banks 10.46 Spartech 9.87 New Horizons Worldwide 9.80 Indus International 9.75 Actuate 9.66 Gibraltar Industries 9.59 Igate Capital 9.51 Analysts International 9.27 World Acceptance 9.07 West Coast Bancorp 8.91 Skillsoft Publishing 8.89 Glacier Bancorp 8.75 E.Piphany 8.63 Watsco 8.32 Pozen 8.29 Esco Technologies 8.26 Clark 8.15 MRO Software 7.90 Concurrent Computer 7.85 JDA Software Group 7.56 La Jolla Pharmaceutical 7.44 NDCHealth Group 7.18 Electric City 7.17 Gaiam 7.16 Bally Total Fitness 6.89 Nuco2 6.79 Navigant International 6.74 Princeton Review 6.71 SeaChange International 6.60 Highland Hospitality 6.37 Clarcor 6.20 Forward Air 6.18% Pegasus Systems 6.03 Enerflex Systems 6.00 Newpark Resources 5.93 RC2 5.93 DOV Pharmaceutical 5.93 Sports Authority 5.86 AFC Enterprises 5.78 Genlyte Group 5.76 IXYS 5.71 Vaalco Energy 5.69 Coinstar 5.66 Gardner Denver 5.66 Aspect Communications 5.62 Tipperary 5.60 Steven Madden 5.60 Mobile Mini 5.57 Seattle Genetics 5.45 Alliance Gaming 5.38 Tetra Tech 5.29 Radiant Systems 5.28 Excel Technologies 5.18 Anchor Bancorp Wisconsin 5.18 ICU Medical 5.16 American Woodmark 5.11 Administaff 5.09 CTS 5.08 CityBank Lynnwood 5.06 Vail Resorts 5.01 Oxford Industries 5.00 InfoUSA 5.00 The aggregate cost and value of these companies at June 30, 2005, was $1,549,261 and $1,988,672, respectively. Investments in affiliate companies represent 13.7% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005 were as follows: Dividend Income $ 14,830 Net realized gain or loss $ 1,653 Change in unrealized gain or loss $ (41,103) Purchases $ 156,956 Proceeds from sales $ 18,992 1-800-922-6769 34 (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. At June 30, 2005, these securities were illiquid. At June 30, 2005, these securities (in thousands) amounted to $18,479, which represents 0.13% of total net assets. Additional information on these securities is as follows:
ACQUISITION SHARES/ SECURITY DATES PAR (000) COST (000) VALUE (000) ---------------------------------------------------------------------------------------- Diamondrock Hospitality 06/29/04 1,000,000 $ 10,000 $11,300 Gadzooks 5% Convertible 10/07/08 10/08/03 $ 6,000 6,000 0 Locus Discovery, Series D, Pfd. 09/05/01 1,875,000 7,500 3,750 Microdose 11/24/00 359,944 2,005 270 Perlegen Sciences 03/30/01 1,249,999 4,500 2,632 Security Capital European Realty (Luxembourg) 08/20/98-11/12/99 37,407 748 527 ---------- ------- $ 30,753 $18,479 ========== =======
(e) On June 30, 2005, the market value of foreign securities (in thousands) represents 14.95% of total net assets. The Fund's foreign portfolio was diversified as follows: VALUE PERCENT =============================================== Canada $ 259,354 1.79% Ireland 227,277 1.57 United Kingdom 190,167 1.31 France 185,595 1.28 Japan 184,812 1.27 Netherlands 133,902 0.92 Switzerland 107,006 0.74 Germany 82,977 0.57 Sweden 79,639 0.55 Taiwan 67,801 0.47 Australia 54,909 0.38 Hong Kong 48,503 0.33 Argentina 46,962 0.32 Norway 43,887 0.30 Italy 43,382 0.30 Denmark 38,802 0.27 VALUE PERCENT =============================================== Spain $ 37,517 0.26% Austria 36,494 0.25 India 34,510 0.24 Mexico 33,290 0.23 Brazil 33,214 0.23 Czech Republic 31,314 0.22 South Korea 31,116 0.22 Chile 27,500 0.19 Finland 19,466 0.13 China 18,606 0.13 Singapore 17,993 0.12 South Africa 15,183 0.11 New Zealand 13,985 0.10 Belgium 12,184 0.08 Greece 10,526 0.07 Luxembourg 527 0.00 ---------- ----- Total Foreign Portfolio $2,168,400 14.95% ========== ===== (f) Represents fair value as determined in good faith under procedures approved by the Board of Trustees. 35 COLUMBIA ACORN INTERNATIONAL >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Bloomsbury Publishing 0 911,000 Expro International 2,600,000 2,840,000 IAWS (Ireland) 1,400,000 1,425,000 Kensington 1,650,000 1,700,000 Paddy Power (Ireland) 0 600,000 Paragon Group 1,600,000 2,800,000 Ulster Television 223,000 1,281,000 United Drug (Ireland) 4,300,000 4,825,000 William Hill 0 1,200,000 Workspace Group 2,100,000 2,450,000 >FRANCE April Group 400,000 492,000 Iliad 279,500 390,000 Imerys 300,000 360,000 Metropole TV 360,000 450,000 Rubis 0 31,000 >GERMANY Bilfinger Berger 300,000 445,000 CTS Eventim 0 77,000 GFK 350,000 415,000 Grenke Grenkeleasing 160,000 203,000 Wincor Nixdorf 225,000 275,000 >NETHERLANDS Aalberts Industrie 540,000 550,000 Fugro 1,115,200 1,245,000 (INCLUDES THE EFFECT OF A 4 FOR 1 STOCK SPLIT) Sligro Food Group 340,000 400,000 Smit International 0 289,000 United Services Group 620,000 684,000 >SWITZERLAND BKW Energie 0 119,000 (INCLUDES THE EFFECT OF A 10 FOR 1 STOCK SPLIT) Kuehne & Nagel 85,000 95,000 >SWEDEN Gambro 470,000 762,000 Hexagon 1,194,000 1,230,000 (INCLUDES THE EFFECT OF A 3 FOR 1 STOCK SPLIT) >RUSSIAN FEDERATION Mechel Steel Group 260,000 370,000 RBC Information Systems 0 700,000 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- ASIA >JAPAN Ito En 142,000 301,000 Sato 88,800 450,000 Shimano 250,000 450,000 Ushio 550,000 750,000 >TAIWAN Advantech 4,978,000 6,500,000 ASE Test 1,245,100 1,772,600 Novatek Microelectronics 0 1,800,000 >INDIA Housing Development Finance 1,300,000 1,329,000 ---------------------------------------------------------------------------- OTHER COUNTRIES >AUSTRALIA ABC Learning Center 0 1,225,000 ---------------------------------------------------------------------------- LATIN AMERICA >BRAZIL Caemi 6,300,000 8,800,000 Diagnosticos 156,250 200,000 Porto Seguro 594,000 1,000,000 Ultrapar 0 500,000,000 >MEXICO URBI Desarrollo 700,000 1,000,000 >CHILE Sociedad Quimica Y Minera de Chile 16,800 160,000 1-800-922-6769 36 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Anglo Irish Bank (Ireland) 4,741,010 3,888,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Hit Entertainment 1,270,000 0 Tullow Oil 7,500,000 6,500,000 >FRANCE Neopost 377,500 327,500 >NETHERLANDS Hunter Douglas 128,000 0 >SWITZERLAND Bachem 110,000 0 >SPAIN Abengoa 2,000,000 1,357,000 >ITALY Amplifon 270,000 190,000 Autogrill 830,000 0 Credito Emiliano 1,000,000 0 >FINLAND Amer Sports 555,000 0 >NORWAY Den Norske Bank 910,000 0 Ekornes 522,300 470,000 NUMBER OF SHARES ---------------------------- 03/31/05 06/30/05 ---------------------------------------------------------------------------- ASIA >JAPAN ARRK 380,000 0 Eneserve 358,000 63,000 Kappa Create 402,000 380,000 NIFCO 818,000 14,000 Olympus Optical 325,000 0 Wacoal 1,500,000 1,185,000 >HONG KONG Esprit Holdings 2,000,000 0 Lerado Group 27,932,000 27,480,000 Ngai Lik Industrial 14,500,000 11,330,000 >SOUTH KOREA Yuhan 63,280 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Corus Entertainment 330,000 0 Masonite International 445,000 0 Petrokazakhstan 185,000 153,100 37 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 96.0% ---------------------------------------------------------------------------- EUROPE: 59.7% >UNITED KINGDOM/IRELAND: 19.6% 3,888,000 Anglo Irish Bank (Ireland) $ 48,158 SMALL BUSINESS & MIDDLE MARKET BANKING 2,350,000 Grafton Group (Ireland) (b) 27,194 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 1,750,000 Exel 26,492 GLOBAL LOGISTICS & FREIGHT FORWARDING 2,840,000 Expro International 23,056 OFFSHORE OIL FIELD SERVICES 6,500,000 Tullow Oil 21,667 OIL & GAS PRODUCER 2,800,000 Paragon Group 21,187 UK BUY-TO-LET FINANCE COMPANY 4,825,000 United Drug (Ireland) 20,703 IRISH PHARMACEUTICAL WHOLESALER & OUTSOURCER 1,275,000 Depfa Bank (Ireland) 20,375 INTERNATIONAL PUBLIC SECTOR FINANCE 1,425,000 IAWS (Ireland) 19,908 BAKED GOODS 800,000 Kerry (Ireland) 19,730 FOOD INGREDIENTS 1,700,000 Kensington 17,127 NON-CONFORMING MORTGAGE COMPANY 900,000 Intermediate Capital 16,795 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 975,000 Northgate 15,777 LIGHT COMMERCIAL VEHICLE RENTAL SPECIALIST 600,000 Cobham 15,205 AEROSPACE COMPONENTS 798,000 Jurys Doyle Hotel (Ireland) 14,963 OWNER/OPERATOR OF MID-PRICED HOTELS 750,000 Xstrata 14,409 DIVERSIFIED MINING HOLDING COMPANY 1,175,000 Business Post 13,384 PARCEL & EXPRESS MAIL SERVICE 2,200,000 BBA Group 12,141 AVIATION SUPPORT SERVICES & NON-WOVEN MATERIALS 1,200,000 William Hill 11,545 LARGEST BOOKMAKER 1,281,000 Ulster Television 10,749 IRISH TELEVISION & RADIO STATION OPERATOR 1,200,000 Spectris 10,616 ELECTRONIC INSTRUMENTS & CONTROLS 3,800,000 RPS Group 10,486 ENVIRONMENTAL CONSULTING 2,450,000 Workspace Group 10,342 REAL ESTATE COMPANY 600,000 Paddy Power (Ireland) 10,240 IRISH BETTING SERVICES 500,000 Viridian 6,977 NORTHERN IRELAND ELECTRIC UTILITY 911,000 Bloomsbury Publishing 6,143 PUBLISHING ---------------------------------------------------------------------------- 445,369 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >FRANCE/BELGIUM: 9.7% 117,000 Vallourec $ 33,595 SEAMLESS TUBES 1,980,000 SES Global 29,803 SATELLITE BROADCASTING SERVICES 327,500 Neopost 28,784 POSTAGE METER MACHINES 360,000 Imerys 24,746 INDUSTRIAL MINERALS PRODUCER 492,000 April Group 15,296 INSURANCE POLICY CONSTRUCTION 390,000 Iliad 14,566 HIGH SPEED INTERNET SERVICE PROVIDER 450,000 Metropole TV 11,399 TELEVISION BROADCASTER 215,000 Carbone Lorraine 10,202 ADVANCED INDUSTRIAL MATERIALS 140,000 Essilor International 9,527 EYEGLASS LENSES 184,000 Omega Pharma (Belgium) 9,500 OTC PRODUCTS, PHARMACY & DENTAL SUPPLIES 400,000 Fininfo 8,378 DATA FEEDS FOR FRENCH BANKS & BROKERS 94,000 Bacou Dalloz 7,689 SAFETY EQUIPMENT 96,000 Pierre & Vacances 7,081 VACATION APARTMENT LETS 140,000 Norbert Dentressangle 6,600 TRANSPORT 31,000 Rubis 1,928 TANK STORAGE & LPG SUPPLIER ---------------------------------------------------------------------------- 219,094 >GERMANY/AUSTRIA: 8.0% 275,000 Wincor Nixdorf 22,467 RETAIL POS SYSTEMS & ATM MACHINES 315,000 Rhoen-Klinikum Pfd. 21,773 300,000 Rhoen-Klinikum 20,775 HOSPITAL MANAGEMENT 445,000 Bilfinger Berger 20,715 CONSTRUCTION & RELATED SERVICES 375,000 Wienerberger (Austria) 17,378 BRICKS & CLAY ROOFING TILES 415,000 GFK 16,363 MARKET RESEARCH SERVICES 450,000 Hugo Boss Designs 14,761 FASHION APPAREL 175,000 Deutsche Boerse 13,653 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 200,000 Vossloh 9,352 RAIL INFRASTRUCTURE & DIESEL LOCOMOTIVES 203,000 Grenke Grenkeleasing 8,603 FINANCING FOR IT EQUIPMENT 864,998 Takkt 8,346 MAIL ORDER RETAILER OF OFFICE & WAREHOUSE DURABLES 1-800-922-6769 38 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >GERMANY/AUSTRIA--CONTINUED 260,000 Deutsche Beteiligungs $ 4,053 PRIVATE EQUITY INVESTMENT MANAGEMENT 77,000 CTS Eventim (b) 3,232 EVENT TICKET SALES ---------------------------------------------------------------------------- 181,471 >NETHERLANDS: 7.7% 1,245,000 Fugro 30,899 SURVEY & GPS SERVICES 550,000 Aalberts Industries 25,132 FLOW CONTROL & HEAT TREATMENT 327,000 OPG Groep 22,770 HEALTHCARE SUPPLIES & PHARMACIES 230,000 Koninklijke Ten Cate 20,674 ADVANCED TEXTILES & INDUSTRIAL FABRICS 684,000 United Services Group 18,050 TEMPORARY STAFFING SERVICES 400,000 Sligro Food Group 16,066 FOOD SERVICE & WHOLESALING 400,000 IMTech 13,979 TECHNICAL ENGINEERING 890,000 Unit 4 Aggresso (b) 13,581 BUSINESS & SECURITY SOFTWARE 289,000 Smit International 13,398 HARBOR & OFFSHORE TOWAGE & MARINE SERVICES ---------------------------------------------------------------------------- 174,549 >SWITZERLAND: 4.3% 95,000 Kuehne & Nagel 20,088 FREIGHT FORWARDING/LOGISTICS 25,000 Geberit International 15,953 PLUMBING SUPPLIES 24,000 Sika (b) 14,937 CHEMICALS FOR CONSTRUCTION & INDUSTRIAL APPLICATION 3,000 Pargesa 10,933 INDUSTRIAL & MEDIA CONGLOMERATE 30,000 Schindler 10,798 ELEVATOR MANUFACTURER & SERVICE PROVIDER 85,000 Synthes 9,302 PRODUCTS FOR ORTHOPEDIC SURGERY 15,000 Givaudan 8,700 INDUSTRIAL FRAGRANCES & FLAVORS 119,000 BKW Energie 7,437 ELECTRIC UTILITY ---------------------------------------------------------------------------- 98,148 >SWEDEN: 2.4% 1,230,000 Hexagon 24,827 MEASUREMENT EQUIPMENT & POLYMERS 1,075,000 Nobia 15,601 KITCHEN CABINET MANUFACTURING & DISTRIBUTION 762,000 Gambro 10,168 PRODUCTS/SERVICES FOR RENAL CARE 188,000 Sweco (b) 3,388 NORDIC INFRASTRUCTURE/ENVIRONMENT CONSULTING ---------------------------------------------------------------------------- 53,984 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SPAIN: 1.7% 1,357,000 Abengoa $ 15,722 ENGINEERING & CONSTRUCTION 620,000 Red Electrica 17,113 SPANISH POWER GRID 120,000 Bankinter 6,118 MORTGAGE LENDER ---------------------------------------------------------------------------- 38,953 >ITALY: 1.4% 2,120,000 Davide Campari 15,490 SPIRITS & WINE 190,000 Amplifon 12,055 HEARING AID RETAILER 3,388,000 Ducati Motor (b) 4,011 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- 31,556 >CZECH REPUBLIC: 1.0% 183,000 Komercni Banka 22,922 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- >FINLAND: 1.0% 439,000 Jaakko Poyry 13,142 ENGINEERING CONSULTANTS IN FORESTRY, ENERGY 950,000 Sponda 9,765 OFFICE & WAREHOUSE PROPERTY COMPANY ---------------------------------------------------------------------------- 22,907 >RUSSIAN FEDERATION: 0.9% 700,000 RBC Information Systems (b) 11,620 FINANCIAL INFORMATION, MEDIA, & IT SERVICES 370,000 Mechel Steel Group 9,398 COKING COAL ---------------------------------------------------------------------------- 21,018 >NORWAY: 0.8% 470,000 Ekornes 9,091 NICHE FURNITURE MANUFACTURER 221,000 Orkla 8,103 FOOD & DIVERSIFIED CONSUMER GOODS ---------------------------------------------------------------------------- 17,194 >GREECE: 0.6% 930,000 Intralot 14,187 LOTTERY & GAMING SYSTEMS/SERVICES ---------------------------------------------------------------------------- >DENMARK: 0.4% 35,000 Kobenhavns Lufthavne 8,285 COPENHAGEN AIRPORT AUTHORITY ---------------------------------------------------------------------------- >POLAND: 0.2% 132,000 Central European Distribution (b) 4,928 SPIRITS & WINE DISTRIBUTION ----------- EUROPE: TOTAL 1,354,565 ---------------------------------------------------------------------------- 39 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- ASIA: 21.7% >JAPAN: 10.6% 480,100 Daito Trust Construction $ 17,928 APARTMENT BUILDER 862,000 Park 24 17,028 PARKING LOT OPERATOR 2,900,000 Bank of Yokohama 16,664 REGIONAL BANK 301,000 Ito En 15,435 BOTTLED TEA & OTHER BEVERAGES 338,000 Hogy Medical 15,076 DISPOSABLE SURGICAL PRODUCTS 1,185,000 Wacoal 15,035 WOMEN'S SPECIALTY APPAREL 470,000 Meitec 14,425 STAFFING COMPANY SPECIALIZING IN R&D ENGINEERS 750,000 Ushio 13,291 INDUSTRIAL LIGHT SOURCES 450,000 Shimano 12,769 BICYCLE COMPONENTS & FISHING TACKLE 14,465 Jupiter Telecommunications (b) 12,155 LARGEST CABLE SERVICE PROVIDER IN JAPAN 220,000 Fast Retailing 11,408 APPAREL RETAILER 110,000 Funai Electric 11,247 CONSUMER ELECTRONICS 906,000 Toyo Technica 10,380 VALUE ADDED RESELLER OF IMPORTED INSTRUMENTATION 2,248,000 Hiroshima Bank 10,219 REGIONAL BANK 450,000 Sato 10,038 BAR CODE PRINTERS & SUPPLIES 1,400,000 Chiba Bank 9,185 REGIONAL BANK 450,200 Ain Pharmaciez 9,098 DISPENSING PHARMACY/DRUGSTORE OPERATOR 1,500,000 Fukuoka Bank 8,857 REGIONAL BANK 380,000 Kappa Create 7,920 SUSHI CHAIN RESTAURANT OPERATOR 63,000 Eneserve 1,879 POWER GENERATORS 14,000 NIFCO 212 MOLDED PLASTIC COMPONENTS ---------------------------------------------------------------------------- 240,249 >TAIWAN: 4.3% 15,740,000 Phoenixtec Power 16,887 UNINTERRUPTIBLE POWER SUPPLIES 6,500,000 Advantech 15,319 EMBEDDED COMPUTERS 1,772,600 ASE Test (b) 11,416 SEMICONDUCTOR PACKAGING & TEST SERVICES 5,167,000 Springsoft Systems 10,740 ELECTRONIC DESIGN AUTOMATION SOFTWARE 9,661,000 Chicony Electronic 9,993 PC POWER SUPPLIES & KEYBOARDS 6,000,000 Sunplus Technology 8,398 FABLESS SEMICONDUCTOR DESIGNER NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- 5,300,000 Wah Lee Industrial $ 7,888 DISTRIBUTOR OF CHEMICALS, MATERIALS & EQUIPMENT 1,800,000 Novatek Microelectronics 7,654 LCD RELATED IC DESIGNER 8,470,000 Bank of Kaohsiung 5,980 COMMERCIAL BANKING 3,010,000 Taiwan Fu Hsing 3,380 DOOR LOCK MANUFACTURER ---------------------------------------------------------------------------- 97,655 >HONG KONG/CHINA: 2.7% 6,000,000 Hong Kong Exchanges & Clearing 15,541 HONG KONG EQUITY & DERIVATIVES OPERATOR 25,000,000 Global Bio-Chem Technology Group (China) 15,481 1,800,000 Global Bio-Chem Technology Group Warrants (China) 30 REFINER OF CORN-BASED COMMODITIES 6,000,000 Techtronic Industries 15,115 POWER TOOLS & MOTORIZED APPLIANCES 9,800,000 Hainan Meilan Airport (China) 5,573 CHINESE AIRPORT OPERATOR 17,700,000 Linmark 5,059 SOURCING OF CONSUMER GOODS 27,480,000 Lerado Group 2,898 BABY STROLLERS & INFANT CAR SEATS MANUFACTURER 11,330,000 Ngai Lik Industrial 2,235 CONSUMER ELECTRONICS MANUFACTURER ---------------------------------------------------------------------------- 61,932 >SOUTH KOREA: 1.2% 250,000 Hyundai Mobis 16,729 AUTO PARTS 100,000 Samsung Fire & Marine 8,083 NON-LIFE INSURANCE 200,000 Samyoung Heat Exchange 3,069 POWER PLANT RELATED MACHINERY ---------------------------------------------------------------------------- 27,881 >INDIA: 1.2% 1,329,000 Housing Development Finance 26,978 PREMIER MORTGAGE LENDER IN INDIA ---------------------------------------------------------------------------- >SINGAPORE: 1.1% 16,000,000 Comfort Del Gro 15,993 TAXI & MASS TRANSIT SERVICE 19,500,000 LMA International (b) 9,219 MEDICAL EQUIPMENT & SUPPLIES ---------------------------------------------------------------------------- 25,212 >INDONESIA: 0.6% 45,000,000 PT Perusahaan Gas Negara 13,279 GAS PIPELINE OPERATOR ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 493,186 ---------------------------------------------------------------------------- OTHER COUNTRIES: 8.2% >AUSTRALIA/NEW ZEALAND: 3.9% 3,000,000 Billabong International 30,993 ACTION SPORTS APPAREL BRAND MANAGER 3,000,000 Lion Nathan 17,247 BEER BREWER/DISTRIBUTOR 1-800-922-6769 40 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >AUSTRALIA/NEW ZEALAND--CONTINUED 350,000 Perpetual Trustees $ 15,232 AUSTRALIAN MUTUAL FUND MANAGER 3,000,000 Sky City Entertainment (New Zealand) 9,323 CASINO/ENTERTAINMENT COMPLEX 3,882,489 Pacific Brands 6,670 AUSTRALIAN BRANDED APPAREL 530,000 Major Drilling Group International (b) 5,225 MINING EXPLORATION DRILLER 1,225,000 ABC Learning Center 5,187 CHILDCARE CENTERS ---------------------------------------------------------------------------- 89,877 >CANADA: 3.6% 595,000 Talisman Energy 22,253 OIL & GAS PRODUCER 1,190,000 Shawcor 17,472 OIL & GAS PIPELINE PRODUCTS 450,000 Intrawest 10,776 OWNER/OPERATOR OF SKI RESORTS 400,000 Noranda 6,851 DIVERSIFIED MINING HOLDING COMPANY 1,100,000 Kinross Gold (b) 6,722 GOLD MINING 850,000 Ivanhoe Mines (b) 6,593 COPPER MINING IN MONGOLIA 153,100 Petrokazakhstan 5,600 OIL PRODUCER & REFINER IN KAZAKHSTAN 2,000,000 Northern Orion Resources (b) 4,921 MINING OF COPPER & GOLD IN ARGENTINA ---------------------------------------------------------------------------- 81,188 >SOUTH AFRICA: 0.7% 350,000 Edgars Consolidated Stores 15,183 LEADING RETAIL CONGLOMERATE ---------------------------------------------------------------------------- ----------- OTHER COUNTRIES: TOTAL 186,248 ---------------------------------------------------------------------------- LATIN AMERICA: 6.4% >BRAZIL: 2.5% 640,000 Natura Cosmeticos 20,422 DIRECT RETAILER OF COSMETICS 1,000,000 Porto Seguro 8,948 AUTO & LIFE INSURANCE 500,000,000 Ultrapar 8,741 SPECIALTY CHEMICALS & LIQUID PROPANE GAS DISTRIBUTION 280,000 America Latina Logistics 8,290 RAIL OPERATOR IN BRAZIL & ARGENTINA 8,800,000 Caemi 8,249 IRON ORE/KAOLIN PRODUCER 200,000 Diagnosticos (b) 2,710 MEDICAL DIAGNOSTIC SERVICES ---------------------------------------------------------------------------- 57,360 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- >MEXICO: 1.6% 660,000 Grupo Aeroportaurio Del Sureste $ 21,021 CANCUN & COZUMEL AIRPORT OPERATOR 3,000,000 Consorcio ARA 10,358 AFFORDABLE HOUSING BUILDER 1,000,000 URBI Desarrollo (b) 5,490 AFFORDABLE HOUSING BUILDER ---------------------------------------------------------------------------- 36,869 >ARGENTINA: 1.2% 340,000 Tenaris 26,612 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- >CHILE: 1.1% 160,000 Sociedad Quimica Y Minera de Chile 16,000 PRODUCER OF SPECIALTY FERTILIZERS, LITHIUM & IODINE 300,000 CorpBanca 7,830 CONSUMER & SME BANKING ---------------------------------------------------------------------------- 23,830 ----------- LATIN AMERICA: TOTAL 144,671 TOTAL COMMON STOCKS AND OTHER ----------- EQUITY-LIKE SECURITIES: 96.0% 2,178,670 (COST: $1,527,519) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 3.7% $ 34,000 Citigroup Funding 3.10% - Due 7/1/05 34,000 30,000 LaSalle Bank 3.20% - Due 7/5/05 29,989 19,046 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $19,429 (repurchase proceeds: $19,048) 19,046 ---------------------------------------------------------------------------- (AMORTIZED COST: $83,035) 83,035 ----------- TOTAL INVESTMENTS: 99.7% 2,261,705 (COST: $1,610,554)(a)(c) CASH AND OTHER ASSETS LESS LIABILITIES: 0.3% 6,552 ----------- TOTAL NET ASSETS: 100% $ 2,268,257 ============================================================================ 41 COLUMBIA ACORN INTERNATIONAL >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED ---------------------------------------------------------------------------- >Notes to Statement of Investments (in thousands) (a) At June 30, 2005, for federal income tax purpose cost of investments was $1,610,554 and net unrealized appreciation was $651,151 consisting of gross unrealized appreciation of $710,929 and gross unrealized depreciation of $59,778. (b) Non-income producing security. (c) On June 30, 2005, the Fund's total investments were denominated in currencies as follows: % OF TOTAL CURRENCY VALUE NET ASSETS ======================================================= Euro $ 863,991 38.1% British Pounds 264,098 11.6 Japanese Yen 240,249 10.6 US Dollar 197,460 8.7 Other currencies less than 5% of total net assets 695,907 30.7 ------------ ----- $ 2,261,705 99.7% ============ ===== 1-800-922-6769 42 COLUMBIA ACORN INTERNATIONAL >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2005, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 108,960 4.8% Industrial Materials 96,862 4.3 Conglomerates 76,614 3.4 Steel 60,207 2.6 Construction 59,401 2.6 Machinery 51,243 2.3 Specialty Chemicals 48,378 2.1 Outsourcing & Training Services 44,616 2.0 Electrical Components 28,496 1.2 Industrial Distribution 27,194 1.2 ---------------------------------------------------------------------------- 601,971 26.5 >CONSUMER GOODS/SERVICES Apparels 72,518 3.2 Food 55,704 2.5 Beverages 48,172 2.1 Retail 47,744 2.1 Gaming 35,972 1.6 Other Consumer Services 32,194 1.4 Durables Goods 31,895 1.4 Nondurables 28,525 1.3 Travel 25,739 1.1 Furniture & Textiles 24,692 1.1 Consumer Electronics 11,247 0.5 Casinos 9,323 0.4 Restaurants 7,920 0.4 Consumer Goods Distribution 4,928 0.2 Leisure Products 3,232 0.1 ---------------------------------------------------------------------------- 439,805 19.4 >FINANCE Banks 150,190 6.6 Other Finance Companies 79,489 3.5 Savings & Loans 33,096 1.5 Insurance 32,327 1.4 Money Management 19,285 0.8 ---------------------------------------------------------------------------- 314,387 13.8 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION Computer Hardware & Related Equipment $ 64,666 2.9% Business Information & Marketing Services 35,227 1.6 Satellite Broadcasting 29,803 1.3 Financial Processors 29,194 1.3 Semiconductors & Related Equipment 27,468 1.2 Business Software 24,321 1.1 Television Broadcasting 22,148 1.0 Instrumentation 20,996 0.9 Internet Related 14,566 0.6 Cable Television 12,155 0.5 Computer Services 11,620 0.5 Electronics Distribution 7,888 0.3 Publishing 6,143 0.3 Contract Manufacturing 2,235 0.1 ---------------------------------------------------------------------------- 308,430 13.6 >ENERGY/MINERALS Oil Services 71,427 3.1 Mining 50,421 2.2 Oil/Gas Producers 49,520 2.2 Agricultural Commodities 15,511 0.7 Refining/Marketing/Distribution 15,207 0.7 Non-Ferrous Metals 11,947 0.5 Independent Power 1,879 0.1 ---------------------------------------------------------------------------- 215,912 9.5 >HEALTH CARE Hospital Management 42,548 1.9 Services 32,938 1.5 Pharmaceuticals 30,203 1.3 Medical Equipment 28,048 1.2 Hospital/ Laboratory Supplies 17,786 0.8 ---------------------------------------------------------------------------- 151,523 6.7 >OTHER INDUSTRIES Transportation 79,160 3.5 Real Estate 35,955 1.6 Regulated Utilities 31,527 1.4 ---------------------------------------------------------------------------- 146,642 6.5 TOTAL COMMON STOCKS AND ------------------------------- OTHER EQUITY-LIKE SECURITIES 2,178,670 96.0 SHORT-TERM OBLIGATIONS 83,035 3.7 ------------------------------- TOTAL INVESTMENTS 2,261,705 99.7 CASH AND OTHER ASSETS LESS LIABILITIES 6,552 0.3 ------------------------------- NET ASSETS $ 2,268,257 100.0% ============================================================================ 43 COLUMBIA ACORN USA >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- INFORMATION American Tower 40,000 490,000 Navigant Consulting 0 98,300 Novell 1,330,000 1,850,000 Salem Communications 293,100 393,100 SSA Global Technologies 0 218,500 Tellabs 200,000 975,000 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES HNI 60,000 100,000 International Speedway Motors 241,300 271,300 ---------------------------------------------------------------------------- HEALTH CARE Advanced Medical Optics 0 94,171 Arrow International 0 100,000 Charles River Laboratories 40,000 220,000 Intermagnetics General 0 75,000 Neurocrine Biosciences 155,000 175,000 Serologicals 0 405,000 ---------------------------------------------------------------------------- ENERGY/MINERALS Layne Christensen 156,700 242,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Genlyte Group 244,000 308,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Nordson 40,100 211,800 Quanta Services 300,000 400,000 Spartech 125,000 287,500 ---------------------------------------------------------------------------- OTHER INDUSTRIES Heartland Express 0 87,800 NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- INFORMATION Mediacom Communications 300,000 0 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Urban Outfitters 48,200 0 ---------------------------------------------------------------------------- HEALTH CARE CTI Molecular Imaging 245,000 0 VISX 170,600 0 ---------------------------------------------------------------------------- ENERGY/MINERALS Equitable Resources 85,600 55,600 Quicksilver Resources 540,000 350,000 Range Resources 75,000 0 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Hub Group 206,000 0 Insurance Auto 41,900 0 1-800-922-6769 44 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS AND OTHER EQUITY-LIKE SECURITIES: 90.5% ---------------------------------------------------------------------------- INFORMATION: 27.4% >TELECOMMUNICATION SERVICES: 7.3% 652,000 Western Wireless (b) $ 27,580 RURAL CELLULAR PHONE SERVICES 1,005,000 Crown Castle International (b) 20,422 COMMUNICATION TOWERS 333,800 Commonwealth Telephone 13,990 RURAL PHONE FRANCHISES & CLEC 490,000 American Tower (b) 10,300 COMMUNICATION TOWERS IN USA & MEXICO 10,000 Telephone & Data Systems 408 10,000 Telephone & Data Systems Cl. S 383 CELLULAR & TELEPHONE SERVICES ---------------------------------------------------------------------------- 73,083 >BUSINESS/CONSUMER SOFTWARE: 7.3% 501,200 Micros Systems (b) 22,429 INFORMATION SYSTEMS FOR RESTAURANTS & HOTELS 1,850,000 Novell (b) 11,470 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 974,000 JDA Software Group (b) 11,084 APPLICATIONS/SOFTWARE & SERVICES FOR RETAILERS 266,650 Kronos (b) 10,770 LABOR MANAGEMENT SOLUTIONS 473,500 MRO Software (b) 6,918 ENTERPRISE MAINTENANCE SOFTWARE 260,000 Aspect Communications (b) 2,920 CALL CENTER SOFTWARE 218,500 SSA Global Technologies (b) 2,622 ENTERPRISE RESOURCE PLANNING (ERP) SOFTWARE 653,200 E.Piphany (b) 2,273 CRM SOFTWARE 60,000 Maximus 2,117 OUTSOURCER FOR GOVERNMENT ---------------------------------------------------------------------------- 72,603 >COMPUTER HARDWARE/ SEMICONDUCTORS/RELATED EQUIPMENT: 3.8% 365,300 Integrated Circuit Systems (b) 7,540 SILICON TIMING DEVICES 260,000 Unova (b) 6,924 BARCODE & WIRELESS LAN SYSTEMS 570,000 Symbol Technologies 5,626 MOBILE COMPUTERS & BARCODE SCANNERS 445,000 Entegris (b) 4,406 SEMICONDUCTOR WAGER SHIPPING & HANDLING PRODUCTS 99,000 Zebra Technologies (b) 4,335 BAR CODE PRINTERS 424,100 SeaChange International (b) 2,977 SYSTEMS FOR VIDEO ON DEMAND & AD INSERTION 100,000 Belden CDT 2,120 SPECIALTY CABLE 70,000 Littelfuse (b) 1,950 LITTLE FUSES 40,000 Rogers (b) 1,622 PCB LAMINATES & HIGH PERFORMANCE FOAMS ---------------------------------------------------------------------------- 37,500 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BROADCASTING: 2.1% 393,100 Salem Communications (b) $ 7,799 RADIO STATIONS FOR RELIGIOUS PROGRAMMING 695,000 Spanish Broadcasting (b) 6,943 SPANISH LANGUAGE RADIO STATIONS 610,000 Entravision Communications (b) 4,752 SPANISH LANGUAGE TV, RADIO & OUTDOOR 138,500 Gray Television 1,670 MID MARKET AFFILIATED TV STATIONS ---------------------------------------------------------------------------- 21,164 >TELECOMMUNICATIONS EQUIPMENT: 1.8% 975,000 Tellabs (b) 8,483 TELECOMMUNICATIONS EQUIPMENT 480,000 Andrew (b) 6,125 WIRELESS INFRASTRUCTURE EQUIPMENT 300,000 Symmetricom (b) 3,111 NETWORK TIMING & SYNCHRONIZATION DEVICES ---------------------------------------------------------------------------- 17,719 >TRANSACTION PROCESSORS: 1.6% 211,640 Global Payments 14,349 CREDIT CARD PROCESSOR 143,100 Pegasus Systems (b) 1,596 TRANSACTION PROCESSOR FOR HOTEL INDUSTRY ---------------------------------------------------------------------------- 15,945 >BUSINESS INFORMATION/BUSINESS SERVICES/PUBLISHING: 1.1% 102,800 Getty Images (b) 7,634 PHOTOGRAPHS FOR PUBLICATIONS & ELECTRONIC MEDIA 90,000 Ceridian (b) 1,753 HR SERVICES & PAYMENT PROCESSING 98,300 Navigant Consulting (b) 1,736 FINANCIAL CONSULTING FIRM ---------------------------------------------------------------------------- 11,123 >COMPUTER SERVICES: 0.8% 1,005,500 AnswerThink Consulting (b) 3,570 I/T INTEGRATION & BEST PRACTICE RESEARCH 786,000 RCM Technologies (b)(c) 3,333 TECHNOLOGY ENGINEERING SERVICES 200,000 Igate Capital (b) 716 I/T & BPO OUTSOURCING SERVICES ---------------------------------------------------------------------------- 7,619 >INTERNET: 0.7% 460,600 DoubleClick (b) 3,864 INTERNET ADVERTISING & DIRECT MARKETING STATISTICAL DATA 285,000 ValueClick (b) 3,514 INTERNET ADVERTISING ---------------------------------------------------------------------------- 7,378 >INSTRUMENTATION: 0.4% 90,000 Trimble Navigation (b) 3,507 GPS-BASED INSTRUMENTS ---------------------------------------------------------------------------- >ELECTRONICS DISTRIBUTION: 0.3% 60,000 CDW 3,425 TECHNOLOGY RESELLER ---------------------------------------------------------------------------- 45 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >CONTRACT MANUFACTURING: 0.2% 117,700 Plexus (b) $ 1,675 ELECTRONIC MANUFACTURING SERVICES ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 272,741 ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 18.0% >RETAIL: 8.0% 285,000 Abercrombie & Fitch 19,579 TEEN APPAREL RETAILER 435,750 Aeropostale (b) 14,641 MALL BASED TEEN RETAILER 360,000 Petco Animal Supplies (b) 10,555 PET SUPPLIES & SERVICES 230,000 Chico's FAS (b) 7,884 WOMEN'S SPECIALTY RETAILER 393,750 Christopher & Banks 7,190 WOMEN'S APPAREL RETAILER 212,500 Ann Taylor (b) 5,159 WOMEN'S APPAREL RETAILER 100,000 Michaels Stores 4,137 CRAFT & HOBBY SPECIALTY RETAILER 95,000 Genesco (b) 3,524 MULTI-CONCEPT BRANDED FOOTWEAR RETAILER 100,000 Sports Authority (b) 3,180 SPORTING GOODS STORES 141,200 Brookstone (b) 2,666 SPECIALTY CONSUMER PRODUCT RETAILER 60,000 West Marine (b) 1,084 LARGEST RETAILER OF BOATING SUPPLIES ---------------------------------------------------------------------------- 79,599 >CONSUMER SERVICES: 4.0% 396,000 ITT Educational Services (b) 21,154 POSTSECONDARY DEGREE PROGRAMS 435,000 Coinstar (b) 9,870 OWNER/OPERATOR OF COIN COUNTING MACHINES 371,700 Central Parking 5,111 OWNER, OPERATOR & MANAGER OF PARKING LOTS & GARAGES 60,000 Weight Watchers (b) 3,097 WEIGHT LOSS PROGRAMS ---------------------------------------------------------------------------- 39,232 >ENTERTAINMENT/LEISURE PRODUCTS: 1.8% 271,300 International Speedway Motors 15,263 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR 195,000 Callaway Golf 3,009 PREMIUM GOLF CLUBS & BALLS ---------------------------------------------------------------------------- 18,272 >APPAREL: 1.7% 194,200 Oxford Industries 8,360 BRANDED & PRIVATE LABEL APPAREL 168,000 Coach (b) 5,640 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 134,000 Steven Madden (b) 2,380 WHOLESALER/RETAILER OF FASHION FOOTWEAR ---------------------------------------------------------------------------- 16,380 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >NONDURABLES: 1.3% 177,200 Scotts Company (b) $ 12,618 CONSUMER LAWN & GARDEN PRODUCTS 38,900 Prestige Brands (b) 759 OTC, HOUSEHOLD & PERSONAL CARE PRODUCTS ---------------------------------------------------------------------------- 13,377 >FURNITURE: 1.1% 100,000 HNI 5,115 OFFICE FURNITURE & FIREPLACES 85,000 Herman Miller 2,621 OFFICE FURNITURE 60,000 American Woodmark 1,801 KITCHEN CABINET MANUFACTURER 20,000 Mohawk Industries (b) 1,650 CARPET & FLOORING ---------------------------------------------------------------------------- 11,187 >FOOD & BEVERAGES: 0.1% 37,000 NBTY (b) 960 VITAMINS & SUPPLEMENTS ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 179,007 ---------------------------------------------------------------------------- HEALTH CARE: 14.2% >MEDICAL EQUIPMENT: 5.4% 573,000 Edwards Lifesciences (b) 24,650 HEART VALVES 221,300 Diagnostic Products 10,474 IMMUNODIAGNOSTIC KITS 220,000 Viasys Healthcare (b) 4,970 RESPIRATORY & NEUROLOGY MEDICAL EQUIPMENT 94,171 Advanced Medical Optics (b) 3,743 MEDICAL DEVICES FOR EYE CARE 115,700 ICU Medical (b) 3,722 INTRAVENOUS THERAPY PRODUCTS 100,000 Arrow International 3,190 DISPOSABLE CATHETERS 75,000 Intermagnetics General (b) 2,307 MRI EQUIPMENT ---------------------------------------------------------------------------- 53,056 >SERVICES: 4.8% 220,000 Charles River Laboratories (b) 10,615 PHARMACEUTICAL RESEARCH 246,800 Lincare Holdings (b) 10,079 HOME HEALTH CARE SERVICES 133,250 Coventry Health Care (b) 9,427 PPO NETWORK 405,000 Serologicals (b) 8,606 BLOOD COLLECTION & ANTIBODY PRODUCTION 423,800 NDCHealth Group 7,616 HEALTH CLAIMS PROCESSING & DRUG MARKETING SERVICES 100,000 Dendrite International (b) 1,380 SOFTWARE FOR PHARMACEUTICAL SALES FORCE ---------------------------------------------------------------------------- 47,723 1-800-922-6769 46 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >BIOTECHNOLOGY/DRUG DELIVERY: 2.2% 175,000 Neurocrine Biosciences (b) $ 7,361 DRUGS FOR SLEEP, DIABETES, MS & ENDOMETRIOSIS 360,000 Nektar Therapeutics (b) 6,062 DRUG DELIVERY TECHNOLOGIES 260,000 AtheroGenics (b) 4,155 DRUGS FOR ATHEROSCLEROSIS, RHEUMATOID ARTHRITIS, ASTHMA 315,000 Ligand Pharmaceuticals (b) 2,189 DRUGS FOR PAIN, CANCER, OSTEOPOROSIS, & DIABETES 300,000 Lexicon Genetics (b) 1,482 DRUG DISCOVERY 375,000 Locus Discovery, Series D, Pfd. (d)(e) 750 HIGH THROUGHPUT RATIONAL DRUG DESIGN 363,636 Metabolex, Series F (d)(e) 53 DRUGS FOR DIABETES ---------------------------------------------------------------------------- 22,052 >MEDICAL SUPPLIES: 1.0% 222,800 Techne (b) 10,229 CYTOKINES, ANTIBODIES, OTHER REAGENTS FOR LIFE SCIENCES ---------------------------------------------------------------------------- >PHARMACEUTICALS: 0.8% 245,500 Par Pharmaceuticals (b) 7,809 GENERICS ---------------------------------------------------------------------------- ----------- HEALTH CARE: TOTAL 140,869 ---------------------------------------------------------------------------- ENERGY/MINERALS: 11.8% >OIL SERVICES: 6.1% 635,000 Chicago Bridge & Iron 14,516 ENGINEERING & CONSTRUCTION FOR PETROCHEMICALS & LNG 401,700 FMC Technologies (b) 12,842 OIL & GAS WELL HEAD MANUFACTURER 300,000 Pride International (b) 7,710 OFFSHORE DRILLING CONTRACTOR 941,000 Newpark Resources (b) 7,058 DRILLING FLUID SERVICES TO OIL & GAS INDUSTRY 242,000 Layne Christensen (b) 4,807 WATER/MINERAL DRILLER & COAL SEAM GAS PRODUCER 355,000 Hanover Compressor (b) 4,086 NATURAL GAS COMPRESSOR RENTAL 266,800 Pioneer Drilling (b) 4,071 OIL & GAS WELL DRILLER 51,000 Carbo Ceramics 4,027 NATURAL GAS WELL STIMULANTS 135,000 Key Energy Services (b) 1,634 OIL & GAS WELL WORKOVER SERVICES ---------------------------------------------------------------------------- 60,751 >OIL & GAS PRODUCERS: 4.0% 350,000 Quicksilver Resources (b) 22,376 NATURAL GAS & COAL SEAM GAS PRODUCER 272,000 Western Gas 9,493 OIL & COAL SEAM GAS PRODUCER 104,200 Southwestern Energy (b) 4,895 NATURAL GAS PRODUCER 450,000 Vaalco Energy (b) 1,557 OIL & GAS PRODUCER NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >OIL & GAS PRODUCERS--CONTINUED 70,000 McMoran Exploration (b) $ 1,366 NATURAL GAS PRODUCERS & LNG DEVELOPER ---------------------------------------------------------------------------- 39,687 >DISTRIBUTION/MARKETING/REFINING: 1.7% 245,000 Oneok 7,999 NATURAL GAS UTILITY, MARKETING & PROCESSING 193,000 Atmos Energy 5,558 NATURAL GAS UTILITY 55,600 Equitable Resources 3,781 NATURAL GAS PRODUCER & UTILITY ---------------------------------------------------------------------------- 17,338 ----------- ENERGY/MINERALS: TOTAL 117,776 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 9.7% >MACHINERY: 5.0% 282,000 Esco Technologies (b) 28,426 FILTRATION & TEST EQUIPMENT 194,000 Pentair 8,305 PUMPS, WATER TREATMENT & TOOLS 211,800 Nordson 7,261 DISPENSING SYSTEMS FOR ADHESIVES & COATINGS 110,000 Ametek 4,603 AEROSPACE/INDUSTRIAL INSTRUMENTS 50,000 Kaydon 1,392 SPECIALIZED FRICTION & MOTION CONTROL PRODUCTS ---------------------------------------------------------------------------- 49,987 >INDUSTRIAL GOODS: 1.6% 308,000 Genlyte Group (b) 15,012 COMMERCIAL LIGHTING FIXTURES 25,000 Donaldson 758 INDUSTRIAL AIR FILTRATION ---------------------------------------------------------------------------- 15,770 >WATER: 1.0% 134,000 Cuno (b) 9,573 FILTRATION & FLUIDS CLARIFICATION ---------------------------------------------------------------------------- >CONSTRUCTION: 0.8% 112,700 Florida Rock Industries 8,267 CONCRETE & AGGREGATES ---------------------------------------------------------------------------- >SPECIALTY CHEMICALS/INDUSTRIAL MATERIALS: 0.5% 287,500 Spartech 5,118 PLASTICS DISTRIBUTION & COMPOUNDING ---------------------------------------------------------------------------- >OUTSOURCING SERVICES: 0.4% 400,000 Quanta Services (b) 3,520 ELECTRICAL & TELECOM CONSTRUCTION SERVICES ---------------------------------------------------------------------------- >INDUSTRIAL DISTRIBUTION: 0.3% 113,000 Nuco2 (b) 2,901 BULK CO2 GAS DISTRIBUTION TO RESTAURANTS ---------------------------------------------------------------------------- 47 COLUMBIA ACORN USA >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >INDUSTRIAL SERVICES: 0.1% 95,000 Clark $ 1,361 EXECUTIVE COMPENSATION & BENEFITS CONSULTING ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 96,497 ---------------------------------------------------------------------------- FINANCE: 8.7% >FINANCE COMPANIES: 4.4% 1,091,500 AmeriCredit (b) 27,833 AUTO LENDING 520,200 World Acceptance (b) 15,632 PERSONAL LOANS ---------------------------------------------------------------------------- 43,465 >INSURANCE: 2.6% 430,000 HCC Insurance Holdings 16,284 SPECIALTY INSURANCE 14,000 Markel (b) 4,746 SPECIALTY INSURANCE 35,000 Philadelphia Consolidated Holding (b) 2,967 SPECIALTY INSURANCE 91,000 United America Indemnity (b) 1,564 SPECIALTY INSURANCE ---------------------------------------------------------------------------- 25,561 >BANKS: 1.3% 263,000 TCF Financial 6,806 GREAT LAKES BANK 197,656 Chittenden 5,376 VERMONT & WESTERN MASSACHUSETTS BANK 20,000 First Financial BankShares 677 WEST TEXAS BANK 30,000 West Bancorporation 564 DES MOINES COMMERCIAL BANK ---------------------------------------------------------------------------- 13,423 >SAVINGS & LOAN: 0.4% 116,400 Anchor Bancorp Wisconsin 3,522 WISCONSIN THRIFT ---------------------------------------------------------------------------- ----------- FINANCE: TOTAL 85,971 ---------------------------------------------------------------------------- NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- OTHER INDUSTRIES: 0.7% >REAL ESTATE: 0.2% 100,000 Crescent Real Estate Equities $ 1,875 CLASS A OFFICE BUILDINGS 35,000 Highland Hospitality 366 HOTEL REAL ESTATE INVESTMENT TRUST ---------------------------------------------------------------------------- 2,241 >REGULATED UTILITIES: 0.2% 90,000 Northeast Utilities 1,877 REGULATED ELECTRIC UTILITY ---------------------------------------------------------------------------- >LOGISTICS: 0.2% 87,800 Heartland Express 1,706 REGIONAL DRY VAN TRUCKER ---------------------------------------------------------------------------- >WASTE MANAGEMENT: 0.1% 42,800 Waste Connections (b) 1,596 SOLID WASTE MANAGEMENT ---------------------------------------------------------------------------- ----------- OTHER INDUSTRIES: TOTAL 7,420 ----------- TOTAL COMMON STOCKS AND OTHER 900,281 EQUITY-LIKE SECURITIES: 90.5% (COST: $601,302) SHORT-TERM OBLIGATIONS: 9.8% $ 33,000 Citigroup Funding 3.10% - Due 7/1/05 33,000 33,000 LaSalle Bank 3.20% - Due 7/5/05 32,989 28,000 Verizon Network 3.26% - Due 7/8/05 27,982 3,283 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/01/05 at 3.00% collateralized by Federal Home Loan Mortgage Association Notes, maturing 3/24/08 market value $3,351 (repurchase proceeds: $3,283) 3,283 ---------------------------------------------------------------------------- (AMORTIZED COST: $97,254) 97,254 ----------- TOTAL INVESTMENTS: 100.3% 997,535 (COST: $698,556)(a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.3)% (3,136) ----------- TOTAL NET ASSETS: 100% $ 994,399 ============================================================================ 1-800-922-6769 48 -------------------------------------------------------------------------------- >Notes to Statement of Investments (in thousands) (a) At June 30, 2005, for federal income tax purposes cost of investments was $698,556 and net unrealized appreciation was $298,979 consisting of gross unrealized appreciation of $332,259 and gross unrealized depreciation of $33,280. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: RCM Technologies 6.90% The aggregate cost and value of this company at June 30, 2005, was $5,636 and $3,333, respectively. Investments in affiliate companies represent 0.3% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005, were as follows: Dividend Income $ -- Net realized gain or loss $ -- Change in unrealized gain or loss $ (622) Purchases $ -- Proceeds from sales $ -- (d) Denotes a restricted security, which is subject to restrictions on resale under federal securities laws. At June 30, 2005, these securities were illiquid. At June 30, 2005, these securities (in thousands) amounted to $803 which represents 0.1% of total net assets. Additional information on these securities is as follows:
ACQUISITION SECURITY DATES SHARES (000) COST (000) VALUE (000) -------------------------------------------------------------------------------------- Locus Discovery, Series D, Pfd. 09/05/01 375 $1,500 $ 750 Metabolex, Series F 05/11/00 364 2,000 53 ------ ----- $3,500 $ 803 ====== =====
(e) Represents fair value as determined in good faith under procedures by the Board of Trustees. 49 COLUMBIA ACORN INTERNATIONAL SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Compass Group 220,000 400,000 Grafton Group (Ireland) 70,000 105,000 William Hill 0 80,000 >SWITZERLAND BKW Energie 0 11,200 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) >SWEDEN Gambro 0 38,900 ---------------------------------------------------------------------------- ASIA >JAPAN Ito En 12,000 32,800 NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- EUROPE >UNITED KINGDOM/IRELAND Anglo Irish Bank (Ireland) 282,442 244,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) >ITALY Autogrill 70,000 0 ---------------------------------------------------------------------------- ASIA >JAPAN Fast Retailing 11,500 0 Olympus Optical 23,000 0 ---------------------------------------------------------------------------- OTHER COUNTRIES >CANADA Noranda 50,000 0 1-800-922-6769 50 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 95.7% ---------------------------------------------------------------------------- EUROPE: 60.3% >UNITED KINGDOM/IRELAND: 22.4% 244,000 Anglo Irish Bank (Ireland) $ 3,022 SMALL BUSINESS & MIDDLE MARKET BANKING 192,000 Exel 2,907 GLOBAL LOGISTICS & FREIGHT FORWARDING 132,000 Depfa Bank (Ireland) 2,109 INTERNATIONAL PUBLIC SECTOR FINANCE 130,000 IAWS (Ireland) 1,816 MANUFACTURER OF BAKED GOODS 400,000 Compass Group 1,678 INTERNATIONAL CONCESSION & CONTRACT CATERER 105,000 Grafton Group (Ireland) (b) 1,215 BUILDING MATERIALS, WHOLESALING & DIY RETAILING 80,000 William Hill 770 LARGEST BOOKMAKER 80,000 British Sky Broadcasting 754 DIGITAL SATELLITE BROADCASTING 40,000 Intermediate Capital 746 EUROPEAN PROVIDER OF MEZZANINE CAPITAL 25,000 Kerry (Ireland) 617 FOOD INGREDIENTS 17,000 Cobham 431 AEROSPACE COMPONENTS ---------------------------------------------------------------------------- 16,065 >FRANCE/BELGIUM: 13.2% 33,000 Neopost 2,900 POSTAGE METER MACHINES 170,000 SES Global 2,559 SATELLITE BROADCASTING SERVICES 27,000 Imerys 1,856 INDUSTRIAL MINERALS PRODUCER 34,000 Belgacom (Belgium) 1,158 TELECOM SERVICE PROVIDER 14,500 Essilor International 987 EYEGLASS LENSES ---------------------------------------------------------------------------- 9,460 >SWITZERLAND: 12.1% 10,200 Kuehne & Nagel 2,157 FREIGHT FORWARDING/LOGISTICS 14,000 Swatch Group 1,959 WATCH & ELECTRONICS MANUFACTURER 1,900 Geberit International 1,212 PLUMBING SUPPLIES 10,000 Synthes 1,094 PRODUCTS FOR ORTHOPEDIC SURGERY 2,300 Schindler 828 ELEVATOR MANUFACTURER & SERVICE PROVIDER 11,200 BKW Energie 700 ELECTRIC UTILITY 1,200 Givaudan 696 INDUSTRIAL FRAGRANCES & FLAVORS ---------------------------------------------------------------------------- 8,646 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >NORWAY: 3.6% 157,500 Den Norske Bank $ 1,632 LARGEST NORWEGIAN BANK 26,000 Orkla 953 FOOD & DIVERSIFIED CONSUMER GOODS ---------------------------------------------------------------------------- 2,585 >CZECH REPUBLIC: 2.9% 16,840 Komercni Banka 2,109 LEADING CZECH UNIVERSAL BANK ---------------------------------------------------------------------------- >SPAIN: 2.8% 73,000 Red Electrica 2,015 SPANISH POWER GRID ---------------------------------------------------------------------------- >GERMANY: 2.6% 13,000 Deutsche Boerse 1,014 TRADING, CLEARING & SETTLEMENT SERVICES FOR FINANCIAL MARKETS 12,000 Rhoen-Klinikum 830 HOSPITAL MANAGEMENT ---------------------------------------------------------------------------- 1,844 >SWEDEN: 0.7% 38,900 Gambro 519 PRODUCTS/SERVICES FOR RENAL CARE ---------------------------------------------------------------------------- ----------- EUROPE: TOTAL 43,243 ---------------------------------------------------------------------------- ASIA: 23.7% >JAPAN: 17.4% 68,000 Shimano 1,930 BICYCLE COMPONENTS & FISHING TACKLE 16,200 Hoya 1,861 OPTO-ELECTRICAL COMPONENTS & EYEGLASS LENSES 48,000 Daito Trust Construction 1,792 APARTMENT BUILDER 32,800 Ito En 1,682 BOTTLED TEA & OTHER BEVERAGES 1,627 Jupiter Telecommunications (b) 1,367 LARGEST CABLE SERVICE PROVIDER IN JAPAN 77,000 Ushio 1,365 INDUSTRIAL LIGHT SOURCES 11,000 Funai Electric 1,125 CONSUMER ELECTRONICS 181,800 Hiroshima Bank 826 REGIONAL BANK 94,000 Bank of Yokohama 540 REGIONAL BANK ---------------------------------------------------------------------------- 12,488 >HONG KONG/CHINA: 4.1% 650,000 Hong Kong Exchanges & Clearing 1,684 HONG KONG EQUITY & DERIVATIVES OPERATOR 2,000,000 Global Bio-Chem Technology Group (China) 1,239 REFINER OF CORN-BASED COMMODITIES ---------------------------------------------------------------------------- 2,923 51 COLUMBIA ACORN INTERNATIONAL SELECT >STATEMENT OF INVESTMENTS (UNAUDITED), CONTINUED NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >SINGAPORE: 2.2% 1,600,000 Comfort Del Gro $ 1,599 TAXI & MASS TRANSIT SERVICE ---------------------------------------------------------------------------- ----------- ASIA: TOTAL 17,010 ---------------------------------------------------------------------------- OTHER COUNTRIES: 7.7% >CANADA: 5.0% 300,000 Kinross Gold (b) 1,833 GOLD MINING 47,000 Talisman Energy 1,758 OIL & GAS PRODUCER ---------------------------------------------------------------------------- 3,591 >AUSTRALIA: 2.7% 330,000 Lion Nathan 1,897 BEER BREWER/DISTRIBUTOR ---------------------------------------------------------------------------- ----------- OTHER: TOTAL 5,488 ---------------------------------------------------------------------------- LATIN AMERICA: 4.0% >ARGENTINA: 4.0% 37,000 Tenaris 2,896 STEEL PIPE FOR OIL WELLS & PIPELINES ---------------------------------------------------------------------------- ----------- LATIN AMERICA: TOTAL 2,896 ----------- TOTAL COMMON STOCKS: 95.7% 68,637 (COST: $53,994) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATION: 4.3% $ 3,087 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $3,149 (repurchase proceeds: $3,087) $ 3,087 ---------------------------------------------------------------------------- (COST: $3,087) 3,087 ----------- TOTAL INVESTMENTS: 100.0% 71,724 (COST: $57,081)(a)(c) CASH AND OTHER ASSETS LESS LIABILITIES: 0.0% (14) ----------- TOTAL NET ASSETS: 100% $ 71,710 ============================================================================ -------------------------------------------------------------------------------- >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purpose cost of investments was $57,081 and net unrealized appreciation was $14,643 consisting of gross unrealized appreciation of $16,972 and gross unrealized depreciation of $2,329. (b) Non-income producing security. (c) On June 30, 2005, the Fund's total investments were denominated in currencies as follows: % OF TOTAL CURRENCY VALUE NET ASSETS ------------------------------------------------ Euro $22,098 30.8% Japanese Yen 12,488 17.4 Swiss Franc 8,646 12.1 British Pounds 7,285 10.2 US Dollar 5,983 8.3 Canadian Dollar 3,591 5.0 Other currencies less than 5% of total net assets 11,633 16.2 ------- ----- $71,724 100.0% ======= ===== 1-800-922-6769 52 COLUMBIA ACORN INTERNATIONAL SELECT >PORTFOLIO DIVERSIFICATION (UNAUDITED) At June 30, 2005, the Fund's portfolio investments as a percent of net assets was diversified as follows: VALUE (000) PERCENT ---------------------------------------------------------------------------- >INDUSTRIAL GOODS/SERVICES Other Industrial Services $ 5,892 8.2% Industrial Materials 3,068 4.3 Machinery 2,900 4.1 Steel 2,896 4.0 Electrical Components 1,796 2.5 Construction 1,792 2.5 Industrial Distribution 1,215 1.7 Specialty Chemicals 696 1.0 ---------------------------------------------------------------------------- 20,255 28.3 >CONSUMER GOODS/SERVICES Durable Goods 3,889 5.4 Beverages 3,579 5.0 Food 2,433 3.4 Restaurants 1,678 2.3 Consumer Electronics 1,125 1.6 Non-Durables 953 1.3 Gaming 770 1.1 ---------------------------------------------------------------------------- 14,427 20.1 >FINANCE Banks 10,238 14.3 Other Finance Companies 746 1.0 ---------------------------------------------------------------------------- 10,984 15.3 VALUE (000) PERCENT ---------------------------------------------------------------------------- >INFORMATION Financial Processors $ 2,698 3.8% Satellite Broadcasting and Services 2,559 3.6 Semiconductors and Related Equipment 1,861 2.6 Cable Television 1,367 1.9 Telephone Services 1,158 1.6 Television Broadcasting 754 1.0 ---------------------------------------------------------------------------- 10,397 14.5 >ENERGY/MINERALS Non-Ferrous Metals 1,833 2.6 Oil/Gas Producers 1,758 2.4 Agricultural Commodities (includes Forestry) 1,239 1.7 ---------------------------------------------------------------------------- 4,830 6.7 >HEALTH CARE Medical Equipment 2,081 2.9 Hospital Management 830 1.2 HealthCare Services 519 0.7 ---------------------------------------------------------------------------- 3,430 4.8 >OTHER INDUSTRIES Regulated Utilities 2,715 3.8 Transportation 1,599 2.2 ---------------------------------------------------------------------------- 4,314 6.0 ------------------------------- TOTAL COMMON STOCKS 68,637 95.7 SHORT-TERM OBLIGATION 3,087 4.3 ------------------------------- TOTAL INVESTMENTS 71,724 100.0 CASH AND OTHER ASSETS LESS LIABILITIES (14) 0.0 ------------------------------- NET ASSETS $ 71,710 100.0% ============================================================================ 53 COLUMBIA ACORN SELECT >MAJOR PORTFOLIO CHANGES IN THE SECOND QUARTER (UNAUDITED) NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 ADDITIONS ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Coach 1,260,000 1,400,000 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Costco 820,000 845,000 ITT Educational Services 1,451,000 1,550,000 International Speedway Motors 550,000 670,000 ---------------------------------------------------------------------------- INFORMATION American Tower 2,300,000 2,350,000 Aspect Communications 2,074,700 2,182,000 CDW 525,000 690,000 Novell 4,000,000 5,000,000 Tellabs 8,100,000 8,900,000 Tribune Company 0 490,000 ---------------------------------------------------------------------------- FINANCE Conseco 0 1,800,000 Nuveen Investments 0 975,000 ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES Mine Safety Appliances 0 850,000 Quanta Services 1,576,000 2,810,000 Spartech 0 173,000 Worthington Industries 0 2,000,000 ---------------------------------------------------------------------------- ENERGY/MINERALS FMC Technologies 400,000 450,000 Pride International 1,654,000 1,854,000 NUMBER OF SHARES ----------------------------- 03/31/05 06/30/05 SALES ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES Herman Miller 1,160,000 471,032 ---------------------------------------------------------------------------- INFORMATION FTI Consulting 925,000 143,200 McAfee 2,539,900 0 Moodys 940,000 0 (INCLUDES THE EFFECT OF A 2 FOR 1 STOCK SPLIT) Synopsys 860,000 0 1-800-922-6769 54 COLUMBIA ACORN SELECT >STATEMENT OF INVESTMENTS (UNAUDITED) JUNE 30, 2005 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- COMMON STOCKS: 90.6% ---------------------------------------------------------------------------- CONSUMER GOODS/SERVICES: 29.4% >RETAIL: 11.4% 3,000,000 Safeway $ 67,770 RETAIL FOOD & DRUG STORES 975,000 Abercrombie & Fitch 66,982 TEEN APPAREL RETAILER 845,000 Costco 37,873 WAREHOUSE SUPERSTORES ---------------------------------------------------------------------------- 172,625 >CONSUMER SERVICES: 8.0% 1,550,000 ITT Educational Services (b) 82,801 POSTSECONDARY DEGREE PROGRAMS 728,000 Weight Watchers (b) 37,572 WEIGHT LOSS PROGRAM ---------------------------------------------------------------------------- 120,373 >FURNITURE & MANUFACTURERS: 4.1% 1,400,000 Coach (b) 46,998 DESIGNER & RETAILER OF BRANDED LEATHER ACCESSORIES 471,032 Herman Miller 14,527 OFFICE FURNITURE ---------------------------------------------------------------------------- 61,525 >LEISURE VEHICLES: 3.4% 1,050,000 Harley-Davidson 52,080 MOTORCYCLES & RELATED MERCHANDISE ---------------------------------------------------------------------------- >ENTERTAINMENT: 2.5% 670,000 International Speedway Motors 37,694 LARGEST MOTORSPORT RACETRACK OWNER & OPERATOR ---------------------------------------------------------------------------- ----------- CONSUMER GOODS/SERVICES: TOTAL 444,297 ---------------------------------------------------------------------------- INFORMATION: 26.3% >TELECOMMUNICATIONS EQUIPMENT: 5.1% 8,900,000 Tellabs (b) 77,430 TELECOMMUNICATIONS EQUIPMENT ---------------------------------------------------------------------------- >BUSINESS SOFTWARE: 3.7% 5,000,000 Novell (b) 31,000 DIRECTORY, OPERATING SYSTEM & IDENTITY MANAGEMENT SOFTWARE 2,182,000 Aspect Communications (b) 24,504 CALL CENTER SOFTWARE ---------------------------------------------------------------------------- 55,504 >INTERNET: 3.5% 9,600,000 Skillsoft Publishing (b)(c) 33,120 PROVIDER OF WEB-BASED LEARNING SOLUTIONS (E-LEARNING) 820,000 IAC/Interactive Corp (b) 19,721 DOMINATE INTERNET MIDDLEMAN ---------------------------------------------------------------------------- 52,841 >MOBILE COMMUNICATIONS: 3.3% 2,350,000 American Tower (b) 49,397 COMMUNICATION TOWERS IN USA & MEXICO ---------------------------------------------------------------------------- NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- >TELEVISION PROGRAMMING/CATV: 2.8% 896,350 Liberty Global (formerly known as Liberty Media International) (b) $ 41,833 CATV HOLDING COMPANY ---------------------------------------------------------------------------- >ELECTRONICS DISTRIBUTION: 2.6% 690,000 CDW 39,392 TECHNOLOGY RESELLER ---------------------------------------------------------------------------- >INSTRUMENTATION: 2.1% 1,400,000 Tektronix 32,578 ANALYTICAL INSTRUMENTS ---------------------------------------------------------------------------- >BUSINESS INFORMATION: 1.5% 537,800 Fair Isaac 19,630 CREDIT SCORING & DECISION ANALYTIC SOFTWARE 143,200 FTI Consulting (b) 2,993 FINANCIAL CONSULTING FIRM ---------------------------------------------------------------------------- 22,623 >PUBLISHING: 1.1% 490,000 Tribune Company 17,238 NEWSPAPERS & TV STATIONS ---------------------------------------------------------------------------- >COMPUTER SERVICES: 0.6% 2,445,000 AnswerThink Consulting (b)(c) 8,680 I/T INTEGRATION & BEST PRACTICE RESEARCH ---------------------------------------------------------------------------- ----------- INFORMATION: TOTAL 397,516 ---------------------------------------------------------------------------- FINANCE: 17.1% >MONEY MANAGEMENT: 6.7% 2,500,000 Janus Capital 37,600 MANAGES MUTUAL FUNDS 975,000 Nuveen Investments 36,680 SPECIALTY MUTUAL FUNDS 729,500 SEI Investments 27,247 MUTUAL FUND ADMINISTRATION & INVESTMENT MANAGEMENT ---------------------------------------------------------------------------- 101,527 >INSURANCE: 5.3% 120,000 Markel (b) 40,680 SPECIALTY INSURANCE 1,800,000 Conseco (b) 39,276 INDIVIDUAL LIFE INSURANCE & ANNUITY PRODUCTS ---------------------------------------------------------------------------- 79,956 >BANKS: 5.1% 1,970,000 TCF Financial 50,984 GREAT LAKES BANK 750,000 Associated Banc-Corp 25,245 MIDWEST BANK ---------------------------------------------------------------------------- 76,229 ----------- FINANCE: TOTAL 257,712 ---------------------------------------------------------------------------- 55 NUMBER OF SHARES VALUE (000) ---------------------------------------------------------------------------- INDUSTRIAL GOODS/SERVICES: 8.7% >INDUSTRIAL GOODS: 2.6% 850,000 Mine Safety Appliances $ 39,270 SAFETY EQUIPMENT ---------------------------------------------------------------------------- >LOGISTICS: 2.2% 661,000 Expeditors International of Washington 32,924 INTERNATIONAL FREIGHT FORWARDER ---------------------------------------------------------------------------- >STEEL: 2.1% 2,000,000 Worthington Industries 31,600 STEEL PROCESSING ---------------------------------------------------------------------------- >OUTSOURCING SERVICES & TRAINING: 1.6% 2,810,000 Quanta Services (b) 24,728 ELECTRICAL & TELECOM CONSTRUCTION SERVICES ---------------------------------------------------------------------------- >SPECIALTY CHEMICALS & INDUSTRIAL MATERIALS: 0.2% 173,000 Spartech 3,079 PLASTICS DISTRIBUTION & COMPOUNDING ---------------------------------------------------------------------------- ----------- INDUSTRIAL GOODS/SERVICES: TOTAL 131,601 ---------------------------------------------------------------------------- HEALTH CARE: 5.0% >SERVICES: 5.0% 530,000 Coventry Health Care (b) 37,497 PPO NETWORK 910,000 Lincare Holdings (b) 37,164 HOME HEALTH CARE SERVICES ---------------------------------------------------------------------------- 74,661 ----------- HEALTH CARE: TOTAL 74,661 ---------------------------------------------------------------------------- ENERGY/MINERALS: 4.1% >OIL SERVICES: 4.1% 1,854,000 Pride International (b) 47,648 OFFSHORE DRILLING CONTRACTOR 450,000 FMC Technologies (b) 14,386 OIL & GAS WELL HEAD MANUFACTURER ---------------------------------------------------------------------------- 62,034 ----------- ENERGY & MINERALS: TOTAL 62,034 ----------- TOTAL COMMON STOCKS: 90.6% 1,367,821 (COST: $1,146,802) PRINCIPAL AMOUNT (000) VALUE (000) ---------------------------------------------------------------------------- SHORT-TERM OBLIGATIONS: 8.3% $ 32,000 Toyota Motor Credit 3.25% - Due 7/6/05 $ 31,985 30,000 General Electric Capital 3.25% - Due 7/7/05 29,984 26,000 Prudential Funding 3.10% - Due 7/1/05 26,000 26,000 LaSalle Bank 3.20% - Due 7/5/05 25,991 11,354 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $11,583 (repurchase proceeds: $11,355) 11,354 ---------------------------------------------------------------------------- (AMORTIZED COST: $125,314) 125,314 ----------- TOTAL INVESTMENTS: 98.9% 1,493,135 (COST: $1,272,116)(a) CASH AND OTHER ASSETS LESS LIABILITIES: 1.1% 17,357 ----------- TOTAL NET ASSETS: 100% $ 1,510,492 ============================================================================ >NOTES TO STATEMENT OF INVESTMENTS (IN THOUSANDS) (a) At June 30, 2005, for federal income tax purposes cost of investments was $1,272,116 and net unrealized appreciation was $221,019 consisting of gross unrealized appreciation of $262,819 and gross unrealized depreciation of $41,800. (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 shares. On June 30, 2005, the Fund held five percent or more of the outstanding voting securities of the following companies: Skillsoft Publishing 8.98% AnswerThink Consulting 5.69 The aggregate cost and value of these companies at June 30, 2005, was $71,464 and $41,800 respectively. Investments in affiliate companies represent 2.8% of total net assets at June 30, 2005. Investment activity and income amounts relating to affiliates during the six months ended June 30, 2005, were as follows: Dividend Income $ -- Net realized gain or loss $ -- Change in unrealized gain or loss $ (22,985) Purchases $ 13,030 Proceeds from sales $ -- 1-800-922-6769 56 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 57 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
COLUMBIA COLUMBIA COLUMBIA ACORN ACORN ACORN JUNE 30, 2005 FUND INTERNATIONAL USA --------------------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS: Unaffiliated investments, at cost $ 7,516,154 $ 1,610,554 $ 692,920 Affiliated investments, at cost (See Note 4) 1,549,261 -- 5,636 --------------------------------------------------------------------------------------------------------------------------------- Unaffiliated investments, at value $ 12,511,138 $ 2,261,705 $ 994,202 Affiliated investments, at value (See Note 4) 1,988,672 -- 3,333 Cash 1 --* --* Foreign currency (cost: Columbia Acorn Fund $2,163; Columbia Acorn International $1,853; Columbia Acorn International Select $44) 2,150 1,850 -- Receivable for: Investments sold 22,839 19,931 -- Fund shares sold 21,664 2,402 1,275 Dividends and interest 7,263 4,474 191 Payment on a liquidated security 161 -- 54 Foreign tax reclaims 1,020 839 4 Deferred Trustees' Compensation Investments 1,362 419 95 --------------------------------------------------------------------------------------------------------------------------------- Total Assets 14,556,270 2,291,620 999,154 LIABILITIES: Expense reimbursement due to Investment Adviser -- -- -- Payable for: Investments purchased 21,915 18,883 2,652 Fund shares redeemed 16,061 1,752 888 Management fee 7,487 1,464 704 Administration fee 520 82 34 12b-1 Service & Distribution fees 2,579 86 110 Reports to shareholders 1,695 321 146 Deferred Trustees' fees 1,362 419 95 Transfer agent fees 594 87 38 Trustees' fees 42 -- -- Custody fees 23 81 2 Deferred foreign capital gains tax payable -- 2 -- Other liabilities 1,185 186 86 --------------------------------------------------------------------------------------------------------------------------------- Total Liabilities 53,463 23,363 4,755 --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399 ================================================================================================================================= COMPOSITION OF NET ASSETS: Paid in capital $ 8,620,923 $ 1,570,855 $ 666,167 Undistributed (Overdistributed) net investment income (Accumulated net investment loss) 7,920 3,915 1,568 Accumulated net realized gain (loss) 439,517 42,430 27,631 Net unrealized appreciation (depreciation) on: Investments 5,434,395 651,151 298,979 Foreign currency translations (109) (91) -- Foreign capital gains tax -- (3) -- Liquidated security 161 -- 54 --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 14,502,807 $ 2,268,257 $ 994,399 ================================================================================================================================= Net asset value per share - Class A (a) $ 26.21 $ 29.23 $ 25.73 (Net assets/shares) ($2,852,237/108,814) ($88,608/3,032) ($126,647/4,923) Maximum offering price per share - Class A (b) $ 27.81 $ 31.01 $ 27.30 (Net asset value per share/ front-end sales charge) ($26.21/0.9425) ($29.23/0.9425) ($25.73/0.9425) Net asset value and offering price per share - Class B (a) $ 25.37 $ 28.74 $ 24.97 (Net assets/shares) ($1,365,518/53,831) ($60,364/2,100) ($71,766/2,874) Net asset value and offering price per share - Class C (a) $ 25.35 $ 28.73 $ 24.96 (Net assets/shares) ($1,102,416/43,491) ($35,220/1,226) ($41,376/1,657) Net asset value and offering price per share - Class Z (a) $ 26.79 $ 29.46 $ 26.21 (Net assets/shares) ($9,182,636/342,777) ($2,084,065/70,732) ($754,610/28,787)
COLUMBIA COLUMBIA ACORN ACORN JUNE 30, 2005 INTERNATIONAL SELECT SELECT ------------------------------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS: Unaffiliated investments, at cost $ 57,081 $ 1,200,652 Affiliated investments, at cost (See Note 4) -- 71,464 ------------------------------------------------------------------------------------------------------- Unaffiliated investments, at value $ 71,724 $ 1,451,335 Affiliated investments, at value (See Note 4) -- 41,800 Cash 1 1 Foreign currency (cost: Columbia Acorn Fund $2,163; Columbia Acorn International $1,853; Columbia Acorn International Select $44) 44 -- Receivable for: Investments sold -- 12,593 Fund shares sold 101 8,263 Dividends and interest 90 242 Payment on a liquidated security -- -- Foreign tax reclaims 39 -- Deferred Trustees' Compensation Investments -- -- ------------------------------------------------------------------------------------------------------- Total Assets 71,999 1,514,234 LIABILITIES: Expense reimbursement due to Investment Adviser 1 -- Payable for: Investments purchased 149 436 Fund shares redeemed 9 1,555 Management fee 55 971 Administration fee 2 52 12b-1 Service & Distribution fees 7 381 Reports to shareholders 37 205 Deferred Trustees' fees 12 47 Transfer agent fees 5 63 Trustees' fees 3 -- Custody fees -- 3 Deferred foreign capital gains tax payable -- -- Other liabilities 9 29 ------------------------------------------------------------------------------------------------------- Total Liabilities 289 3,742 ------------------------------------------------------------------------------------------------------- NET ASSETS $ 71,710 $ 1,510,492 ======================================================================================================= COMPOSITION OF NET ASSETS: Paid in capital $ 88,128 $ 1,260,521 Undistributed (Overdistributed) net investment income (Accumulated net investment loss) (554) (3,585) Accumulated net realized gain (loss) (30,502) 32,537 Net unrealized appreciation (depreciation) on: Investments 14,643 221,019 Foreign currency translations (5) -- Foreign capital gains tax -- -- Liquidated security -- -- ------------------------------------------------------------------------------------------------------- NET ASSETS $ 71,710 $ 1,510,492 ======================================================================================================= Net asset value per share - Class A (a) $ 17.69 $ 20.68 (Net assets/shares) ($6,175/349) ($638,215/30,866) Maximum offering price per share - Class A (b) $ 18.77 $ 21.94 (Net asset value per share/ front-end sales charge) ($17.69/0.9425) ($20.68/0.9425) Net asset value and offering price per share - Class B (a) $ 17.25 $ 20.01 (Net assets/shares) ($5,779/335) ($193,930/9,693) Net asset value and offering price per share - Class C (a) $ 17.26 $ 20.00 (Net assets/shares) ($3,246/188) ($129,129/6,457) Net asset value and offering price per share - Class Z (a) $ 17.84 $ 20.97 (Net assets/shares) ($56,510/3,168) ($549,218/26,192)
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge and/or applicable redemption fee. (b) On sales of $50,000 or more the offering price is reduced. * Rounds to less than $500. See accompanying notes to financial statements. 1-800-922-6769 58 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005
COLUMBIA COLUMBIA COLUMBIA COLUMBIA ACORN COLUMBIA ACORN ACORN ACORN INTERNATIONAL ACORN (IN THOUSANDS) FUND INTERNATIONAL USA SELECT SELECT -------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income $ 71,373 $ 31,907 $ 5,871 $ 1,004 $ 3,502 Dividend income from affiliates (See Note 4) 14,830 -- -- -- -- Interest income 14,191 1,190 1,165 53 1,789 -------------------------------------------------------------------------------------------------------------------------------- 100,394 33,097 7,036 1,057 5,291 Foreign taxes withheld (3,008) (2,545) (6) (94) -- -------------------------------------------------------------------------------------------------------------------------------- Total Investment Income 97,386 30,552 7,030 963 5,291 EXPENSES: Management fee 44,457 8,705 4,040 315 5,556 Administration fee 2,969 471 193 14 287 12b-1 Service and Distribution fees: Class A 3,343 99 143 7 686 Class B 5,677 244 295 23 772 Class C 5,276 164 193 14 569 Transfer agent fees: Class A 1,039 45 57 4 247 Class B 1,134 67 66 9 200 Class C 640 26 26 3 91 Class Z 1,293 639 122 33 200 Custody fees 826 787 16 30 19 Trustees' fees 323 53 21 20 65 Registration & blue sky fees 538 208 94 33 118 Compliance fees 259 40 16 1 24 Non-recurring costs (See Note 8) 85 13 6 --* 8 Other expenses 1,969 281 146 42 224 -------------------------------------------------------------------------------------------------------------------------------- Total expenses 69,828 11,842 5,434 548 9,066 Less custody fees paid indirectly (18) (1) (2) --* (4) Less reimbursement of expenses by Investment Adviser -- -- -- (7) -- Less expenses waived by Investment Adviser (395) (39) (16) (1) (117) Less reimbursement of expenses by Transfer Agent (785) (200) (51) (11) (118) Non-recurring costs reimbursed (See Note 8) (85) (13) (6) --* (8) -------------------------------------------------------------------------------------------------------------------------------- Net Expenses 68,545 11,589 5,359 529 8,819 -------------------------------------------------------------------------------------------------------------------------------- Net Investment Income (Loss) 28,841 18,963 1,671 434 (3,528) NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS: Net realized gain (loss) on: Unaffiliated investments 440,635 106,812 30,997 664 32,796 Affiliated investments (See Note 4) 1,653 -- -- -- -- Foreign currency transactions (344) (638) -- (15) -- -------------------------------------------------------------------------------------------------------------------------------- Net realized gain 441,944 106,174 30,997 649 32,796 ================================================================================================================================ Net change in net unrealized appreciation (depreciation) on: Unaffiliated investments (50,748) (64,434) 19,017 (885) 1 Affiliated investments (See Note 4) (41,103) -- (622) -- (22,985) Foreign currency translations (499) (527) -- (7) -- Foreign capital gains tax -- (3) -- -- -- Liquidated security 161 -- 54 -- -- -------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) (92,189) (64,964) 18,449 (892) (22,984) ================================================================================================================================ Net realized and unrealized gain (loss) 349,755 41,210 49,446 (243) 9,812 -------------------------------------------------------------------------------------------------------------------------------- Net Increase in Net Assets resulting from Operations $ 378,596 $ 60,173 $ 51,117 $ 191 $ 6,284 ================================================================================================================================
* Rounds to less than $500. See accompanying notes to financial statements. 59 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, --------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 OPERATIONS: Net investment income (loss) $ 28,841 $ (13,051) $ 18,963 $ 16,703 Net realized gain on investments and foreign currency transactions 441,944 693,184 106,174 175,881 Net change in net unrealized appreciation (depreciation) on investments, foreign currency translations, foreign capital gains tax and liquidated security (92,189) 1,701,999 (64,964) 276,935 --------------------------------------------------------------------------------------------------------------------- Net Increase from Operations 378,596 2,382,132 60,173 469,519 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (966) (374) Net realized gain -- Class A (41,222) (89,952) -- -- Net investment income -- Class B -- -- (281) (75) Net realized gain -- Class B (20,635) (49,011) -- -- Net investment income -- Class C -- -- (172) (42) Net realized gain -- Class C (16,577) (37,671) -- -- Net investment income -- Class Z -- (5,620) (29,780) (16,439) Net realized gain -- Class Z (130,799) (290,184) -- -- --------------------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders (209,233) (472,438) (31,199) (16,930) SHARE TRANSACTIONS: Subscriptions -- Class A 415,008 703,271 22,421 19,736 Distributions reinvested -- Class A 37,158 81,405 785 306 Redemptions -- Class A (302,648) (453,387) (6,328) (17,531) --------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 149,518 331,289 16,878 2,511 Subscriptions -- Class B 27,942 90,732 9,579 10,422 Distributions reinvested -- Class B 18,804 44,616 247 66 Redemptions -- Class B (89,021) (146,696) (5,267) (7,152) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (42,275) (11,348) 4,559 3,336 Subscriptions -- Class C 78,997 145,878 6,602 8,030 Distributions reinvested -- Class C 13,377 30,636 141 35 Redemptions -- Class C (80,206) (136,434) (2,650) (6,936) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 12,168 40,080 4,093 1,129 Subscriptions -- Class Z 805,490 1,596,519 278,879 206,434 Distributions reinvested -- Class Z 112,557 254,191 23,508 14,669 Redemptions -- Class Z (545,473) (1,447,781) (163,679) (284,074) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 372,574 402,929 138,708 (62,971) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 491,985 762,950 164,238 (55,995) --------------------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 33 86 --------------------------------------------------------------------------------------------------------------------- Total Increase in Net Assets 661,348 2,672,644 193,245 396,680 NET ASSETS: Beginning of period 13,841,459 11,168,815 2,075,012 1,678,332 --------------------------------------------------------------------------------------------------------------------- End of period $ 14,502,807 $ 13,841,459 $ 2,268,257 $ 2,075,012 ===================================================================================================================== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 7,920 $ (20,921) $ 3,915 $ 16,151 =====================================================================================================================
COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, --------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 OPERATIONS: Net investment income (loss) $ 1,671 $ (6,571) $ 434 $ 51 Net realized gain on investments and foreign currency transactions 30,997 28,245 649 7,208 Net change in net unrealized appreciation (depreciation) on investments, foreign currency translations, foreign capital gains tax and liquidated security 18,449 121,948 (892) 2,762 --------------------------------------------------------------------------------------------------------------------- Net Increase from Operations 51,117 143,622 191 10,021 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- (79) (6) Net realized gain -- Class A (1,741) (622) -- -- Net investment income -- Class B -- -- (46) -- Net realized gain -- Class B (1,039) (415) -- -- Net investment income -- Class C -- -- (24) -- Net realized gain -- Class C (592) (224) -- -- Net investment income -- Class Z -- -- (888) (151) Net realized gain -- Class Z (10,141) (3,487) -- -- --------------------------------------------------------------------------------------------------------------------- Total Distribution to Shareholders (13,513) (4,748) (1,037) (157) SHARE TRANSACTIONS: Subscriptions -- Class A 20,621 27,362 2,233 1,860 Distributions reinvested -- Class A 1,590 572 71 5 Redemptions -- Class A (12,727) (22,954) (408) (763) --------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 9,484 4,980 1,896 1,102 Subscriptions -- Class B 1,922 4,936 1,294 1,664 Distributions reinvested -- Class B 948 375 41 -- Redemptions -- Class B (6,087) (10,452) (614) (586) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (3,217) (5,141) 721 1,078 Subscriptions -- Class C 3,125 5,707 1,001 786 Distributions reinvested -- Class C 490 187 20 -- Redemptions -- Class C (3,206) (8,114) (291) (2,429) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 409 (2,220) 730 (1,643) Subscriptions -- Class Z 111,981 199,048 13,951 11,787 Distributions reinvested -- Class Z 8,943 3,134 582 146 Redemptions -- Class Z (41,487) (161,267) (3,618) (7,456) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 79,437 40,915 10,915 4,477 --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 86,113 38,534 14,262 5,014 --------------------------------------------------------------------------------------------------------------------- Redemption Fees -- -- 6 4 --------------------------------------------------------------------------------------------------------------------- Total Increase in Net Assets 123,717 177,408 13,422 14,882 NET ASSETS: Beginning of period 870,682 693,274 58,288 43,406 --------------------------------------------------------------------------------------------------------------------- End of period $ 994,399 $ 870,682 $ 71,710 $ 58,288 ===================================================================================================================== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ 1,568 $ (103) $ (554) $ 49 =====================================================================================================================
COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS ENDED YEAR ENDED INCREASE (DECREASE) IN NET ASSETS JUNE 30, DECEMBER 31, ----------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 OPERATIONS: Net investment income (loss) $ (3,528) $ (8,994) Net realized gain on investments and foreign currency transactions 32,796 47,420 Net change in net unrealized appreciation (depreciation) on investments, foreign currency translations, foreign capital gains tax and liquidated security (22,984) 133,791 ----------------------------------------------------------------------------------- Net Increase from Operations 6,284 172,217 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- -- Net realized gain -- Class A (2,737) (10,300) Net investment income -- Class B -- -- Net realized gain -- Class B (885) (3,895) Net investment income -- Class C -- -- Net realized gain -- Class C (576) (2,321) Net investment income -- Class Z -- -- Net realized gain -- Class Z (3,269) (8,700) ----------------------------------------------------------------------------------- Total Distribution to Shareholders (7,467) (25,216) SHARE TRANSACTIONS: Subscriptions -- Class A 185,756 274,350 Distributions reinvested -- Class A 2,555 9,614 Redemptions -- Class A (66,604) (91,343) ----------------------------------------------------------------------------------- Net Increase -- Class A 121,707 192,621 Subscriptions -- Class B 21,878 61,755 Distributions reinvested -- Class B 795 3,496 Redemptions -- Class B (12,553) (19,113) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B 10,120 46,138 Subscriptions -- Class C 32,636 49,173 Distributions reinvested -- Class C 473 1,934 Redemptions -- Class C (13,807) (17,236) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 19,302 33,871 Subscriptions -- Class Z 180,330 204,740 Distributions reinvested -- Class Z 2,389 6,716 Redemptions -- Class Z (79,260) (114,619) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 103,459 96,837 ----------------------------------------------------------------------------------- Net Increase (Decrease) from Share Transactions 254,588 369,467 ----------------------------------------------------------------------------------- Redemption Fees -- -- ----------------------------------------------------------------------------------- Total Increase in Net Assets 253,405 516,468 NET ASSETS: Beginning of period 1,257,087 740,619 ----------------------------------------------------------------------------------- End of period $ 1,510,492 $ 1,257,087 =================================================================================== UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME OR (ACCUMULATED NET INVESTMENT LOSS) $ (3,585) $ (57) ===================================================================================
See accompanying notes to financial statements. Spread 60-61 COLUMBIA ACORN FAMILY OF FUNDS >STATEMENTS OF CHANGES IN NET ASSETS, CONTINUED
COLUMBIA COLUMBIA ACORN ACORN FUND INTERNATIONAL (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, --------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 Subscriptions -- Class A 16,259 29,671 765 809 Shares issued in reinvestment and capital gains -- Class A 1,446 3,255 27 13 Less shares redeemed -- Class A (11,869) (19,230) (215) (722) --------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 5,836 13,696 577 100 Subscriptions -- Class B 1,130 3,928 332 438 Shares issued in reinvestment and capital gains -- Class B 756 1,836 8 3 Less shares redeemed -- Class B (3,599) (6,388) (183) (301) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (1,713) (624) 157 140 Subscriptions -- Class C 3,191 6,282 229 333 Shares issued in reinvestment and capital gains -- Class C 538 1,261 5 2 Less shares redeemed -- Class C (3,242) (5,916) (92) (293) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 487 1,627 142 42 Subscriptions -- Class Z 30,921 66,041 9,414 8,246 Shares issued in reinvestment and capital gains -- Class Z 4,286 9,967 805 624 Less shares redeemed -- Class Z (20,944) (60,621) (5,589) (11,723) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 14,263 15,387 4,630 (2,853) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 18,873 30,086 5,506 (2,571) ---------------------------------------------------------------------------------------------------------------------
COLUMBIA COLUMBIA ACORN ACORN USA INTERNATIONAL SELECT (UNAUDITED) (UNAUDITED) SIX MONTHS SIX MONTHS ENDED YEAR ENDED ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, --------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 2005 2004 Subscriptions -- Class A 835 1,239 124 116 Shares issued in reinvestment and capital gains -- Class A 63 24 4 --* Less shares redeemed -- Class A (517) (1,043) (23) (49) --------------------------------------------------------------------------------------------------------------------- Net Increase -- Class A 381 220 105 67 Subscriptions -- Class B 80 229 74 108 Shares issued in reinvestment and capital gains -- Class B 39 16 2 -- Less shares redeemed -- Class B (255) (485) (35) (38) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B (136) (240) 41 70 Subscriptions -- Class C 129 261 58 52 Shares issued in reinvestment and capital gains -- Class C 20 8 1 -- Less shares redeemed -- Class C (134) (379) (17) (167) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 15 (110) 42 (115) Subscriptions -- Class Z 4,462 8,912 768 707 Shares issued in reinvestment and capital gains -- Class Z 349 128 33 10 Less shares redeemed -- Class Z (1,659) (7,291) (202) (479) --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 3,152 1,749 599 238 --------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 3,412 1,619 787 260 ---------------------------------------------------------------------------------------------------------------------
COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS ENDED YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: JUNE 30, DECEMBER 31, ----------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 Subscriptions -- Class A 9,331 14,418 Shares issued in reinvestment and capital gains -- Class A 126 473 Less shares redeemed -- Class A (3,358) (4,824) ----------------------------------------------------------------------------------- Net Increase -- Class A 6,099 10,067 Subscriptions -- Class B 1,133 3,336 Shares issued in reinvestment and capital gains -- Class B 41 177 Less shares redeemed -- Class B (653) (1,035) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class B 521 2,478 Subscriptions -- Class C 1,692 2,649 Shares issued in reinvestment and capital gains -- Class C 24 98 Less shares redeemed -- Class C (718) (929) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C 998 1,818 Subscriptions -- Class Z 8,931 10,606 Shares issued in reinvestment and capital gains -- Class Z 116 326 Less shares redeemed -- Class Z (3,928) (5,997) ----------------------------------------------------------------------------------- Net Increase (Decrease) -- Class Z 5,119 4,935 ----------------------------------------------------------------------------------- Net Increase (Decrease) in Shares of Beneficial Interest 12,737 19,298 -----------------------------------------------------------------------------------
* Rounds to less than 500 shares. 1-800-922-6769 See accompanying notes to financial statements. Spread 62-63 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 25.93 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.05 Net realized and unrealized gain (loss) 0.62 ------------------------------------------------------------------ Total from Investment Operations 0.67 ------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.39) ------------------------------------------------------------------ Total Distributions Declared to Shareholders (0.39) ------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 26.21 ================================================================== Total Return (c) 2.60%(d)(e) ------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.06%(g) Net investment income (loss) (f) 0.36%(g) Reimbursement 0.02%(g) Portfolio turnover rate 8%(e) Net assets at end of period (000'S) $ 2,852,237
COLUMBIA ACORN FUND CLASS A SHARES 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 $ 22.20 $ 15.34 $ 17.80 $ 17.19 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.05) (0.07) (0.07) (0.05) 0.01 Net realized and unrealized gain (loss) 4.69 6.95 (2.39) 1.01 1.22 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.64 6.88 (2.46) 0.96 1.23 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.06) From net realized gains (0.91) (0.02) -- (0.35) (1.86) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.93 $ 22.20 $ 15.34 $ 17.80 $ 17.19 ====================================================================================================================== Total Return (c) 21.05%(d) 44.85% (13.82)% 5.56% 7.40%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.20% 1.33% 1.42% 1.42% 1.25%(g)(h) Net investment income (loss) (f) (0.21)% (0.36)% (0.45)% (0.33)% 0.17%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 20% 10% 13% 20% 29% Net assets at end of period (000'S) $2,669,936 $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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.03% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 25.19 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.04) Net realized and unrealized gain (loss) 0.61 --------------------------------------------------------------------- Total from Investment Operations 0.57 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.39) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.39) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.37 ===================================================================== Total Return (c) 2.28%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.75%(g) Net investment loss (f) (0.33)%(g) Reimbursement 0.02%(g) Portfolio turnover rate 8%(e) Net assets at end of period (000'S) $ 1,365,518
CLASS B SHARES 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 $ 21.75 $ 15.13 $ 17.67 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.22) (0.18) (0.17) (0.16) (0.01) Net realized and unrealized gain (loss) 4.57 6.82 (2.37) 1.01 1.22 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.35 6.64 (2.54) 0.85 1.21 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.06) From net realized gains (0.91) (0.02) -- (0.35) (1.86) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.19 $ 21.75 $ 15.13 $ 17.67 $ 17.17 ====================================================================================================================== Total Return (c) 20.15%(d) 43.89% (14.37)% 4.92% 7.27%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h) Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 20% 10% 13% 20% 29% Net assets at end of period (000'S) $1,399,135 $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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.68% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 25.18 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.05) Net realized and unrealized gain (loss) 0.61 --------------------------------------------------------------------- Total from Investment Operations 0.56 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.39) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.39) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.35 ===================================================================== Total Return (c) 2.24%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.85%(g) Net investment loss (f) (0.44)%(g) Reimbursement 0.02%(g) Portfolio turnover rate 8%(e) Net assets at end of period (000'S) $ 1,102,416
CLASS C SHARES 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 $ 21.75 $ 15.12 $ 17.66 $ 17.17 $ 17.88 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.22) (0.18) (0.17) (0.17) (0.01) Net realized and unrealized gain (loss) 4.56 6.83 (2.37) 1.01 1.22 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.34 6.65 (2.54) 0.84 1.21 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.06) From net realized gains (0.91) (0.02) -- (0.35) (1.86) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.91) (0.02) -- (0.35) (1.92) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.18 $ 21.75 $ 15.12 $ 17.66 $ 17.17 ====================================================================================================================== Total Return (c) 20.11%(d) 43.99% (14.38)% 4.86% 7.27%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.95% 1.98% 2.07% 2.07% 1.90%(g)(h) Net investment loss (f) (0.96)% (1.01)% (1.10)% (0.98)% (0.48)%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 20% 10% 13% 20% 29% Net assets at end of period (000'S) $1,083,006 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.68% and (0.26)% respectively, were revised to reflect all class specific expenses in this period. See accompanying notes to financial statements. 1-800-922-6769 64 COLUMBIA ACORN INTERNATIONAL (UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, --------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 28.75 INCOME FROM INVESTMENT OPERATIONS Net investment income (b) 0.22 Net realized and unrealized gain (loss) 0.59 --------------------------------------------------------------------- Total from Investment Operations 0.81 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.33) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.33) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 29.23 ===================================================================== Total Return (c) 2.83%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.31%(g) Net investment income (f) 1.49%(g) Reimbursement 0.02%(g) Portfolio turnover rate 15%(e) Net assets at end of period (000'S) $ 88,608
COLUMBIA ACORN INTERNATIONAL CLASS A SHARES 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 $ 22.45 $ 15.32 $ 18.35 $ 23.84 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (b) 0.14 0.10 0.05 0.01 0.02 Net realized and unrealized gain (loss) 6.31 7.08 (3.07) (5.11) (1.26) ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 6.45 7.18 (3.02) (5.10) (1.24) ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.15) (0.05) (0.01) -- -- From net realized gains -- -- -- (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.15) (0.05) (0.01) (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 28.75 $ 22.45 $ 15.32 $ 18.35 $ 23.84 ====================================================================================================================== Total Return (c) 28.91%(d) 46.94% (16.46)% (21.59)% (4.85)%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.48% 1.59% 1.56% 1.65% 1.26%(g)(h) Net investment income (f) 0.61% 0.57% 0.30% 0.03% 0.73%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 40% 40% 52% 45% 63% Net assets at end of period (000'S) $ 70,582 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.59% and 0.40% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 28.18 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.11 Net realized and unrealized gain (loss) 0.59 --------------------------------------------------------------------- Total from Investment Operations 0.70 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.14) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 28.74 ===================================================================== Total Return (c) 2.47%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.03%(g) Net investment income (loss) (f) 0.77%(g) Reimbursement 0.02%(g) Portfolio turnover rate 15%(e) Net assets at end of period (000'S) $ 60,364
CLASS B SHARES 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 $ 22.07 $ 15.11 $ 18.22 $ 23.81 $ 28.67 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.04) (0.02) (0.06) (0.12) 0.01 Net realized and unrealized gain (loss) 6.19 6.98 (3.05) (5.08) (1.28) ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 6.15 6.96 (3.11) (5.20) (1.27) ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) -- -- -- -- From net realized gains -- -- -- (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 28.18 $ 22.07 $ 15.11 $ 18.22 $ 23.81 ====================================================================================================================== Total Return (c) 27.91%(d) 46.06% (17.07)% (22.04)% (4.97)%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.27% 2.24% 2.21% 2.30% 1.91%(g)(h) Net investment income (loss) (f) (0.18)% (0.10)% (0.35)% (0.62)% 0.08%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 40% 40% 52% 45% 63% Net assets at end of period (000'S) $ 54,752 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 2.24% and (0.25)% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 28.19 Income from Investment Operations Net investment income (loss) (b) 0.10 Net realized and unrealized gain (loss) 0.58 --------------------------------------------------------------------- Total from Investment Operations 0.68 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.14) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 28.73 ===================================================================== Total Return (c) 2.43%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.10%(g) Net investment income (loss) (f) 0.69%(g) Reimbursement 0.02%(g) Portfolio turnover rate 15%(e) Net assets at end of period (000'S) $ 35,220
CLASS C SHARES 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 $ 22.06 $ 15.11 $ 18.21 $ 23.81 $ 28.67 Income from Investment Operations Net investment income (loss) (b) (0.03) (0.01) (0.06) (0.13) 0.01 Net realized and unrealized gain (loss) 6.20 6.96 (3.04) (5.08) (1.28) ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 6.17 6.95 (3.10) (5.21) (1.27) ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.04) -- -- -- -- From net realized gains -- -- -- (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.04) -- -- (0.39) (3.59) ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 28.19 $ 22.06 $ 15.11 $ 18.21 $ 23.81 ====================================================================================================================== Total Return (c) 28.01%(d) 46.00% (17.02)% (22.08)% (4.97)%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.24% 2.24% 2.21% 2.30% 1.91%(g)(h) Net investment income (loss) (f) (0.15)% (0.06)% (0.35)% (0.62)% 0.08%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 40% 40% 52% 45% 63% Net assets at end of period (000'S) $ 30,547 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 2.24% and (0.25)% respectively, were revised to reflect all class specific expenses in this period. 65 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 24.77 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.03 Net realized and unrealized gain (loss) 1.29 --------------------------------------------------------------------- Total from Investment Operations 1.32 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.36) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.36) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 25.73 ===================================================================== Total Return (c) 5.38%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.34%(g) Net investment income (loss) (f) 0.23%(g) Reimbursement 0.01%(g) Portfolio turnover rate 7%(e) Net assets at end of period (000'S) $ 126,647
COLUMBIA ACORN USA CLASS A SHARES 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 $ 20.74 $ 14.18 $ 17.50 $ 14.88 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.24) (0.22) (0.19) (0.19) (0.01) Net realized and unrealized gain (loss) 4.41 6.78 (3.13) 2.96 1.06 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 4.17 6.56 (3.32) 2.77 1.05 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.14) -- -- (0.15) -- ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) -- -- (0.15) -- ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.77 $ 20.74 $ 14.18 $ 17.50 $ 14.88 ====================================================================================================================== Total Return (c) 20.12%(d) 46.26% (18.97)% 18.65% 7.59%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 1.51% 1.65% 1.74% 1.84% 1.41%(g)(h) Net investment income (loss) (f) (1.08)% (1.26)% (1.21)% (1.13)% (0.73)%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 18% 7% 31% 24% 45% Net assets at end of period (000'S) $ 112,509 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.17% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 24.14 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.06) Net realized and unrealized gain (loss) 1.25 --------------------------------------------------------------------- Total from Investment Operations 1.19 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.36) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.36) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.97 ===================================================================== Total Return (c) 4.98%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.03%(g) Net investment loss (f) (0.51)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 7%(e) Net assets at end of period (000'S) $ 71,766
CLASS B SHARES 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 $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.14) -- -- (0.13) -- ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) -- -- (0.13) -- ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87 ====================================================================================================================== Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h) Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 18% 7% 31% 24% 45% Net assets at end of period (000'S) $ 72,643 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.82% 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 24.14 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.07) Net realized and unrealized gain (loss) 1.25 --------------------------------------------------------------------- Total from Investment Operations 1.18 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.36) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.36) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.96 ===================================================================== Total Return (c) 4.94%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.13%(g) Net investment loss (f) (0.59)%(g) Reimbursement 0.01%(g) Portfolio turnover rate 7%(e) Net assets at end of period (000'S) $ 41,376
CLASS C SHARES 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 $ 20.36 $ 14.01 $ 17.40 $ 14.87 $ 13.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.39) (0.32) (0.29) (0.30) (0.03) Net realized and unrealized gain (loss) 4.31 6.67 (3.10) 2.96 1.07 ---------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.92 6.35 (3.39) 2.66 1.04 ---------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net realized gains (0.14) -- -- (0.13) -- ---------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) -- -- (0.13) -- ---------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 24.14 $ 20.36 $ 14.01 $ 17.40 $ 14.87 ====================================================================================================================== Total Return (c) 19.26%(d) 45.32% (19.48)% 17.92% 7.52%(e) ---------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.23% 2.30% 2.39% 2.49% 2.06%(g)(h) Net investment loss (f) (1.80)% (1.91)% (1.86)% (1.78)% (1.38)%(g)(h) Reimbursement 0.02% -- -- -- -- Portfolio turnover rate 18% 7% 31% 24% 45% Net assets at end of period (000'S) $ 39,643 $ 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) Had the Investment Advisor and/or Transfer Agent not waived and/or 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 1.82% and (1.14)% respectively, were revised to reflect all class specific expenses in this period. 1-800-922-6769 See accompanying notes to financial statements. 66 COLUMBIA ACORN INTERNATIONAL SELECT (UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, --------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.85 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.11 Net realized and unrealized gain (loss) (0.03) --------------------------------------------------------------------- Total from Investment Operations 0.08 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.24) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.24) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.69 ===================================================================== Total Return (d) 0.44%(e)(f) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (g) 1.70%(h) Net investment income (loss) (g) 1.24%(h) Reimbursement 0.07%(h) Portfolio turnover rate 13%(f) Net assets at end of period (000'S) $ 6,175
COLUMBIA ACORN INTERNATIONAL SELECT CLASS A SHARES 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 $ 14.45 $ 10.24 $ 12.07 $ 17.15 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.00(c) 0.03 (0.01) (0.09) (0.03) Net realized and unrealized gain (loss) 3.43 4.18 (1.82) (4.90) (0.53) --------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.43 4.21 (1.83) (4.99) (0.56) --------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.03) -- -- (0.01) -- From net realized gains -- -- -- (0.08) -- --------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.03) -- -- (0.09) -- --------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.85 $ 14.45 $ 10.24 $ 12.07 $ 17.15 =========================================================================================================================== Total Return (d) 23.76%(e) 41.11%(e) (15.16)%(e) (29.17)%(e) (3.16)%(f) --------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (g) 1.75% 1.80% 1.80% 1.80% 1.68%(h)(i) Net investment income (loss) (g) (0.03)% 0.24% (0.09)% (0.67)% (1.18)%(h)(i) Reimbursement 0.37% 0.44% 0.33% 0.23% -- Portfolio turnover rate 73% 69% 102% 82% 79% Net assets at end of period (000'S) $ 4,357 $ 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) Rounds to less than $0.01 per share. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor and/or Transfer Agent not waived and/or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. (i) 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.36 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.05 Net realized and unrealized gain (loss) (0.02) --------------------------------------------------------------------- Total from Investment Operations 0.03 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.14) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.14) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.25 ===================================================================== Total Return (c) 0.17%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.30%(g) Net investment income (loss) (f) 0.52%(g) Reimbursement 0.24%(g) Portfolio turnover rate 13%(e) Net assets at end of period (000'S) $ 5,779
CLASS B SHARES 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 $ 14.12 $ 10.08 $ 11.96 $ 17.13 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.10) (0.06) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 3.34 4.10 (1.80) (4.90) (0.53) --------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.24 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 $ 17.36 $ 14.12 $ 10.08 $ 11.96 $ 17.13 =========================================================================================================================== Total Return (c) 22.95%(d) 40.08%(d) (15.72)%(d) (29.73)%(d) (3.27)%(e) --------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.38% 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment income (loss) (f) (0.66)% (0.52)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.58% 0.44% 0.33% 0.23% -- Portfolio turnover rate 73% 69% 102% 82% 79% Net assets at end of period (000'S) $ 5,097 $ 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 Investment Advisor and/or Transfer Agent not waived and/or 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 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.38 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) 0.04 Net realized and unrealized gain (loss) (0.03) --------------------------------------------------------------------- Total from Investment Operations 0.01 --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income (0.13) From net realized gains -- --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.13) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 17.26 ===================================================================== Total Return (c) 0.05%(d)(e) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.45%(g) Net investment income (loss) (f) 0.48%(g) Reimbursement 0.12%(g) Portfolio turnover rate 13%(e) Net assets at end of period (000'S) $ 3,246
CLASS C SHARES 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 $ 14.14 $ 10.09 $ 11.97 $ 17.14 $ 17.71 INCOME FROM INVESTMENT OPERATIONS Net investment income (loss) (b) (0.11) (0.05) (0.08) (0.18) (0.05) Net realized and unrealized gain (loss) 3.35 4.10 (1.80) (4.90) (0.52) --------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.24 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 $ 17.38 $ 14.14 $ 10.09 $ 11.97 $ 17.14 =========================================================================================================================== Total Return (c) 22.91%(d) 40.14%(d) (15.71)%(d) (29.71)%(d) (3.22)%(e) --------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f) 2.45% 2.45% 2.45% 2.45% 2.33%(g)(h) Net investment income (loss) (f) (0.73)% (0.41)% (0.74)% (1.32)% (1.83)%(g)(h) Reimbursement 0.35% 0.44% 0.33% 0.23% -- Portfolio turnover rate 73% 69% 102% 82% 79% Net assets at end of period (000'S) $ 2,543 $ 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 Investment Advisor and/or Transfer Agent not waived and/or 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. 67 COLUMBIA ACORN FAMILY OF FUNDS >FINANCIAL HIGHLIGHTS, CONTINUED COLUMBIA ACORN SELECT (UNAUDITED) SIX MONTHS CLASS A SHARES ENDED JUNE 30, --------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.83 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.04) Net realized and unrealized gain (loss) (0.02)(c) --------------------------------------------------------------------- Total from Investment Operations (0.06) --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.09) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.09) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.68 ===================================================================== Total Return (d) (0.27)%(e)(f) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 1.25%(g)(h) Net investment loss (0.45)%(g)(h) Reimbursement 0.04%(h) Portfolio turnover rate 14%(f) Net assets at end of period (000'S) $ 638,215
COLUMBIA ACORN SELECT CLASS A SHARES 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) (0.16) (0.20) (0.16) (0.10) (0.01) Net realized and unrealized gain (loss) 3.42 4.37 (1.08) 1.18 0.86 ------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.26 4.17 (1.24) 1.08 0.85 ------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains (0.44) (0.09) -- (0.03) (0.19) ------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20) ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.83 $ 18.01 $ 13.93 $ 15.17 $ 14.12 ========================================================================================================================= Total Return (d) 18.16%(e) 29.95% (8.17)%(e) 7.65%(e) 6.32%(f) ------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 1.47%(g) 1.63%(g) 1.70%(g) 1.70% 1.61%(g)(h)(i) Net investment loss (0.86)%(g) (1.15)%(g) (1.11)%(g (0.79)% (0.62)%(g)(h)(i) Reimbursement 0.02% -- 0.10% 0.18% -- Portfolio turnover rate 34% 16% 40% 82% 116% Net assets at end of period (000'S) $ 515,842 $ 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) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments in the Fund. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor and/or Transfer Agent not waived and/or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. (i) 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, --------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.23 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.11) Net realized and unrealized gain (loss) (0.02)(c) --------------------------------------------------------------------- Total from Investment Operations (0.13) --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.09) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.09) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.01 ===================================================================== Total Return (d) (0.62)%(e)(f) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 1.98%(g)(h) Net investment loss (1.18)%(g)(h) Reimbursement 0.04%(h) Portfolio turnover rate 14%(f) Net assets at end of period (000'S) $ 193,930
CLASS B SHARES 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) (0.31) (0.29) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 3.34 4.29 (1.07) 1.18 0.84 ------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83 ------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains (0.44) (0.09) -- (0.03) (0.19) ------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20) ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10 ========================================================================================================================= Total Return (d) 17.24%(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(f) ------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 2.26%(g) 2.28%(g) 2.35%(g) 2.35% 2.26%(g)(h)(i) Net investment loss (1.65)%(g) (1.80)%(g) (1.76)%(g) (1.44)% (1.27)%(g)(h)(i) Reimbursement 0.02% -- 0.10% 0.18% -- Portfolio turnover rate 34% 16% 40% 82% 116% Net assets at end of period (000'S) $ 185,545 $ 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) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments in the Fund. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor and/or Transfer Agent not waived and/or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. (i) 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, --------------------------------------------------------------------- SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 NET ASSET VALUE, BEGINNING OF PERIOD $ 20.23 INCOME FROM INVESTMENT OPERATIONS Net investment loss (b) (0.12) Net realized and unrealized gain (loss) (0.02)(c) --------------------------------------------------------------------- Total from Investment Operations (0.14) --------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- From net realized gains (0.09) --------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.09) --------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.00 ===================================================================== Total Return (d) (0.67)%(e)(f) --------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 2.07%(g)(h) Net investment loss (1.28)%(g)(h) Reimbursement 0.04%(h) Portfolio turnover rate 14%(f) Net assets at end of period (000'S) $ 129,129
CLASS C SHARES 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) (0.30) (0.30) (0.25) (0.20) (0.01) Net realized and unrealized gain (loss) 3.33 4.30 (1.07) 1.18 0.84 ------------------------------------------------------------------------------------------------------------------------- Total from Investment Operations 3.03 4.00 (1.32) 0.98 0.83 ------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- -- -- -- (0.01) From net realized gains (0.44) (0.09) -- (0.03) (0.19) ------------------------------------------------------------------------------------------------------------------------- Total Distributions Declared to Shareholders (0.44) (0.09) -- (0.03) (0.20) ------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 20.23 $ 17.64 $ 13.73 $ 15.05 $ 14.10 ========================================================================================================================= Total Return (d) 17.24%(e) 29.14% (8.77)%(e) 6.95%(e) 6.17%(f) ------------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses 2.25%(g) 2.28%(g) 2.35%(g) 2.35% 2.26%(g)(h)(i) Net investment loss (1.64)%(g (1.80)%(g) (1.76)%(g) (1.44)% (1.27)%(g)(h)(i) Reimbursement 0.02% -- 0.10% 0.18% -- Portfolio turnover rate 34% 16% 40% 82% 116% Net assets at end of period (000'S) $ 110,435 $ 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) The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of repurchases of Fund shares in relation to fluctuating market values of the investments in the Fund. (d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales charge. (e) Had the Investment Advisor and/or Transfer Agent not waived and/or reimbursed a portion of expenses, total return would have been reduced. (f) Not annualized. (g) The benefits derived from custody fees paid indirectly had no impact. (h) Annualized. (i) 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. 1-800-922-6769 See accompanying notes to financial statements. 68 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 each a 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. Effective January 3, 2005, Columbia Acorn International and Columbia Acorn International Select imposed a 2% redemption fee on Class A, Class B and Class C shares that are owned 60 days or less. See "Fund Policy on Trading of Fund Shares and Redemption Fees" as disclosed within the Funds' prospectus for more information. 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 A, Class B or Class Z shares of the Fund for shares of another fund at no additional charge. However, if you exchange Class A, Class B or Class Z shares of Columbia Acorn International or Columbia Acorn International Select that you have owned 60 days or less for 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 the 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 semiannual report. The semiannual financial statements for the Columbia Thermostat Fund, another Fund of the Trust, begin on page 76 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 market 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 Trust has retained an independent statistical fair value pricing service to assist in the fair valuation process for securities principally traded in a foreign market in order to adjust for possible changes in value that may occur between the close of the foreign exchange and the time at which Fund shares are priced. If a security is valued at a "fair value", that value may be different from the last quoted market price for the security. 69 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 adviser 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. If the Funds no longer own the applicable securities, any distributions received in excess of income are recorded as realized gains. >Restricted Securities Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale at the issuer's expense either upon demand by the Funds or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees. The Funds will not incur any registration costs upon such resale. >Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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" on 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, 2005. >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 ("the 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 1-800-922-6769 70 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 accounted for as an addition to paid in capital and are allocated to each class proportionately for purposes of determining the net asset value of each class. >Custody fees/credits Custody fees are reduced based on each Fund's cash balances maintained with the custodian. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangement in an income-producing asset if they had not entered into such an agreement. The amount is disclosed as a reduction of total expenses on the Statements of Operations. >Federal income taxes The Funds have complied with the 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 Funds 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 15%. 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, 2004 was as follows: LONG- TERM ORDINARY CAPITAL INCOME* GAINS -------------------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 30,840 $441,598 Columbia Acorn International 16,930 -- Columbia Acorn USA -- 4,748 Columbia Acorn International Select 157 -- Columbia Acorn Select -- 25,216 * For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. The following capital loss carryforwards, determined as of December 31, 2004, may be available to reduce taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Internal Revenue Code: YEAR OF COLUMBIA ACORN COLUMBIA ACORN EXPIRATION INTERNATIONAL USA ------------------------------------------------------------------------ (IN THOUSANDS) 2009 $ -- $ 2,529* 2010 14,102 506 2011 48,477 -- ------------------------------------------------------------------------ TOTAL $62,579 $ 3,035 YEAR OF COLUMBIA ACORN EXPIRATION INTERNATIONAL SELECT ------------------------------------------------------------------------ (IN THOUSANDS) 2009 $ 16,135 2010 12,528 2011 2,488 ------------------------------------------------------------------------ TOTAL $ 31,151 * Of these carryforwards, $2,529 (expiring in 2009) remains from the Columbia Acorn USA's merger with Stein Roe Small Company Growth Fund on 7/26/2002. Utilization of Stein Roe Small Company Growth Fund's losses could be subject to limitations imposed by the Internal Revenue Code. 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. Effective March 8, 2005, 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 0.74% Next $1.3 billion 0.69% Next $4 billion 0.64% Net assets in excess of $6 billion 0.63% COLUMBIA ACORN INTERNATIONAL ------------------------------------------------------------------- Net asset value: On the first $100 million 1.19% Next $400 million 0.94% Net assets in excess of $500 million 0.74% COLUMBIA ACORN USA ------------------------------------------------------------------- Net asset value: On the first $200 million 0.94% Net assets in excess of $200 million 0.89% 71 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED COLUMBIA ACORN INTERNATIONAL SELECT ------------------------------------------------------------------- On average daily net assets: 0.94% COLUMBIA ACORN SELECT ------------------------------------------------------------------- Net asset value: On the first $700 million 0.85% Net assets in excess of $700 million 0.80% Prior to March 8, 2005, under the Funds' investment management agreement, fees were 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 ------------------------------------------------------------------- Net asset value: On the first $700 million 0.90% Net assets in excess of $700 million 0.85% In accordance with the terms of the NYAG Settlement (as defined and discussed further under Note 8 to these Financial Statements - "Legal Proceedings"), Columbia WAM waived a portion of the fees payable under the Funds' investment management agreement so that those fees are retained at the following rates as a percent of average daily net assets: COLUMBIA ACORN FUND - 0.74% - up to $700 million; 0.69% - $700 million to $2 billion; 0.64% - $2 billion to $6 billion; 0.63% - $6 billion and over; COLUMBIA ACORN INTERNATIONAL - 1.19% - up to $100 million; 0.94% - $100 million to $500 million; 0.74% - $500 million and over; COLUMBIA ACORN USA - 0.94% - up to $200 million; 0.89% - $200 million and over; COLUMBIA ACORN INTERNATIONAL SELECT - 0.94% on average daily net assets; COLUMBIA ACORN SELECT - 0.85% - up to $700 million; 0.80% - $700 million and over. The fee waiver was effective as of March 8, 2005 but applied as if it had gone into effect on December 1, 2004. For the six months ended June 30, 2005, the Funds' effective investment advisory fee rates were as follows: ------------------------------------------------------------------- Columbia Acorn Fund 0.65% Columbia Acorn International 0.80% Columbia Acorn USA 0.90% Columbia Acorn International Select 0.94% Columbia Acorn Select 0.84% =================================================================== >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 Select 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 provides administrative services and receives an administration fee from the Funds at the following rates: COLUMBIA ACORN TRUST ------------------------------------------------------------------- Average daily net asset value: On the first $8 billion 0.05% Next $8 billion 0.04% Average daily net asset in excess of $16 billion 0.03% For the six months ended June 30, 2005 each Fund's effective administration fee rate was 0.043%. 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, 2005, Columbia Acorn Fund, Columbia Acorn International, Columbia Acorn USA, Columbia Acorn International Select and Columbia Acorn Select have been advised that CFDI retained $618,687 in underwriting discounts on the sale of Class A shares and received CDSCs of $880, $1,489,655, $52,509, 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 0.60% and 0.75%, annually, of the average daily net assets attributable to Class B and Class C shares, respectively. Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly-owned subsidiary of BOA, provides shareholder services to the Funds. For such services, the 1-800-922-6769 72 Transfer Agent receives a fee, paid monthly, at the annual rate of $21.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. The Transfer Agent made the decision to waive the reimbursement for certain 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, 2005 were as follows: ------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $323 Columbia Acorn International 53 Columbia Acorn USA 21 Columbia Acorn International Select 20 Columbia Acorn Select 65 =================================================================== The Board of Trustees appointed a Chief Compliance Officer to the Trust in accordance with federal securities regulations. The Funds, along with other affiliated funds, will pay their pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. These expenses are disclosed separately as "Compliance fees" on the Statements of Operations. 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, 2005, Columbia Acorn Fund, Columbia Acorn USA and Columbia Acorn Select 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 34, 49 and 56, respectively. During the six months ended June 30, 2005, the Funds engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), 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: PURCHASES SALES ------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 3,046 $ 1,713 Columbia Acorn International 4,757 623 Columbia Acorn USA -- 311 Columbia Acorn International Select 5,483 92 Columbia Acorn Select -- 912 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. Interest is charged to each participating fund based on its borrowings at rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.10% per annum is accrued and apportioned among the participating funds based on their pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. No amounts were borrowed under this facility for the six months ended June 30, 2005. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2005 were: COLUMBIA ACORN FUND ------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 1,459,490 Proceeds from sales 1,076,808 =================================================================== COLUMBIA ACORN INTERNATIONAL ------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 506,385 Proceeds from sales 305,798 =================================================================== COLUMBIA ACORN USA ------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 121,693 Proceeds from sales 57,382 =================================================================== COLUMBIA ACORN INTERNATIONAL SELECT ------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 24,315 Proceeds from sales 7,891 =================================================================== COLUMBIA ACORN SELECT ------------------------------------------------------------------- (IN THOUSANDS) Investment securities Purchases $ 465,643 Proceeds from sales 170,312 =================================================================== 73 COLUMBIA ACORN FAMILY OF FUNDS >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED 7. Redemption Fees For the six months ended June 30, 2005, the redemption fees for Columbia Acorn International and Columbia Acorn International Select amounted to $32,722 and $6,294, respectively. 8. Legal Proceedings On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"), the advisor to the Columbia Funds, and CFDI (collectively with Columbia Management, "Columbia"), the distributor of the shares of the Columbia Funds, the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds (collectively, "the Columbia Family of Funds"), entered into agreements in principle with the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General ("NYAG") to resolve the proceedings brought in connection with the SEC's and NYAG's investigations of frequent trading and market timing in certain Columbia mutual funds. Columbia WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds, was not a respondent in either proceeding nor were any of its officers or directors. On February 9, 2005, Columbia entered into an Assurance of Discontinuance (the "NYAG Settlement") with the NYAG and consented to the entry of a cease-and-desist order by the SEC (the "SEC Order" and together, the "Settlements"). The Settlements contain substantially the same terms and conditions as outlined in the agreements in principle. Although none of the Columbia Acorn Family of Funds is a party to the Settlement orders, under the terms of the Settlements and in order for Columbia Management to continue to provide administrative services to the Columbia Acorn Family of Funds, the Board of Trustees of the Trust expects to comply voluntarily with certain requirements, including: the election of an independent board chairman, which the Board had done well in advance of the regulatory proceedings; and the appointment of one or more individuals to monitor legal compliance and to add another level of assurance that the management fees to be charged to the Funds are negotiated at arm's length and are reasonable. Under the terms of the SEC Order, Columbia has agreed, among other things, to: pay $70 million in disgorgement and $70 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to review Columbia's applicable supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (see below). The NYAG Settlement also, among other things, requires Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce management fees paid by the Columbia Family of Funds, Nations Funds and other related mutual funds collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions based on net assets as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the settlement amounts will be distributed in accordance with a distribution plan to be developed by an independent distribution consultant, who is acceptable to the SEC staff and the independent trustees of the funds. The distribution plan must be based on a methodology developed in consultation with Columbia and the independent trustees of the funds and not unacceptable to the staff of the SEC. More specific information on the distribution plan will be communicated by Columbia WAM and/or its affiliates at a later date. The Trust, Columbia WAM and the Trustees of the Trust are named as defendants in class and derivative complaints which have been consolidated in a Multi-District Action in the federal district court for the District of Massachusetts. These lawsuits contend that defendants permitted certain investors to market time their trades in certain Columbia Acorn Funds. The Multi-District Action is ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are also defendants in a consolidated lawsuit filed in the federal district court of Massachusetts 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 and the Trustees of the Trust breached certain common law duties and federal 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"); 1-800-922-6769 74 (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 plaintiffs' complaint was dismissed by the district court. However, plaintiffs are in the process of appealing that decision. On January 11, 2005 a putative class action lawsuit was filed in federal district court in Massachusetts against, among others, the Trustees of the Trust and Columbia WAM. The lawsuit alleges that defendants violated common law duties to fund shareholders as well as sections of the Investment Company Act of 1940, by failing to ensure that the Trust funds and other affiliated funds participated in securities class action settlements for which the funds were eligible. Specifically, plaintiffs allege that defendants failed to submit Proof of Claims in connection with settlements of securities class action lawsuits filed against companies in which the funds held positions. The complaint seeks compensatory and punitive damages, and the disgorgement of all fees paid to Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM have been dismissed as defendants in this lawsuit. On March 21, 2005, a class action complaint was filed against the Columbia Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due to the alleged market timing of the Columbia Acorn Funds. In addition to the rescission of sales charges, plaintiffs seek recovery of actual damages, attorneys' fees and cost. The case has been removed to the federal district court of Massachusetts. The Trust and Columbia WAM intend to defend these suits vigorously. 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 BOA (and affiliated entities). These suits are ongoing. However, based on currently available information, the Columbia Acorn Trust believes that the likelihood that these lawsuits will have a material adverse impact on any fund is remote, and Columbia WAM believes that the lawsuits are not likely to materially affect its ability to provide investment management services to the Funds. For the six months ended June 30, 2005, Columbia Management has assumed consulting services and legal fees incurred by the Funds in connection with these matters and the amounts are as follows: ------------------------------------------------------------------- (IN THOUSANDS) Columbia Acorn Fund $ 85 Columbia Acorn International 13 Columbia Acorn USA 6 Columbia Acorn International Select --* Columbia Acorn Select 8 =================================================================== * Rounds to less than $500. 9. Subsequent Event Effective August 22, 2005, the Funds' distributor will be Columbia Management Distributors, Inc. and the Funds' transfer agent will be Columbia Management Services, Inc. 75 COLUMBIA THERMOSTAT FUND >STATEMENT OF INVESTMENTS (UNAUDITED), JUNE 30, 2005 NUMBER OF SHARES OR PRINCIPAL AMOUNT (000) VALUE (000) ----------------------------------------------------------------- >BOND MUTUAL FUNDS: 59.9% 6,795 Columbia Intermediate Bond Fund, Class Z $ 61,764 3,436 Columbia Federal Securities Fund, Class Z 37,035 2,864 Columbia High Yield Fund, Class Z 24,746 ----------------------------------------------------------------- TOTAL BOND MUTUAL FUNDS (COST: $122,607) 123,545 >STOCK MUTUAL FUNDS: 39.9% 1,119 Columbia Growth & Income Fund, Class Z 20,444 2,319 Columbia Growth Stock Fund, Class Z (b) 20,039 627 Columbia Acorn Fund, Class Z 16,800 602 Columbia Acorn Select, Class Z 12,631 452 Columbia Mid Cap Value Fund, Class Z 12,551 ----------------------------------------------------------------- TOTAL STOCK MUTUAL FUNDS (COST: $67,473) 82,465 >SHORT-TERM OBLIGATIONS: 0.4% $ 751 Repurchase Agreement with State Street Bank & Trust dated 6/30/05, due 7/1/05 at 3.00% collateralized by Federal National Mortgage Association Notes, maturing 3/24/08 market value $769 (repurchase proceeds: $751) 751 ----------------------------------------------------------------- (COST: $751) 751 ----------- TOTAL INVESTMENTS: 100.2% 206,761 (COST: $190,831)(a) CASH AND OTHER ASSETS LESS LIABILITIES: (0.2)% (421) ----------- TOTAL NET ASSETS: 100% $ 206,340 ================================================================= > Notes to Statement of Investments (in thousands) (a) At June 30, 2005, for federal income tax purposes cost of investments was $190,831 and net unrealized appreciation was $15,930 consisting of gross unrealized appreciation of $16,094 and gross unrealized depreciation of $164. (b) Non-income producing security. 1-800-922-6769 76 COLUMBIA THERMOSTAT FUND >STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 2005 ------------------------------------------------------------------------------------------------------- (IN THOUSANDS) ASSETS: Unaffiliated investments, at value (cost: $751) $ 751 Affiliated investments, at value (cost: $190,080) 206,010 Cash 490 Receivable for fund shares sold 153 Expense reimbursement due from Investment Adviser 28 ------------------------------------------------------------------------------------------------------- Total Assets 207,432 LIABILITIES: Payable for: Investments purchased 490 Fund shares redeemed 361 Management fee 16 Administration fee 7 Deferred trustees fee 5 Transfer agent fees 16 Trustees' fees 2 Custody fees 3 Reports to shareholders 73 12b-1 Service & Distribution fees 102 Other liabilities 17 ------------------------------------------------------------------------------------------------------- Total Liabilities 1,092 ------------------------------------------------------------------------------------------------------- NET ASSETS $ 206,340 ======================================================================================================= COMPOSITION OF NET ASSETS: Paid in capital $ 187,052 Undistributed net investment income 2,080 Accumulated net realized gain 1,278 Net unrealized appreciation on investments 15,930 ------------------------------------------------------------------------------------------------------- NET ASSETS $ 206,340 ======================================================================================================= Net asset value per share -- Class A (a) $ 13.04 (Net assets/shares) ($71,945/5,518) Maximum offering price per share -- Class A (b) $ 13.84 (Net asset value per share/front-end sales charge) ($13.04/0.9425) Net asset value and offering price per share -- Class B (a) $ 13.02 (Net assets/shares) ($79,557/6,110) Net asset value and offering price per share -- Class C (a) $ 13.01 (Net assets/shares) ($30,449/2,341) Net asset value, offering and redemption price per share -- Class Z $ 13.06 (Net assets/shares) ($24,389/1,867)
(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. 77 COLUMBIA THERMOSTAT FUND >STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2005
(IN THOUSANDS) ------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends from affiliated investment company shares $ 2,882 Interest income 11 ------------------------------------------------------------------------------------------------------- Total Investment Income 2,893 EXPENSES: Management fee 102 Administration fee 44 12b-1 Service and Distribution fees: Class A 92 Class B 330 Class C 151 Transfer agent fees: Class A 45 Class B 65 Class C 23 Class Z 10 Trustees' fees 10 Custody fees 6 Reports to shareholders 67 Compliance fees 4 Non-recurring costs (See Note 7) 1 Other expenses 47 ------------------------------------------------------------------------------------------------------- Total expenses 997 Less custody fees paid indirectly --* Less reimbursement of expenses by Investment Adviser (149) Less reimbursement of expenses by Transfer Agent (19) Non-recurring costs reimbursed (See Note 7) (1) ------------------------------------------------------------------------------------------------------- Net Expenses 828 ------------------------------------------------------------------------------------------------------- Net Investment Income 2,065 NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on: Affiliated investments 1,532 Distributions from affiliated investment company shares 280 ------------------------------------------------------------------------------------------------------- Net realized gain 1,812 Net change in unrealized appreciation (depreciation) on investments (1,503) ------------------------------------------------------------------------------------------------------- Net realized and unrealized gain 309 ------------------------------------------------------------------------------------------------------- Net Increase in Net Assets from Operations $ 2,374 =======================================================================================================
* Rounds to less than $500. 1-800-922-6769 See accompanying notes to financial statements. 78 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) 2005 2004 OPERATIONS: Net investment income $ 2,065 $ 3,334 Net realized gain on investments and distributions from affiliated investment company shares 1,812 3,692 Net change in net unrealized appreciation (depreciation) on investments (1,503) 8,154 ------------------------------------------------------------------------------------------------------------------------- Net Increase from Operations 2,374 15,180 DISTRIBUTION TO SHAREHOLDERS FROM: Net investment income -- Class A -- (1,488) Net realized gain -- Class A (1,365) (141) Net investment income -- Class B -- (997) Net realized gain -- Class B (1,495) (146) Net investment income -- Class C -- (383) Net realized gain -- Class C (573) (61) Net investment income -- Class Z -- (450) Net realized gain -- Class Z (449) (36) ------------------------------------------------------------------------------------------------------------------------- Total Distributions to Shareholders (3,882) (3,702) SHARE TRANSACTIONS: Subscriptions -- Class A 7,179 42,302 Distributions reinvested -- Class A 1,229 1,425 Redemptions -- Class A (13,096) (13,080) ------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A (4,688) 30,647 Subscriptions -- Class B 6,412 27,802 Distributions reinvested -- Class B 1,356 1,024 Redemptions -- Class B (5,578) (6,671) ------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 2,190 22,155 Subscriptions -- Class C 3,670 12,939 Distributions reinvested -- Class C 523 378 Redemptions -- Class C (4,611) (4,000) ------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C (418) 9,317 Subscriptions -- Class Z 4,257 8,408 Distributions reinvested -- Class Z 427 470 Redemptions -- Class Z (1,184) (3,140) ------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class Z 3,500 5,738 ------------------------------------------------------------------------------------------------------------------------- Net Increase from Share Transactions 584 67,857 ------------------------------------------------------------------------------------------------------------------------- Total Increase (Decrease) in Net Assets (924) 79,335 ------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 207,264 127,929 ------------------------------------------------------------------------------------------------------------------------- End of period $ 206,340 $ 207,264 ------------------------------------------------------------------------------------------------------------------------- UNDISTRIBUTED NET INVESTMENT INCOME $ 2,080 $ 15 =========================================================================================================================
See accompanying notes to financial statements. 79 COLUMBIA THERMOSTAT FUND >STATEMENT OF CHANGES IN NET ASSETS, CONTINUED
(UNAUDITED) SIX MONTHS YEAR ENDED CHANGES IN SHARES OF BENEFICIAL INTEREST: ENDED JUNE 30, DECEMBER 31, ------------------------------------------------------------------------------------------------------------------------- (IN THOUSANDS) 2005 2004 Subscriptions -- Class A 551 3,381 Shares issued in reinvestment and capital gains -- Class A 94 110 Less shares redeemed -- Class A (1,006) (1,049) ------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class A (361) 2,442 Subscriptions -- Class B 493 2,213 Shares issued in reinvestment and capital gains -- Class B 104 79 Less shares redeemed -- Class B (428) (530) ------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class B 169 1,762 Subscriptions -- Class C 282 1,028 Shares issued in reinvestment and capital gains -- Class C 41 29 Less shares redeemed -- Class C (354) (316) ------------------------------------------------------------------------------------------------------------------------- Net Increase (Decrease) -- Class C (31) 741 Subscriptions -- Class Z 327 669 Shares issued in reinvestment and capital gains -- Class Z 33 36 Less shares redeemed -- Class Z (91) (250) ------------------------------------------------------------------------------------------------------------------------- Net Increase -- Class Z 269 455 ------------------------------------------------------------------------------------------------------------------------- Net Increase in Shares of Beneficial Interest 46 5,400 -------------------------------------------------------------------------------------------------------------------------
1-800-922-6769 See accompanying notes to financial statements. 80 COLUMBIA THERMOSTAT FUND >FINANCIAL HIGHLIGHTS
(UNAUDITED) INCEPTION SIX MONTHS MARCH 3, 2003 ENDED YEAR ENDED THROUGH CLASS A SHARES JUNE 30, DECEMBER 31, DECEMBER 31, ------------------------------------------------------------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 13.11 $ 12.30 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.15 0.28 0.18 Net realized and unrealized gain 0.03 0.81 2.15 ------------------------------------------------------------------------------------------------------------ Total from Investment Operations 0.18 1.09 2.33 ------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.25) (0.13) From net realized gains (0.25) (0.03) (0.00)(b) ------------------------------------------------------------------------------------------------------------ Total Distributions Declared to Shareholders (0.25) (0.28) (0.13) ------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 13.04 $ 13.11 $ 12.30 ============================================================================================================ Total Return (c)(d) 1.37%(e) 8.92% 23.10%(e) ------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f)(g) 0.50%(h) 0.50% 0.57%(h) Net investment income (g) 2.34%(h) 2.23% 1.86%(h) Reimbursement 0.15%(h) 0.33% 0.66%(h) Portfolio turnover rate 35%(e) 67% 61% Net assets at end of period (000'S) $ 71,945 $ 77,092 $ 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 Investment Adviser and/or Transfer Agent not waived and/or 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 YEAR ENDED THROUGH CLASS B SHARES JUNE 30, DECEMBER 31, DECEMBER 31, ------------------------------------------------------------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 13.14 $ 12.32 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.11 0.19 0.10 Net realized and unrealized gain 0.02 0.83 2.16 ------------------------------------------------------------------------------------------------------------ Total from Investment Operations 0.13 1.02 2.26 ------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.17) (0.04) From net realized gains (0.25) (0.03) (0.00)(b) ------------------------------------------------------------------------------------------------------------ Total Distributions Declared to Shareholders (0.25) (0.20) (0.04) ------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 13.02 $ 13.14 $ 12.32 ============================================================================================================ Total Return (c)(d) 0.99%(e) 8.27% 22.38%(e) ------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f)(g) 1.10%(h) 1.18% 1.32%(h) Net investment income (g) 1.74%(h) 1.55% 1.06%(h) Reimbursement 0.19%(h) 0.29% 0.66%(h) Portfolio turnover rate 35%(e) 67% 61% Net assets at end of period (000'S) $ 79,557 $ 78,040 $ 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 Investment Adviser and/or Transfer Agent not waived and/or 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 YEAR ENDED THROUGH CLASS C SHARES JUNE 30, DECEMBER 31, DECEMBER 31, ------------------------------------------------------------------------------------------------------------ SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 2005 2004 2003 NET ASSET VALUE, BEGINNING OF PERIOD $ 13.13 $ 12.32 $ 10.10 INCOME FROM INVESTMENT OPERATIONS Net investment income (a) 0.10 0.19 0.11 Net realized and unrealized gain 0.03 0.81 2.15 ------------------------------------------------------------------------------------------------------------ Total from Investment Operations 0.13 1.00 2.26 ------------------------------------------------------------------------------------------------------------ LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- (0.16) (0.04) From net realized gains (0.25) (0.03) (0.00)(b) ------------------------------------------------------------------------------------------------------------ Total Distributions Declared to Shareholders (0.25) (0.19) (0.04) ------------------------------------------------------------------------------------------------------------ NET ASSET VALUE, END OF PERIOD $ 13.01 $ 13.13 $ 12.32 ============================================================================================================ Total Return (c)(d) 0.99%(e) 8.13% 22.38%(e) ------------------------------------------------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Expenses (f)(g) 1.25%(h) 1.25% 1.32%(h) Net investment income (g) 1.59%(h) 1.48% 1.10%(h) Reimbursement 0.18%(h) 0.26% 0.66%(h) Portfolio turnover rate 35%(e) 67% 61% Net assets at end of period (000's) $ 30,449 $ 31,161 $ 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 Investment Adviser and/or Transfer Agent not waived and/or 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. 81 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1. Nature of Operations Columbia Thermostat Fund (the "Fund"), is a series of Columbia Acorn Trust (the "Trust"), an open-end management investment company organized as a Massachusetts business trust. 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. 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 semiannual report. The semiannual 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, 2005, 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. 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 Investments in Portfolio Funds are valued at their net asset value as reported by the underlying funds. Repurchase agreements, 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 adviser 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 accounting principles generally accepted in the United States of America 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 ("the 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) 1-800-922-6769 82 and 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/credits Custody fees are reduced based on the Fund's cash balance maintained with the custodian. The Fund could have invested a portion of assets utilized in connection with the expense offset arrangement in an income-producing asset if it had not entered into such an agreement. The amount is disclosed as a reduction of total expenses on the Statement of Operations. >Federal income taxes The Fund has complied with the 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, 2004 was as follows: DECEMBER 31, 2004 ---------------------------------------------- (IN THOUSANDS) Distributions paid from: Ordinary Income* $3,645 Long-Term Capital Gains 57 * For tax purposes short-term capital gains distributions, if any, are considered ordinary income distributions. 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. 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 contractually reimburse the direct operating expenses (exclusive of distribution and service 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 has the right to recoup expense reimbursement payments made to the Fund through December 31, 2005. This will be accomplished by the payment of an expense reimbursement fee by the Fund to Columbia WAM computed and paid monthly, with a limitation that immediately after such payment the Fund's ordinary operating expenses (excluding any distribution and service fees, interest and fees on borrowings and expenses associated with the Fund's investment in other investment companies) will not exceed 0.25% annually. Columbia WAM provides administrative services and receives an administration fee from the Fund 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 asset value in excess of $16 billion 0.03% For the six months ended June 30, 2005, the Fund's effective administration fee rate was 0.043%. 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. For the six months ended June 30, 2005, the Fund has been advised that CFDI retained $37,038 in underwriting discounts on the sale of Class A shares and received CDSCs of $5, $129,112 and $4,402 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 pay CFDI a monthly distribution fee equal to 0.60% and 0.75%, annually, of the average daily net assets attributable to Class B and Class C shares, respectively. 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 $21.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. The Transfer Agent has made the decision to waive the reimbursement for certain out-of-pocket expenses. 83 COLUMBIA THERMOSTAT FUND >NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED The Transfer Agent has made the decision to waive the reimbursement for certain 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 Fund for the six months ended June 30, 2005 were $9,720. The Board of Trustees appointed a Chief Compliance Officer to the Trust in accordance with federal securities regulations. The Fund, along with other affiliated funds, will pay its pro-rata share of the expenses associated with the Office of the Chief Compliance Officer. This expense is disclosed separately as "Compliance fees" on the Statement of Operations. 5. Borrowing Arrangements The Trust participates in a $150 million credit facility, which was entered into to facilitate portfolio liquidity. Interest is charged to each participating fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.10% per annum is accrued and apportioned among the participating funds based on their pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statement of Operations. No amounts were borrowed under this facility for the six months ended June 30, 2005. 6. Investment Transactions The aggregate cost of purchases and proceeds from sales other than short-term obligations for the six months ended June 30, 2005 were: ----------------------------------------------------------------- (IN THOUSANDS) Purchases $71,861 Proceeds from sales 71,924 ================================================================= 7. Legal Proceedings On March 15, 2004, Columbia Management Advisors, Inc. ("Columbia Management"), the advisor to the Columbia Funds, and CFDI (collectively with Columbia Management, "Columbia"), the distributor of the shares of the Columbia Funds, the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds (collectively, "the Columbia Family of Funds"), entered into agreements in principle with the staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General ("NYAG") to resolve the proceedings brought in connection with the SEC's and NYAG's investigations of frequent trading and market timing in certain Columbia mutual funds. Columbia WAM, the advisor to the Columbia Acorn Family of Funds and the Wanger Advisors Trust Funds, was not a respondent in either proceeding nor were any of its officers or directors. On February 9, 2005, Columbia entered into an Assurance of Discontinuance (the "NYAG Settlement") with the NYAG and consented to the entry of a cease-and-desist order by the SEC (the "SEC Order" and together, the "Settlements"). The Settlements contain substantially the same terms and conditions as outlined in the agreements in principle. Although none of the Columbia Acorn Family of Funds is a party to the Settlement orders, under the terms of the Settlements and in order for Columbia Management to continue to provide administrative services to the Columbia Acorn Family of Funds, the Board of Trustees of the Trust expects to comply voluntarily with certain requirements, including: the election of an independent board chairman, which the Board had done well in advance of the regulatory proceedings; and the appointment of one or more individuals to monitor legal compliance and to add another level of assurance that the management fees to be charged to the Funds are negotiated at arm's length and are reasonable. Under the terms of the SEC Order, Columbia has agreed, among other things, to: pay $70 million in disgorgement and $70 million in civil money penalties; cease and desist from violations of the antifraud provisions and certain other provisions of the federal securities laws; maintain certain compliance and ethics oversight structures; retain an independent consultant to review Columbia's applicable supervisory, compliance, control and other policies and procedures; and retain an independent distribution consultant (see below). The NYAG Settlement also, among other things, requires Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP Distributors, LLC to reduce management fees paid by the Columbia Family of Funds, Nations Funds and other related mutual funds collectively by $32 million per year for five years, for a projected total of $160 million in management fee reductions based on net assets as of March 15, 2004. Pursuant to the procedures set forth in the SEC Order, the settlement amounts will be distributed in accordance with a distribution plan to be developed by an independent distribution consultant, who is acceptable to the SEC staff and the independent trustees of the funds. The distribution plan must be based on a methodology developed in consultation with Columbia and the independent trustees of the funds and not unacceptable to the staff of the SEC. More specific information on the distribution plan will be communicated by Columbia WAM and/or its affiliates at a later date. The Trust, Columbia WAM and the Trustees of the Trust are named as defendants in class and derivative complaints which have been consolidated in a Multi-District Action in 1-800-922-6769 84 the federal district court for the District of Massachusetts. These lawsuits contend that defendants permitted certain investors to market time their trades in certain Columbia Acorn Funds. The Multi-District Action is ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. Columbia WAM, the Columbia Acorn Funds and the Trustees of the Trust are also defendants in a consolidated lawsuit filed in the federal district court of Massachusetts 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 and the Trustees of the Trust breached certain common law duties and federal 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 plaintiffs' complaint was dismissed by the district court. However, plaintiffs are in the process of appealing that decision. On January 11, 2005 a putative class action lawsuit was filed in federal district court in Massachusetts against, among others, the Trustees of the Trust and Columbia WAM. The lawsuit alleges that defendants violated common law duties to fund shareholders as well as sections of the Investment Company Act of 1940, by failing to ensure that the Trust funds and other affiliated funds participated in securities class action settlements for which the funds were eligible. Specifically, plaintiffs allege that defendants failed to submit Proof of Claims in connection with settlements of securities class action lawsuits filed against companies in which the funds held positions. The complaint seeks compensatory and punitive damages, and the disgorgement of all fees paid to Columbia WAM and affiliated advisers. The trustees of the Trust and Columbia WAM have been dismissed as defendants in this lawsuit. On March 21, 2005, a class action complaint was filed against the Columbia Acorn Trust and Columbia WAM seeking to rescind the Contingent Deferred Sales Charges assessed upon redemption of Class B shares of Columbia Acorn Funds due to the alleged market timing of the Columbia Acorn Funds. In addition to the rescission of sales charges, plaintiffs seek recovery of actual damages, attorneys' fees and cost. The case has been removed to the federal district court of Massachusetts. The Trust and Columbia WAM intend to defend these suits vigorously. 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 BOA (and affiliated entities). These suits are ongoing. However, based on currently available information, the Columbia Acorn Trust believes that the likelihood that these lawsuits will have a material adverse impact on any fund is remote, and Columbia WAM believes that the lawsuits are not likely to materially affect its ability to provide investment management services to the Funds. For the six months ended June 30, 2005, Columbia Management has assumed $1,256 of consulting services and legal fees incurred by the Fund in connection with these matters. 8. Subsequent Event Effective August 22, 2005, the Fund's distributor will be Columbia Management Distributors, Inc. and the Fund's transfer agent will be Columbia Management Services, Inc. 85 COLUMBIA ACORN FAMILY OF FUNDS CLASS A, B AND C SHARE INFORMATION MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN INTERNATIONAL, COLUMBIA ACORN INTERNATIONAL SELECT AND COLUMBIA THERMOSTAT FUND $1,000 $1,000 FOR AN IRA MINIMUM INITIAL INVESTMENT IN COLUMBIA ACORN FUND, COLUMBIA ACORN USA AND COLUMBIA ACORN SELECT* $50,000 MINIMUM SUBSEQUENT INVESTMENT $50 EXCHANGE FEE NONE
COLUMBIA ACORN FUND CLASS A CLASS B CLASS C Management Fees 0.65% 0.65% 0.65% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.16% 0.25% 0.20% ---------------------------------------------------------- Expense Ratio 1.06% 1.75% 1.85% COLUMBIA ACORN INTERNATIONAL CLASS A CLASS B CLASS C Management Fees 0.80% 0.80% 0.80% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.26% 0.38% 0.30% ---------------------------------------------------------- Expense Ratio 1.31% 2.03% 2.10% COLUMBIA ACORN USA CLASS A CLASS B CLASS C Management Fees 0.90% 0.90% 0.90% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.19% 0.28% 0.23% ---------------------------------------------------------- Expense Ratio 1.34% 2.03% 2.13% COLUMBIA ACORN INTERNATIONAL SELECT CLASS A CLASS B CLASS C Management Fees 0.94% 0.94% 0.94% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.51% 0.51% 0.51% ---------------------------------------------------------- Expense Ratio 1.70% 2.30% 2.45% COLUMBIA ACORN SELECT CLASS A CLASS B CLASS C Management Fees 0.84% 0.84% 0.84% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.16% 0.29% 0.23% ---------------------------------------------------------- Expense Ratio 1.25% 1.98% 2.07% COLUMBIA THERMOSTAT** CLASS A CLASS B CLASS C Management Fees 0.10% 0.10% 0.10% Distribution and Service (12b-1) Fees 0.25% 0.85% 1.00% Other Expenses 0.15% 0.15% 0.15% ---------------------------------------------------------- Expense Ratio 0.50% 1.10% 1.25%
Fees and expenses are for the six months ended June 30, 2005 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, 2006. The Fund's adviser and/or affiliates have contractually agreed to waive a portion of "other expenses" through April 30, 2006. * Effective August 5, 2005, the minimum initial investment in Columbia Acorn Select was raised to $50,000 from $1,000. ** Does not include estimated fees and expenses of 0.85% incurred by the Fund from the underlying portfolio funds. 1-800-922-6769 86 [Excerpts from:] COLUMBIA ACORN TRUST Management Fee Evaluation of the Senior Officer Prepared Pursuant to the New York Attorney General's Assurance of Discontinuance July 2005 87 INTRODUCTION The New York Attorney General's Assurance of Discontinuance ("Order") entered into by Columbia Management Advisors, Inc. ("CMAI") and Columbia Funds Distributor, Inc., ("CFDI" and collectively with "CMAI", "CMG") in February 2005, allows CMAI to manage or advise a mutual fund, including the Acorn Trust's family of funds (the "Acorn Funds" or "Acorn" or "Trust"), only if the trustees of the Acorn Funds appoint a "Senior Officer" to perform specified duties and responsibilities. One of these responsibilities includes "managing the process by which proposed management fees (including but not limited to, advisory fees) to be charged the Acorn Funds are negotiated so that they are negotiated in a manner which is at arms' length and reasonable and consistent with this Assurance of Discontinuance." The Order also provides that the Board of Trustees of the Acorn Funds ("Board") must determine the reasonableness of proposed "management fees" by using either an annual competitive bidding process supervised by the Senior Officer or Independent Fee Consultant, or by obtaining "an annual independent written evaluation prepared by or under the direction of the Senior Officer or the Independent Fee Consultant." "Management fees" are only part of the costs and expenses paid by mutual fund shareholders. The expenses can vary depending upon the class of shares held but usually include: (1) investment management or advisory fees to compensate analysts and portfolio managers for stock research and portfolio management, as well as the cost of operating a trading desk; (2) administrative expenses incurred to prepare registration statements and tax returns, calculate the Funds' net asset values, maintain effective compliance procedures and perform recordkeeping services; (3) transfer agency costs for establishing accounts, accepting and disbursing funds, as well as overseeing trading in Fund shares; (4) custodial expenses incurred to hold the securities purchased by the Funds; and (5) distribution expenses, including commissions paid to brokers that sell the Fund shares to investors. Columbia Wanger Asset Management, L.P. ("CWAM"), the adviser to the Acorn Funds, has proposed that the Trust enter into separate agreements governing the first two categories listed above: an advisory agreement governing portfolio management, and an administration agreement governing certain administration and clerical services. Together the fees paid under these two agreements are referred to as "management fees." Other fund expenses are governed by separate agreements, in particular agreements with two CWAM affiliates: CFDI, the broker-dealer that underwrites and distributes the Acorn Funds' shares, and Columbia Funds Services, Inc. ("CFSI"), the Funds' transfer agent. In conformity with the terms of the Order, this evaluation, therefore, addresses only the advisory and administrative contracts between CWAM and the Trust, and does not extend to the other agreements. According to the Order, the Senior Officer's evaluation must consider at least the following: (1) Management fees (including components thereof) charged to institutional and other clients of CWAM for like services; (2) Management fees (including any components thereof) charged by other mutual fund companies for like services; (3) Costs to CWAM and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit; (4) Profit margins of CWAM and its affiliates from supplying such services; (5) Possible economies of scale as the Acorn Funds grow larger; and (6) The nature and quality of CWAM's services, including the performance of each Acorn Fund. 1-800-922-6769 88 On November 16, 2004, the Board appointed me Senior Officer under the Order. The Board also determined not to pursue a competitive bidding process and instead, charged me with the responsibility of evaluating the Acorn Funds' proposed advisory and administrative fee contracts with CWAM in conformity with the requirements of the Order. This Report is an annual evaluation required under the Order. In discharging their responsibilities, the independent Trustees have also consulted independent, outside counsel. * * * This evaluation was performed in cooperation and regular communication with the Investment Advisory Committee of the Board of Trustees. PROCESS AND INDEPENDENCE The objectives of the Order are to insure the independent evaluation of the advisory fees paid by the Acorn Funds as well as to insure that all relevant factors are considered. In my view, the contract renewal process has been conducted at arms-length and with independence in gathering, considering and evaluating relevant data. For example, the selection of fund peer groups is critical in assessing a fund's relative performance and cost. I have required Lipper and Morningstar Inc. to prepare their reports without input or commentary from CWAM; the engagement letters with them reflect this requirement. As a result, the peer groups reflected in the Morningstar Inc. and Lipper reports were determined independently. After submission of the reports, I asked CWAM to comment on them to avoid errors and to establish a clear record of CWAM's views on which funds, in its judgment, constitute an appropriate peer group. Similarly, I discussed CWAM's profitability analysis with its management but also sought the independent views of Ernst & Young on the reasonableness of CWAM's cost allocation methodology and on the adequacy of the financial data it provided. The evaluation of CWAM's profitability was performed in the context of the limited industry data available. My evaluation of the advisory contract was shaped by my experience as Acorn's Chief Compliance Officer ("CCO"). As CCO, I report solely to the Board and have no reporting obligation to or employment relationship with CMG or its affiliates, except for administrative purposes. This too contributes to the independence of this evaluation. I have made several comments on compliance matters in evaluating the quality of service provided by CWAM and CMG. Finally, this Report, its supporting materials and the data contained in other materials submitted to the Investment Advisory Committee of the Board, in my view, provide a thorough factual basis upon which the Board, in consultation with independent counsel as it deems appropriate, may conduct management fee negotiations that are in the best interests of the Acorn Funds' shareholders. 89 * * * VI. CONCLUSIONS My review of the data and other material above leads to the following conclusions with respect to the factors identified in the Order. 1. Performance. The Acorn Funds generally have achieved outstanding performance. The Acorn Fund, Acorn USA and Acorn Select all rank very favorably against their peers. The international funds have good recent performance records, but weaker long-term performance relative to the other, domestic Acorn Funds. Recent management changes have been followed by improved performance. The Acorn Funds typically achieve their performance with less risk than their competitors. 2. Management Fees relative to Peers. The management fee rankings of the Funds - particularly on the basis of a combined advisory and administrative fee basis - are generally above the respective medians and, hence, more favorable to shareholders than their peer group funds. Management fees do vary by Fund, with the Acorn Fund the least expensive and the Acorn USA Fund the most expensive. Acorn USA is the only fund that both Lipper and Morningstar ranked below the median. 3. Administrative Fees. The Acorn Funds' administrative fee, which is uniform across all Funds, is at a level comparable to that of its peers, provides for appropriate services to Funds, and affords breakpoints that lower the fee as assets increase. 4. Management Fees relative to Institutional and Other Mutual Fund Accounts. CWAM's focus is on its mutual funds. It does not actively seek to manage separate or institutional accounts. The few institutional accounts it does manage vary in rate structures. Some pay advisory fees commensurate with or higher than the Acorn Funds. In a few instances, however, institutional accounts pay lower advisory fees than do the Acorn Funds. One particular institutional account is significant in size and has been under CWAM's management for over 25 years. Finally, in two instances, the Acorn Funds pay slightly higher fees than do similar funds sold through insurance companies. 5. Costs to CWAM and its Affiliates. CWAM's costs do not appear excessive, and, in my view, it uses appropriate methodologies to allocate overhead costs. CWAM's affiliates do not appear to profit indirectly from CWAM's advisory agreement with the Acorn Funds. 6. Profit Margins. CWAM's firm-wide profit margins are at the upper end of the industry, though these comparisons are hampered by limited industry data. High profit margins are not unexpected for firms that manage large, successful funds and have provided outstanding investment performance for investors. CMAI, the Funds' administrator, currently experiences losses rather than profits in connection with its activities relating to the Acorn Funds. 7. Economies of Scale. Economies of scale do exist at CWAM and will expand as the assets of the Acorn Funds get larger. They are, however, only partially reflected in the management fee schedule for the Funds. If the Acorn Funds' assets continue to grow, under the Funds' current fee schedules, shareholders might not benefit in a manner generally commensurate with CWAM's increased profits. 1-800-922-6769 90 8. Nature and quality of services. This category includes a variety of considerations that are difficult to quantify, yet can have a significant bearing on the performance of the Acorn Funds. Several areas merit comment. a. Continuity of Management. It is critical that capable and experienced portfolio managers remain committed to the Funds and are able to hire and retain analysts to assist them. CWAM must have in place appropriate incentive plans that align its management's interests with those of investors. Further, CWAM must maintain the independence of its investment process, supported by effective information technology. b. Compliance. CWAM has a reasonably designed compliance program and a variety of related services that are valuable to shareholders, such as systems to ensure best execution of portfolio transactions and the daily review of security prices to ensure accuracy of the Acorn Funds' NAV. c. Administrative Services. The Acorn Funds benefit from a variety of administrative services that are performed by CWAM and CMAI, including preparation of registration statements, calculation of NAV's, accounting services, shareholder services, and other functions. In my opinion, these conclusions, taken together, support the reasonableness of the proposed advisory and administrative fees. In reaching my evaluation, I weighed heavily the factors of performance and management fees relative to those paid by competing funds. In this respect, the Acorn Funds provide excellent performance at costs that generally fall below industry medians. VII. RECOMMENDATIONS The Trustees should consider the following proposals to address the issues identified in this Report. Some of these recommendations require the collection and evaluation of more data. This work cannot be accomplished effectively before the expiration of the existing advisory contract on July 31, 2005. Therefore, I recommend that the Trustees consider extending the existing contract pending consideration of these recommendations. These recommendations do not purport to offer the only avenues to address the opinions and conclusions I have expressed in this Report. Economies of scale, for example, can be addressed in a variety of ways in a management contract. Sound business judgment will guide how any particular area is addressed with due consideration given to all the factors that must be weighed in reaching an advisory agreement that best serves the Acorn Fund shareholders. I believe the Trustees should consider the following: 1. Restructure the advisory fee beyond the current breakpoint schedule to reflect more fully economies of scale. The Trustees might consider several ways to accomplish this objective, including instituting a two-tier fee structure that incorporates a complex- or CWAM-wide fee (including assets held in separate accounts) and a fund specific fee, with each containing breakpoints to reflect their separate economies of scale. Another approach is to consider uniform breakpoints for all Acorn Funds, including breakpoints above current asset levels. 2. Condition contract renewal on submission of an employment agreement or management incentive plan designed to ensure the continued employment of senior management, under terms that align management's incentives with the interests of the Acorn Funds' shareholders. Any incentive plan should be designed to 91 permit CWAM to attract and retain the highest caliber investment professionals and to support them with effective and reliable information technology systems. 3. Review with CWAM its anticipated capacity limitations and the degree to which increased staffing and effective incentives may address those issues. Robert P. Scales July 20, 2005 * * * More complete copies of the Management Fee Evaluation of the Senior Officer of the Columbia Acorn Trust, edited to delete certain confidential or proprietary information, are available upon written request to: R. Scott Henderson Bank of America MA-515-11-05 One Financial Center Boston, MA 02111 EFFECTIVE AUGUST 22, 2005, THE FUNDS' DISTRIBUTOR WILL BE COLUMBIA MANAGEMENT DISTRIBUTORS, INC. AND THE FUNDS' TRANSFER AGENT WILL BE COLUMBIA MANAGEMENT SERVICES, INC. 1-800-922-6769 92 This page intentionally left blank. 93 This page intentionally left blank. 94 This page intentionally left blank. 95 COLUMBIA ACORN ------------------------ FAMILY OF FUNDS TRUSTEES Robert E. Nason CHAIRMAN Margaret Eisen 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 Management Distributors, Inc. One Financial Center Boston, Massachusetts 02111-2621 TRANSFER AGENT, DIVIDEND DISBURSING AGENT Columbia Management 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. INFORMATION REGARDING HOW THE FUNDS VOTED PROXIES RELATING TO PORTFOLIO SECURITIES DURING THE 12-MONTH PERIOD ENDED JUNE 30, 2004 IS AVAILABLE FROM THE SEC'S WEBSITE. THE FUNDS FILE A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q. THE FUNDS' FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT www.sec.gov AND MAY BE REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, D.C. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330. 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 96 PARKING INFORMATION FOR 2005 ANNUAL SHAREHOLDER INFORMATION MEETING A public lot is located at 172 West Madison, between Wells and LaSalle, on the north side of the street. The entrance is on Madison. Madison is a one-way west street. This lot is approximately two blocks west of the Bank One building. Valet parking is available at 183 West Monroe, between Wells and LaSalle, on the south side of the street. The entrance is on Monroe. Monroe is a one-way east street. No vans or trucks are allowed to park at this lot. This lot is approximately three blocks west of the Bank One building. 55 East Monroe (formerly Mid-Continental Plaza Parking) is located on East Monroe Street two and one half blocks east of the Bank One building. The entrance is on the south side (right) of Monroe Street, between Wabash and Michigan Avenues. Monroe is a one-way street east. Grant Park Underground (indoor) parking is located 3 1/2 blocks east of the Bank One building on Monroe Street. The entrance is on the north side of Monroe Street between Columbus Drive and Lake Shore. Monroe is two-way between Lake Shore Drive and Michigan Avenue. West of Michigan, Monroe is a one-way east. 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. [LOCATION MAP] SAVE THE DATE! SEPTEMBER 27, 2005 Meet your portfolio managers, analysts and fellow shareholders at Columbia Acorn Funds 2005 Annual Shareholder Information Meeting Bank One Auditorium, Plaza Level 38 South Dearborn Street Chicago, IL 60602 Bring your ideas and questions. We're anxious to hear what's on your mind. -------------- COLUMBIA ACORN FUNDS SEMIANNUAL REPORT, JUNE 30, 2005 PRSRT STD U.S. POSTAGE PAID HOLLISTON, MA PERMIT NO. 20 -------------- [EAGLE HEAD LOGO] COLUMBIAFUNDS A MEMBETR OF COLUMBIA MANAGEMENT GROUP (c) 2005 COLUMBIA MANAGEMENT DISTRIBUTORS, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.661 WWW.COLUMBIAFUNDS.COM ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS The registrant's "Schedule I - Investments in securities of unaffiliated issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have not been any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, since those procedures were last disclosed in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officers, based on their evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Acorn Trust ------------------------------------------------------------------- By (Signature and Title) /S/ Charles P. McQuaid ------------------------------------------------------- Charles P. McQuaid, President Date August 24, 2005 --------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /S/ Charles P. McQuaid ------------------------------------------------------- Charles P. McQuaid, President Date August 24, 2005 --------------------------------------------------------------------------- By (Signature and Title) /S/ Bruce H. Lauer ------------------------------------------------------- Bruce H. Lauer, Treasurer Date August 24, 2005 ---------------------------------------------------------------------------