Summary
Prospectus
May 1, 2015
Columbia Acorn
Family of Funds
Managed by Columbia Wanger Asset Management, LLC
Columbia Thermostat
FundSM
| Class | Ticker Symbol | |
| Class A Shares | CTFAX | |
| Class B Shares | CTFBX | |
| Class C Shares | CTFDX | |
| Class R4 Shares | CTORX | |
| Class R5 Shares | CQTRX | |
| Class Y Shares | CYYYX | |
| Class Z Shares | COTZX |
Before you invest, you may want to review the Fund’s Prospectus, which
contains more information about the Fund and its risks. You can find the Fund’s Prospectus, Statement of Additional Information and other information about the Fund online at
https://www.columbiathreadneedleus.com/web/columbia/forms-literature/fund-literature. You can also get this information at no cost by calling 800.345.6611 or by sending an email to serviceinquiries@columbiathreadneedle.com. This Summary Prospectus
incorporates by reference the Fund’s Prospectus and Statement of Additional Information, both dated May 1, 2015.
As with all mutual funds, the Securities and Exchange
Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Investment Objective
Columbia Thermostat FundSM (the Fund) seeks long-term capital appreciation.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund. You may qualify for sales charge discounts if you and members of your immediate family invest, or agree to invest in the future, at least $50,000 in certain classes of shares of eligible funds distributed by
Columbia Management Investment Distributors, Inc. (the Distributor). More information about these and other discounts is available from your financial intermediary, and can be found in the Choosing a Share
Class section beginning on page 40 of the Fund’s prospectus and in Appendix S to the Statement of Additional Information (SAI) under Sales Charge Waivers beginning on page S-1.
| Shareholder Fees (fees paid directly from your investment) | ||||
| Class A | Class B | Class C | Classes
R4, R5, Y and Z | |
| Maximum sales charge (load) imposed on purchases (as a % of offering price) | 5.75% | None | None | None |
| Maximum deferred sales charge (load) imposed on redemptions (as a % of the lower of the original purchase price or current net asset value) | 1.00% (a) | 5.00% (b) | 1.00% (c) | None |
| Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | |||||||
| Class A | Class B | Class C | Class R4 | Class R5 | Class Y | Class Z | |
| Management fees | 0.10% | 0.10% | 0.10% | 0.10% | 0.10% | 0.10% | 0.10% |
| Distribution and/or service (12b-1) fees | 0.25% | 0.75% | 1.00% | 0.00% | 0.00% | 0.00% | 0.00% |
| Other expenses | 0.16% | 0.31% | 0.16% | 0.16% | 0.14% | 0.09% | 0.15% |
| Acquired fund fees and expenses | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% | 0.52% |
| Total annual Fund operating expenses(d) | 1.03% | 1.68% | 1.78% | 0.78% | 0.76% | 0.71% | 0.77% |
| Fee waivers and/or expense reimbursements(e) | (0.01%) | (0.16%) | (0.01%) | (0.01%) | 0.00% | 0.00% | 0.00% |
| Total annual Fund operating expenses after fee waivers and/or expense reimbursements | 1.02% | 1.52% | 1.77% | 0.77% | 0.76% | 0.71% | 0.77% |
| (a) | This charge is imposed on certain investments of between $1 million and $50 million redeemed within 18 months after purchase, as follows: 1.00% if redeemed within 12 months after purchase, and 0.50% if redeemed more than 12, but less than 18, months after purchase, with certain limited exceptions. |
| (b) | This charge decreases over time. |
| (c) | This charge applies to redemptions within one year after purchase, with certain limited exceptions. |
| (d) | “Total annual Fund operating expenses” include acquired fund (Portfolio Fund) fees and expenses (expenses the Fund incurs indirectly through its investments in other funds) and may be higher than “Total Net Expenses” shown in the Financial Highlights section of this prospectus because “Total Net Expenses” do not include Portfolio Fund (acquired fund) fees and expenses. |
| (e) | Columbia Wanger Asset Management, LLC (the Investment Manager) has contractually agreed to waive fees and reimburse certain expenses of the Fund so that ordinary operating expenses (excluding transaction costs and certain other investment-related expenses, interest and fees on borrowings and expenses associated with the Fund’s investment in the Portfolio Funds (acquired funds)), do not exceed the annual rates of 0.50% for Class A shares, 1.00% for Class B shares, 1.25% for Class C shares, 0.25% for Class R4 shares, 0.24% for Class R5 shares, 0.19% for Class Y shares and 0.25% for Class Z shares, through April 30, 2016. This arrangement may only be modified or amended with approval from all parties to the arrangement, including the Fund and the Investment Manager. |
Example
The following example is intended to help
you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example illustrates the hypothetical expenses that you would incur over the time periods indicated, and assumes that:
| ■ | you invest $10,000 in the applicable class of Fund shares for the periods indicated, |
| ■ | your investment has a 5% return each year, and |
| ■ | the Fund’s total annual operating expenses remain the same as shown in the Annual Fund Operating Expenses table above. |
| 1 | Columbia Thermostat FundSM |
Since the waivers and/or reimbursements
shown in the Annual Fund Operating Expenses table above expire as indicated in the preceding table, they are only reflected in the 1 year example and the first year of the other examples. Although your actual
costs may be higher or lower, based on the assumptions listed above, your costs would be:
| 1 year | 3 years | 5 years | 10 years | |
| Class A (whether or not shares are redeemed) | $673 | $883 | $1,110 | $1,761 |
| Class B (assuming redemption of all shares at the end of the period) | $655 | $814 | $1,098 | $1,801 |
| Class B (assuming no redemption of shares) | $155 | $514 | $ 898 | $1,801 |
| Class C (assuming redemption of all shares at the end of the period) | $280 | $559 | $ 964 | $2,094 |
| Class C (assuming no redemption of shares) | $180 | $559 | $ 964 | $2,094 |
| Class R4 (whether or not shares are redeemed) | $ 79 | $248 | $ 432 | $ 965 |
| Class R5 (whether or not shares are redeemed) | $ 78 | $243 | $ 422 | $ 942 |
| Class Y (whether or not shares are redeemed) | $ 73 | $227 | $ 395 | $ 883 |
| Class Z (whether or not shares are redeemed) | $ 79 | $246 | $ 428 | $ 954 |
Portfolio Turnover
The Fund will indirectly bear the expenses associated with
portfolio turnover of the underlying Portfolio Funds in which the Fund invests. Each Portfolio Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A Portfolio Fund’s
higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when its shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the
Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 95% of the average value of its portfolio.
Principal Investment Strategies
The Fund is primarily managed as a fund that invests in other
funds (i.e., a “fund-of-funds”) that seeks to achieve its investment objective by investing its assets among a selected group of underlying stock and bond mutual funds for which Columbia Wanger Asset Management, LLC, the Fund’s
investment adviser (the Investment Manager) or its affiliates, including Columbia Management Investment Advisers, LLC, serves as investment adviser or principal underwriter (the Portfolio Funds). Under normal circumstances, the Fund allocates at
least 95% of its net assets (stock/bond assets) among the Portfolio Funds according to the current level of Standard & Poor’s (S&P) 500® Index. Generally, when the S&P
500® Index goes up in relation to predetermined ranges set by the Investment Manager, the Fund sells a portion of its stock funds and invests more in the bond funds and when the S&P
500® Index goes down in relation to the ranges, the Fund increases its investment in the stock funds. Under normal circumstances, the Fund may invest up to 5% of net assets plus any cash
received that day in cash, high quality short-term paper and government securities.
Many asset allocation funds typically move assets from stocks
to bonds when the market goes up, and from bonds to stocks when the market goes down. Most asset allocation funds are run by sophisticated investment professionals, who make subjective decisions based on economic and financial data and complex
graphs of market behavior. By contrast, the day-to-day investment decisions for the Fund are made according to a single predetermined rule. The temperature in your house is run by a single rule: your thermostat turns on the furnace if your house is
too cold or turns on the air conditioner if your house is too warm. This Fund works the same way, so it is named Columbia Thermostat Fund.
Because the Fund invests according to a pre-set program, there
is no need for subjective day-to-day management. Although another successful asset allocation strategy might do better than the Fund, the Fund is designed for those who doubt the wisdom of trying to “time” the market and are unsure of
the long-term trend of the stock market. The Fund takes psychology out of investing; it avoids the temptation to buy more stocks because the stock market is currently going up or to sell stocks because the market is declining. The Fund operates
continuously and substantially automatically, subject to periodic review of the pre-set program by the Investment Manager and the Fund’s Board of Trustees. As described more fully below, the Investment Manager has the authority to review the
structure and allocation ranges of the stock/bond allocation table and to make any changes considered appropriate.
The Investment Manager chooses the Portfolio Funds to provide
participation in the major sectors of the stock market and the portions of the bond market it believes will preserve capital and generate returns. If you believe that the stock market will tend to go up most of the time, then you should probably own
a fully invested stock fund and use a buy-and-hold strategy. Buy-and-hold was an excellent strategy in the 1982-1999 bull market. However, there
| Columbia Thermostat FundSM | 2 |
have
been long periods in the past when buy-and-hold was not the best strategy, such as 1930-1954 and 1969-1981, when the market fluctuated but did not make significant new highs. The Fund may be a good investment choice for you if you believe that the
market will fluctuate significantly and provide modest to no secular growth for many years.
The Fund invests its stock/bond assets among the Portfolio
Funds according to an asset allocation table. The Investment Manager calibrates the allocation table such that stock percentages vary inversely with price-to-earnings ratios on “normalized” (long-term) earnings. Within a range of
10% to 90%, stock percentages rise towards maximum allocations as such price-to-earnings ratios fall towards historical lows, and stock percentages fall as such price-to-earnings ratios rise towards historical highs.
The Fund’s current allocation table is set forth
below.
| Stock/Bond Allocation Table | ||
| How
the Fund will Invest the Stock/Bond Assets | ||
| Level
of the S&P 500® Index |
Stock
Percentage |
Bond
Percentage |
| over 2225 | 10% | 90% |
| over 2150 – 2225 | 15% | 85% |
| over 2075 – 2150 | 20% | 80% |
| over 2000 – 2075 | 25% | 75% |
| over 1925 – 2000 | 30% | 70% |
| over 1850 – 1925 | 35% | 65% |
| over 1775 – 1850 | 40% | 60% |
| over 1700 – 1775 | 45% | 55% |
| over 1625 – 1700 | 50% | 50% |
| over 1550 – 1625 | 55% | 45% |
| over 1475 – 1550 | 60% | 40% |
| over 1400 – 1475 | 65% | 35% |
| over 1325 – 1400 | 70% | 30% |
| over 1250 – 1325 | 75% | 25% |
| over 1175 – 1250 | 80% | 20% |
| over 1100 – 1175 | 85% | 15% |
| 1100 and under | 90% | 10% |
When the S&P 500® Index moves into a new band on the table, the Fund will rebalance the stock/bond mix to reflect the new S&P 500® Index
price level by redeeming shares of some Portfolio Funds and purchasing shares of other Portfolio Funds. Any such rebalancing typically will be implemented promptly. However, there are two circumstances when a rebalancing may be implemented over a
longer timeline. First, when a rebalancing or allocation table change would trigger a 10% point or greater change in stock and bond allocations or individual Portfolio Funds, the rebalancing may be implemented over a period of up to two weeks, if
deemed by the Investment Manager to be in the best interest of shareholders. The second exception is a “31-day Rule;” in order to reduce taxable events, after the Fund has increased its percentage allocation to either stock funds or bond
funds, it will not decrease that allocation for at least 31 days. Following a change in the Fund's stock/bond mix, if the S&P 500® Index remains within the same band for a while,
normal market fluctuations will change the values of the Fund's holdings of stock Portfolio Funds and bond Portfolio Funds. The Investment Manager will invest cash flows from sales (or redemptions) of Fund shares to bring the stock/bond mix back
toward the allocation percentages for that S&P 500® Index band. For example, if the S&P 500® Index is in the
1150-1200 band, and the value of the holdings of the stock Portfolio Funds has dropped to 68% of the value of the holdings of all Portfolio Funds, the Investment Manager would invest new cash in the stock Portfolio Funds (or cash for redemptions
would come from the bond Portfolio Funds). If the 31-day Rule is in effect, the Investment Manager will invest new cash at the stock/bond percentage allocation as of the latest rebalancing.
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As an illustrative example, suppose the following:
| Date | Level
of the S&P 500® Index |
How
the Fund will invest the Stock/ Bond Assets |
| Nov. 1 | We begin when the market is 1680 | 50% stocks, 50% bonds |
| Dec. 1 | The S&P 500® goes to 1701 | rebalance 45% stocks, 55% bonds |
| Dec. 6 | The S&P 500® drops back to 1690 | no reversal for 31 days |
| Jan. 2 | The S&P 500® is at 1650 | rebalance 50% stocks, 50% bonds |
| Jan. 20 | The S&P 500® drops to 1620 | rebalance 55% stocks, 45% bonds |
| The market has made a continuation move by going through a second action level, not a reversal move, so the 31-day Rule does not apply in this case. | ||
| Jan. 30 | The S&P 500® goes up to 1630 | no reversal for 31 days |
| Feb. 20 | The S&P 500® is at 1640 | rebalance 50% stocks, 50% bonds |
The following
table shows the seven stock Portfolio Funds and four bond Portfolio Funds that the Fund currently uses in its “fund-of-funds” structure and the current allocation percentage for each Portfolio Fund within the stock or bond category. As
described more fully below, the Investment Manager may substitute or add additional Portfolio Funds at any time, including funds introduced after the date of this prospectus. The allocation percentage within each stock/bond category is achieved by
rebalancing the investments within the category whenever the S&P 500® Index moves into a new band on the allocation table, subject to the 31-day Rule described above. The Fund does
not liquidate its investment in one Portfolio Fund in order to invest in another Portfolio Fund except in connection with a rebalancing due to a move of the S&P 500® Index into a new
band (or due to a change by the Investment Manager in the stock/bond allocation table to the Portfolio Funds or to the relative allocation among them). Until a subsequent rebalancing, the Fund's investments in, and redemptions from, the stock
Portfolio Funds or the bond Portfolio Funds are allocated among the Portfolio Funds in a manner that will reduce any deviation of the relative values of the Fund's holdings of the Funds from the allocation percentages shown below.
| Allocation of Stock/Bond Asset Within Asset Classes | ||
| Type of Fund | Allocation | |
| Stock Funds | ||
| Columbia Acorn® Fund | Small/Mid-cap growth | 10% |
| Columbia Acorn International® | Small/Mid-cap international growth | 20% |
| Columbia Acorn SelectSM | Mid-cap growth | 10% |
| Columbia Contrarian Core Fund | Large-cap blend | 20% |
| Columbia Dividend Income Fund | Large-cap value | 20% |
| Columbia Large Cap Enhanced Core Fund | Large-cap blend | 10% |
| Columbia Select Large Cap Growth Fund | Large-cap growth | 10% |
| Total | 100% | |
| Bond Funds | Type of Fund | Allocation |
| Columbia Income Opportunities Fund | High-yield bond | 20% |
| Columbia Intermediate Bond Fund | Intermediate-term bond | 20% |
| Columbia Short Term Bond Fund | Short term bond | 40% |
| Columbia U.S. Government Mortgage Fund | Government bond | 20% |
| Total | 100% | |
See the Portfolio Funds Summary section of this prospectus for information about the Portfolio Funds’ investment objectives and principal investment strategies.
The Investment Manager has the authority to review the
Portfolio Funds and the relative stock/bond allocation percentages among them and to make any changes considered appropriate.
| Columbia Thermostat FundSM | 4 |
Each of the Portfolio Funds is currently managed by the
Investment Manager or its affiliates. The Fund does not pay any sales load on its purchases of shares of the Portfolio Funds. On an annual basis, or on an “emergency” basis if necessary, the Investment Manager reviews the structure,
allocation percentages and Portfolio Funds and makes any changes considered appropriate. The Investment Manager typically addresses the following questions:
| ■ | Should the stock/bond allocation table be revised (perhaps because the stock market has made a long-term move outside of the bands set forth above)? |
| ■ | Should there be a change in the Portfolio Funds or should there be a change in the percentage allocations among the stock/bond funds (perhaps because of a change of portfolio managers, change of investment style, change in relative valuation or a reorganization of a Portfolio Fund)? |
Any such changes by the
Investment Manager are expected to be infrequent.
Principal Risks
An investment in the Fund involves risk, including general
risks relating to the investment in the Fund based on its investment process and its "fund-of-funds" structure, as well as specific risks related to the individual Portfolio Funds, including those described below.
There is no assurance that the Fund will achieve its investment objective and you may lose money. The value of the Fund’s holdings may decline, and the Fund’s net asset value (NAV) and share price
may go down.
Allocation Risk. The Investment Manager uses an asset allocation strategy in pursuing the Fund’s investment objective. There is a risk that the Fund's allocation among asset classes or investments will cause the Fund's shares to
lose value or cause the Fund to underperform other funds with similar investment objectives and/or strategies, or that the investments themselves will not produce the returns expected.
Fund-of-Funds Risk.
Determinations regarding asset classes or underlying funds and the Fund’s allocations thereto may not successfully achieve the Fund’s investment objective, in whole or in part. The ability of the Fund to realize its investment objective
will depend, in large part, on the extent to which the underlying funds realize their investment objective. There is no guarantee that the underlying funds will achieve their respective investment objectives. The Fund is exposed to the same risks as
the underlying funds in direct proportion to the allocation of its assets among the underlying funds. By investing in a combination of underlying funds, the Fund has exposure to the risks of many areas of the market. The performance of underlying
funds could be adversely affected if other entities that invest in the same underlying funds make relatively large investments or redemptions in such underlying funds. The Fund, and its shareholders, indirectly bear a portion of the expenses of any
funds in which the Fund invests. Because the expenses and costs of each underlying fund are shared by its investors, redemptions by other investors in an underlying fund could result in decreased economies of scale and increased operating expenses
for such fund. The Investment Manager may have potential conflicts of interest in selecting affiliated funds over unaffiliated funds for investment by the Fund, and may also face potential conflicts of interest in selecting affiliated funds, because
the fees the Investment Manager receives from some underlying funds may be higher than the fees paid by other underlying funds. Further, because of the Investment Manager’s confidence in its own strategies, investment philosophy and
capacities, it will, in selecting underlying funds, at times prefer a fund in the Columbia Acorn Family of Funds over alternative investments. There can be no assurance, however, that a fund in the Columbia Acorn Family of Funds selected for
inclusion in Columbia Thermostat Fund’s portfolio will, in fact, outperform similar funds managed by the Investment Manager’s affiliates.
The Fund is subject indirectly to the following risks of the
Portfolio Funds:
Market Risk. Market risk refers to the possibility that the market values of securities or other investments that the Fund holds will fall, sometimes rapidly or unpredictably, or fail to rise. An investment in the Fund could
lose money over short or long periods. Although equity securities generally tend to have greater price volatility than debt securities, under certain market conditions, debt securities may have comparable or greater price volatility.
Interest Rate Risk.
Interest rate risk is the risk of losses attributable to changes in interest rates. In general, if prevailing interest rates rise, the values of debt securities tend to fall, and if interest rates fall, the values of debt securities tend to rise.
Changes in the value of a debt security usually will not affect the amount of income the Fund receives from it but will usually affect the value of the Fund's shares. In general, the longer the maturity or duration of a debt security, the
greater its sensitivity to changes in interest rates. Interest rate declines also may increase prepayments of debt obligations, which, in turn, would increase prepayment risk. Similarly, a period of rising interest rates may negatively impact the
Fund’s performance. Actions by governments and central banking authorities can result in increases in interest rates. Such actions may negatively affect the value of fixed-income securities held by the Fund, resulting in a negative impact on
the Fund's performance and NAV. Securities with floating interest rates are typically less sensitive to interest rate changes, but may decline in value if their interest rates do not rise as
| 5 | Columbia Thermostat FundSM |
much as
interest rates in general. Because rates on certain floating rate loans and other debt securities reset only periodically, changes in prevailing interest rates (and particularly sudden and significant changes) can be expected to cause fluctuations
in the Fund’s NAV.
Credit Risk. The value of fixed-income securities, or other instruments or assets, may decline if the issuer thereof defaults or otherwise becomes unable or unwilling, or is perceived to be unable or unwilling, to honor its
financial obligations, such as making payments to the Fund when due. Rating agencies assign credit ratings to certain fixed-income securities to indicate their credit risk. Lower quality or unrated securities held by the Fund may present increased
credit risk as compared to higher-rated securities. Non-investment grade fixed-income securities (commonly called “high-yield” or “junk”) are subject to greater price fluctuations and are more likely to experience a default
than investment grade securities and therefore may expose the Fund to increased credit risk. If the Fund purchases unrated securities, or if the ratings of securities held by the Fund are lowered after purchase, the Fund will depend on analysis of
credit risk more heavily than usual.
High-Yield
Securities Risk. Securities rated below investment grade (commonly called “high-yield” or “junk” bonds) and unrated securities of comparable quality expose the Fund to a greater risk of loss
of principal and income than a fund that invests solely or primarily in investment grade securities. In addition, these investments have greater price fluctuations, are less liquid and are more likely to experience a default than higher-rated
securities. High-yield securities are considered to be predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal.
Value Securities Risk.
Value securities are securities of companies that may have experienced, for example, adverse business, industry or other developments or may be subject to special risks that have caused the securities to be out of favor and, in turn, potentially
undervalued. The market value of a portfolio security may not meet the Investment Manager’s perceived value assessment of that security, or may decline in price, even though the Investment Manager believes the securities are already
undervalued. There is also a risk that it may take longer than expected for the value of these investments to rise to the portfolio manager’s perceived value. In addition, value securities, at times, may not perform as well as growth
securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Growth Securities Risk. Growth
securities typically trade at a higher multiple of earnings than other types of equity securities. Accordingly, the market values of growth securities may never reach their expected market value and may decline in price. In addition,
growth securities, at times, may not perform as well as value securities or the stock market in general, and may be out of favor with investors for varying periods of time.
Sector Risk. At times, the
Fund may have a significant portion of its assets invested in securities of companies conducting business in a related group of industries within an economic sector. Companies in the same economic sector may be similarly affected by
economic, regulatory, political or market events or conditions, which may make the Fund more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly. Generally, the more the Fund diversifies its
investments, the more it spreads risk and potentially reduces the risks of loss and volatility.
Foreign Securities Risk.
Investments in or exposure to foreign securities involve certain risks not associated with investments in or exposure to securities of U.S. companies. Foreign securities subject the Fund to the risks associated with investing in the particular
country of an issuer, including the political, regulatory, economic, social, diplomatic and other conditions or events occurring in the country or region, as well as risks associated with less developed custody and settlement practices. Foreign
securities may be more volatile and less liquid than securities of U.S. companies, and are subject to the risks associated with potential imposition of economic and other sanctions against a particular foreign country, its nationals or industries or
businesses within the country. The performance of the Fund may be negatively impacted by fluctuations in a foreign currency’s strength or weakness relative to the U.S. dollar, particularly to the extent the Fund invests a significant
percentage of its assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Operational and Settlement Risks of Foreign Securities. The Fund’s foreign securities are generally held outside the United States in the primary market for the securities in the custody of foreign sub-custodians. Some countries have limited governmental oversight and
regulation, which increases the risk of corruption and fraud and the possibility of losses to the Fund. In particular, under certain circumstances, foreign securities may settle on a delayed delivery basis, meaning that the Fund may be required to
make payment for securities before the Fund has actually received delivery of the securities or deliver securities prior to the receipt of payment. As a result, there is a risk that the security will not be delivered to the Fund or that payment will
not be received. Losses can also result from lost, stolen or counterfeit securities; defaults by brokers and banks; failures or defects of the settlement system; or poor and improper record keeping by registrars and issuers.
| Columbia Thermostat FundSM | 6 |
Share Blocking. In certain
non-U.S. markets, an issuer’s securities are blocked from trading for a specified number of days before and, in certain instances, after a shareholder meeting. The blocking period can last up to several weeks. Share blocking may prevent the
Fund from buying or selling securities during this period. As a consequence of these restrictions, the Investment Manager, on behalf of the Fund, may abstain from voting proxies in markets that require share blocking.
Emerging Market Securities Risk. Securities issued by foreign governments or companies in emerging market countries, such as China, Russia and certain countries in Eastern Europe, the Middle East, Asia, Latin America or Africa, are more
likely to have greater exposure to the risks of investing in foreign securities that are described in Foreign Securities Risk. In addition, emerging market countries are more likely to experience instability resulting, for example, from rapid
changes or developments in social, political, economic or other conditions. Their economies are usually less mature and their securities markets are typically less developed with more limited trading activity (i.e., lower trading volumes and less
liquidity) than more developed countries. Emerging market securities tend to be more volatile than securities in more developed markets. Many emerging market countries are heavily dependent on international trade and have fewer trading partners,
which makes them more sensitive to world commodity prices and economic downturns in other countries, and some have a higher risk of currency devaluations.
Operational and Settlement Risks of Securities in Emerging
Markets. Foreign sub-custodians in emerging markets may be recently organized, lack extensive operating experience or lack effective government oversight or regulation. In addition, there may be legal restrictions or
limitations on the ability of the Fund to recover assets held in custody by a foreign sub-custodian in the event of the bankruptcy of the sub-custodian. There may also be a greater risk that settlement may be delayed and that cash or securities of
the Fund may be lost because of failures of or defects in the system, including fraud or corruption. Settlement systems in emerging markets also have a higher risk of failed trades.
Risks Related to Currencies and Corporate Actions in Emerging
Markets. Risks related to currencies and corporate actions are also greater in emerging market countries than in developed countries. Emerging market currencies may not be traded and are subject to a higher risk of
currency devaluations.
Risks Related to Corporate
and Securities Laws in Emerging Markets. Securities laws in emerging markets may be relatively new and unsettled and, consequently, there is a risk of rapid and unpredictable change in laws regarding foreign
investment, securities regulation, title to securities and shareholder rights.
Liquidity and Trading Volume Risk. Due to market conditions, including uncertainty regarding the price of a security, it may be difficult for the Fund to buy or sell portfolio securities at a desirable time or price, which could result in investment
losses. This risk of portfolio illiquidity is heightened with respect to small- and mid-cap securities, generally, and foreign small- and mid-cap securities in particular. The Fund may have to lower the selling price, liquidate other investments, or
forego another, more appealing investment opportunity as a result of illiquidity in the markets. As a result of significant and sustained reductions in emerging and developed international market trading volumes in the wake of the 2007-2009
financial crisis, it may take longer to buy or sell securities, which can exacerbate the Fund’s exposure to volatile markets. The Fund may also be limited in its ability to execute favorable trades in portfolio securities in response to
changes in share prices and fundamentals, and may be forced to dispose of securities under disadvantageous circumstances and at a loss. As the Fund grows in size, these considerations take on increasing significance and may adversely impact
performance.
Foreign Currency Risk. The performance of the Fund may be materially affected positively or negatively by foreign currency strength or weakness relative to the U.S. dollar, particularly if the Fund invests a significant percentage of its
assets in foreign securities or other assets denominated in currencies other than the U.S. dollar.
Small- and Mid-Cap Company Securities Risk. Investments in small- and mid-capitalization companies (small- and mid-cap companies) often involve greater risks than investments in larger, more established companies (larger companies) because small- and mid-cap
companies tend to have less predictable earnings and may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. Securities of small- and mid-cap companies may be less liquid and
more volatile than the securities of larger companies.
U.S. Government Obligations Risk. While U.S. Treasury obligations are backed by the “full faith and credit” of the U.S. Government, such securities are nonetheless subject to credit risk (i.e., the risk that the U.S. Government may be, or be
perceived to be, unable or unwilling to honor its financial obligations, such as making payments). Securities issued or guaranteed by federal agencies or authorities and U.S. Government-sponsored instrumentalities or enterprises may or may not be
backed by the full faith and credit of the U.S. Government.
Derivatives Risk. Losses
involving derivative instruments may be substantial, because a relatively small movement in the price of an underlying security, instrument, commodity, currency or index may result in a substantial loss for the Fund. In addition to the potential for
increased losses, the use of derivative instruments may lead to increased
| 7 | Columbia Thermostat FundSM |
volatility for the Fund. Derivative investments will typically increase the
Fund’s exposure to principal risks to which it is otherwise exposed, and may expose the Fund to additional risks, including correlation risk, counterparty risk, hedging risk, leverage risk and/or liquidity risk.
Convertible Securities Risk.
Convertible securities are subject to the usual risks associated with debt securities, such as interest rate risk and credit risk. Convertible securities also react to changes in the value of the common stock into which they convert, and are thus
subject to market risk. The Fund may also be forced to convert a convertible security at an inopportune time, which may decrease the Fund’s return.
Forward Commitments on Mortgage-Backed Securities (including
Dollar Rolls) Risk. When purchasing mortgage-backed securities in the “to be announced” (TBA) market (MBS TBAs), the seller agrees to deliver mortgage-backed securities for an agreed upon price on an
agreed upon date, but may make no guarantee as to the specific securities to be delivered. In lieu of taking delivery of mortgage-backed securities, the Fund could enter into dollar rolls, which are transactions in which the Fund sells securities to
a counterparty and simultaneously agrees to purchase those or similar securities in the future at a predetermined price. Dollar rolls involve the risk that the market value of the securities the Fund is obligated to repurchase may decline below the
repurchase price, or that the counterparty may default on its obligations. These transactions may also increase the Fund’s portfolio turnover rate. If the Fund reinvests the proceeds of the security sold, the Fund will also be subject to the
risk that the investments purchased with such proceeds will decline in value (a form of leverage risk). MBS TBAs and dollar rolls are subject to counterparty risk (the risk that the counterparty to the instrument will not perform or be able to
perform in accordance with the terms of the instrument).
Mortgage- and Other Asset-Backed Securities Risk. The value of any mortgage-backed and other asset-backed securities held by the Fund may be affected by, among other things, changes or perceived changes in: interest rates; factors concerning the interests in and
structure of the issuer or the originator of the mortgages or other assets; the creditworthiness of the entities that provide any supporting letters of credit, surety bonds or other credit enhancements; or the market's assessment of the quality
of underlying assets. Payment of principal and interest on some mortgage-backed securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of a particular U.S. Government agency, authority,
enterprise or instrumentality, and some, but not all, are also insured or guaranteed by the U.S. Government. Mortgage-backed securities issued by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers) may entail greater risk than obligations guaranteed by the U.S. Government. Mortgage- and other asset-backed securities are subject to prepayment risk, which is the
possibility that the underlying mortgage or other asset may be refinanced or prepaid prior to maturity during periods of declining or low interest rates, causing the Fund to have to reinvest the money received in securities that have lower yields.
Rising or high interest rates tend to extend the duration of mortgage- and other asset-backed securities, making their prices more volatile and more sensitive to changes in interest rates.
Stripped Securities Risk.
Stripped securities are the separate income or principal components of debt securities. These securities are particularly sensitive to changes in interest rates, and therefore subject to greater fluctuations in price than typical interest bearing
debt securities.
Prepayment and Extension Risk. Prepayment and extension risk is the risk that a bond or other security or investment might, in the case of prepayment risk, be called or otherwise converted, prepaid or redeemed before maturity and, in the case of
extension risk, the investment might not be called as expected, and the portfolio managers may not be able to invest the proceeds in other investments providing as high a level of income, resulting in a reduced yield to the Fund. In the case of
mortgage- or asset-backed securities, as interest rates decrease or spreads narrow, the likelihood of prepayment increases. Conversely, extension risk is the risk that an unexpected rise in interest rates will extend the life of a mortgage- or
asset-backed security beyond the prepayment time. If the Fund’s investments are locked in at a lower interest rate for a longer period of time, the portfolio managers may be unable to capitalize on securities with higher interest rates or
wider spreads.
Reinvestment Risk. Reinvestment risk is the risk that the Fund will not be able to reinvest income or principal at the same return it is currently earning.
Depositary Receipts Risk.
Depositary receipts are receipts issued by a bank or trust company reflecting ownership of underlying securities issued by foreign companies. Some foreign securities are traded in the form of American Depositary Receipts (ADRs). Depositary receipts
involve risks similar to the risks associated with investments in foreign securities, including those associated with the particular country, which may be related to the particular political, regulatory, economic, social and other conditions or
events occurring in the country and fluctuations in its currency, as well as market risk tied to the underlying foreign company. In addition, ADR holders may have limited voting rights, may not have the same rights afforded typical company
stockholders in the event of a corporate action such as an acquisition, merger or rights offering and may experience difficulty in receiving company stockholder communications.
| Columbia Thermostat FundSM | 8 |
Derivatives Risk/Futures Contracts Risk. The loss that may be incurred in entering into futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the
volatility of the Fund’s NAV. Additionally, as a result of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses for the Fund. Futures
contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited
from executing a trade outside the daily permissible price movement. Futures contracts executed on foreign exchanges may not provide the same protection as U.S. exchanges. These transactions involve additional risks, including counterparty risk,
hedging risk and pricing risk.
Changing
Distribution Level Risk. The amount of the distributions paid by the Fund will vary and generally depends on the amount of interest income and/or dividends received by the Fund on the securities it holds. The Fund
may not be able to pay distributions or may have to reduce its distribution level if the interest income and/or dividends the Fund receives from its investments decline.
Rule 144A Securities Risk. The
Fund may invest significantly in privately placed “Rule 144A” securities that are determined to be liquid in accordance with procedures adopted by the Fund’s Board. However, an insufficient number of qualified institutional buyers
interested in purchasing Rule 144A securities at a particular time could affect adversely the marketability of such securities and the Fund might be unable to dispose of such securities promptly or at reasonable prices. Accordingly, even if
determined to be liquid, the Fund’s holdings of Rule 144A securities may increase the level of Fund illiquidity if eligible buyers become uninterested in buying them at a particular time. Issuers of Rule 144A securities are required to furnish
information to potential investors upon request. However, the required disclosure is much less extensive than that required of public companies and is not publicly available since it is not filed with the SEC. Further, issuers of Rule 144A
securities can require recipients of the information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security.
Frequent Trading Risk. The portfolio managers may actively and frequently trade investments in the Fund's portfolio to carry out its investment strategies. Frequent trading of investments increases the possibility that the Fund, as relevant,
will realize taxable capital gains (including short-term capital gains, which are generally taxable to shareholders at higher rates than long-term capital gains for U.S. federal income tax purposes), which could reduce the Fund's after-tax return.
Frequent trading can also mean higher brokerage and other transaction costs, which could reduce the Fund's return. The trading costs and tax effects associated with portfolio turnover may adversely affect the Fund’s performance.
Select Portfolio Risk. Because
the Fund may invest in a limited number of companies, the Fund as a whole is subject to greater risk of loss if any of its portfolio securities decline in price. In addition, the Fund’s holdings and weightings will diverge significantly from
its primary benchmark’s holdings and weightings and the Fund may therefore experience greater risk and volatility relative to the benchmark. Because the Fund may invest in more than one company concentrated in a similar industry, sector or
geographic region, the Fund may be even more concentrated than the number of companies it may hold would suggest.
Index Risk. The
Fund's value will generally decline when the performance of its targeted index declines. In addition, because the Fund may not hold all issues included in its index, it may not always be fully invested. The Fund also bears advisory,
administrative and other expenses and transaction costs in trading securities, which the index does not bear. Accordingly, the Fund's performance will likely fail to match the performance of its targeted index, after taking expenses into account. It
is not possible to invest directly in an index.
Highly Leveraged Transactions Risk. The loans or other securities in which the Fund invests may include highly leveraged transactions whereby the borrower assumes large amounts of debt in order to have the financial resources to attempt to achieve its
business objectives. Loans or securities that are part of highly leveraged transactions involve a greater risk (including default and bankruptcy) than other investments.
Issuer Risk. An issuer in
which the Fund invests or to which it has exposure may perform poorly, and the value of its securities may therefore decline, which would negatively affect the Fund’s performance. Poor performance may be caused by poor management decisions,
competitive pressures, breakthroughs in technology, reliance on suppliers, labor problems or shortages, corporate restructurings, fraudulent disclosures, natural disasters or other events, conditions or factors.
| 9 | Columbia Thermostat FundSM |
Performance Information
The following bar chart and table show you how the Fund has
performed in the past, and can help you understand the risks of investing in the Fund. The bar chart shows how the Fund’s Class Z share performance has varied for each full calendar year shown. The table below the bar chart compares the
Fund’s returns for the periods shown with those of the S&P 500® Index, the Fund’s primary benchmark for equity securities, the Barclays U.S. Aggregate Bond Index, the
Fund’s primary benchmark for debt securities, the Lipper Flexible Portfolio Funds Index and a 50/50 Blended Benchmark. The S&P 500® Index tracks the performance of 500 widely
held, large-capitalization U.S. stocks. The Barclays U.S. Aggregate Bond Index is a market value-weighted index that tracks the daily price, coupon, pay-downs, and total return performance of fixed-rate, publicly placed, dollar-denominated, and
non-convertible investment grade debt issues with at least $250 million par amount outstanding and with at least one year to final maturity. The Lipper Flexible Portfolio Funds Index is an equal-weighted index of the 30 largest mutual funds within
the Flexible Portfolio fund classification, as defined by Lipper, and shows how the Fund’s performance compares with the returns of an index of funds with similar investment objectives. The 50/50 Blended Benchmark was established by the
Investment Manager to show how the Fund’s performance compares to an equally weighted custom composite of the Fund’s primary equity and primary debt benchmarks, the S&P
500® Index and the Barclays U.S. Aggregate Bond Index, respectively. The percentage of the Fund’s assets allocated to underlying stock and bond Portfolio Funds will vary, and
accordingly the composition of the Fund’s portfolio will not always reflect the composition of the 50/50 Blended Benchmark.
The performance of one or more share classes shown in the Average Annual Total Returns table below includes the Fund’s Class Z share returns (adjusted to reflect the higher class-related operating expenses of such classes, where applicable) for periods prior to the
indicated inception date of such share classes. Except for differences in fees and expenses, all share classes of the Fund would have substantially similar annual returns because all share classes of the Fund invest in the same portfolio of
securities.
The after-tax returns shown in the Average Annual Total Returns table below are calculated using the highest historical individual U.S. federal marginal income tax rates and do not reflect the impact of state, local or foreign taxes. Your actual
after-tax returns will depend on your personal tax situation and may differ from those shown in the table. In addition, the after-tax returns shown in the table do not apply to shares held in tax-deferred accounts such as 401(k) plans or Individual
Retirement Accounts (IRAs). The after-tax returns are shown only for Class Z shares and will vary for other share classes.
The Fund’s past performance (before and after taxes) is no
guarantee of how the Fund will perform in the future. Updated performance information can be obtained by calling toll-free 800.345.6611 or visiting columbiathreadneedle.com/us.
| Year
by Year Total Return (%) as of December 31 Each Year* |
Best
and Worst Quarterly Returns During the Period Shown in the Bar Chart | ||
|
Best | 2nd Quarter 2009 | 19.33% |
| Worst | 4th Quarter 2008 | -19.26% | |
| * | Year to Date return as of March 31, 2015: 1.50% |
| Columbia Thermostat FundSM | 10 |
Average Annual Total Returns After Applicable Sales
Charges (for periods ended December 31, 2014)
| Share
Class Inception Date |
1 Year | 5 Years | 10 Years | |
| Class Z | 09/25/2002 | |||
| returns before taxes | 5.57% | 10.09% | 6.55% | |
| returns after taxes on distributions | 4.15% | 8.98% | 5.13% | |
| returns after taxes on distributions and sale of Fund shares | 3.34% | 7.70% | 4.83% | |
| Class A returns before taxes | 03/03/2003 | -0.75% | 8.54% | 5.66% |
| Class B returns before taxes | 03/03/2003 | -0.17% | 9.00% | 5.73% |
| Class C returns before taxes | 03/03/2003 | 3.50% | 9.00% | 5.49% |
| Class R4 returns before taxes | 11/08/2012 | 5.61% | 10.09% | 6.55% |
| Class R5 returns before taxes | 11/08/2012 | 5.62% | 10.11% | 6.56% |
| Class Y returns before taxes | 11/08/2012 | 5.68% | 10.14% | 6.57% |
| S&P 500® Index (reflects no deductions for fees, expenses or taxes) | 13.69% | 15.45% | 7.67% | |
| Barclays U.S. Aggregate Bond Index (reflects no deductions for fees, expenses or taxes) | 5.97% | 4.45% | 4.71% | |
| Lipper Flexible Portfolio Funds Index (reflects no deductions for taxes) | 4.31% | 8.80% | 6.11% | |
| 50/50 Blended Benchmark (an equally weighted custom composite of the Fund's primary benchmarks for equity and debt securities, established by the Investment Manager; reflects no deductions for fees, expenses or taxes) | 9.85% | 10.09% | 6.48% |
Fund Management
Investment Manager: Columbia
Wanger Asset Management, LLC
| Portfolio Manager | Title | Role with Fund | Service with the Fund Since | |||
| Charles P. McQuaid, CFA | Portfolio Manager and Analyst | Lead manager or co-manager since inception in 2002 | 2002 | |||
| Christopher J. Olson, CFA | Portfolio Manager and Analyst | Co-manager since 2014 | 2002 |
Purchase and Sale of Fund
Shares
You may purchase or redeem shares of the Fund on
any business day by contacting the Fund in the ways described below:
| Online | Regular Mail | Express Mail | By Telephone | |||
| columbiathreadneedle.com/us | Columbia
Funds, c/o Columbia Management Investment Services Corp. P.O. Box 8081 Boston, MA 02266-8081 |
Columbia
Funds, c/o Columbia Management Investment Services Corp. 30 Dan Road, Suite 8081 Canton, MA 02021-2809 |
800.422.3737 |
You may purchase shares and receive
redemption proceeds by electronic funds transfer, by check or by wire. If you maintain your account with a broker-dealer or other financial intermediary, you must contact that financial intermediary to buy, sell or exchange shares of the Fund
through your account with the intermediary.
The minimum
initial investment amounts for the share classes offered by the Fund are shown below:
Minimum Initial Investment
| Class | Category of eligible account | For
accounts other than systematic investment plan accounts |
For
systematic investment plan accounts |
| Classes A, B* & C | All accounts other than IRAs | $2,000 | $100 |
| IRAs | $1,000 | $100 | |
| Class R4 & Y | All eligible accounts | None | N/A |
| Class R5 | Combined underlying accounts of eligible registered investment advisers | $100,000 | N/A |
| Omnibus retirement plans | None | N/A | |
| Class Z | All eligible accounts | $0,
$1,000 or $2,000 depending upon the category of eligible investor |
$100 |
| 11 | Columbia Thermostat FundSM |
| * | Class B shares are generally closed to new and existing shareholders. |
There is no minimum additional investment for any share
class.
Tax Information
The Fund normally distributes net investment income and net
realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged account, such as a 401(k) plan or an IRA. The use of a
fund-of-funds structure could affect the timing, amount and character of distributions to you and therefore may increase the amount of taxes payable by you. If you are investing through a tax-advantaged account, you may be taxed upon withdrawals
from that account.
Payments to Broker-Dealers and Other
Financial Intermediaries
If you purchase the Fund
through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies – including the Investment Manager, the Distributor and Columbia Management Investment Services Corp. (the Transfer Agent) – may
pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your financial advisor to recommend the Fund over another investment.
These potential conflicts of interest may be heightened with respect to broker-dealers owned by Ameriprise Financial and/or its affiliates. In addition, the Fund compensates the Transfer Agent for the costs of shareholder services that vary across
financial intermediaries. The Fund seeks to provide such compensation to the Transfer Agent at levels it believes to be reasonable, but because of the variety of type and cost of services provided by different intermediaries, there can be no
assurance that the Fund is able to identify to which specific services the compensation relates. Ask your financial advisor or visit your financial intermediary's website for more information.
| Columbia Thermostat FundSM | 12 |
Columbia Acorn Family of
Funds
Columbia Threadneedle Investments is the global
brand name of the Columbia and Threadneedle group of companies.
All
rights reserved. Columbia Management Investment Distributors, Inc., 225 Franklin Street, Boston, MA 02110-2804
© 2015 Columbia Management Investment Advisers, LLC.
columbiathreadneedle.com/us
columbiathreadneedle.com/us
SUM235_12_E01_(05/15)