N-CSRS 1 file001.txt COLUMBIA FUNDS TRUST I 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 811-2214 --------------------- Columbia Funds Trust I ------------------------------------------------------------------------------ (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: October 31, 2004 ------------------ Date of reporting period: April 30, 2004 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. COLUMBIA TAX-MANAGED FUNDS SEMIANNUAL REPORT APRIL 30, 2004 Photo of Man & Woman Smiling [EAGLE HEAD LOGO] COLUMBIAFUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP TABLE OF CONTENTS A Closer Look .......................................... 1 Economic Update ........................................ 2 Columbia Tax-Managed Aggressive Growth Fund ......................................... 3 Columbia Tax-Managed Growth Fund ....................... 6 Columbia Tax-Managed Growth Fund II .................... 7 Columbia Tax-Managed Value Fund ........................ 10 Financial Statements ................................... 13 Investment Portfolio ................................ 14 Statements of Assets and Liabilities ................ 24 Statements of Operations ............................ 26 Statements of Changes in Net Assets ................. 27 Notes to Financial Statements ....................... 31 Financial Highlights ................................ 37 Shareholders Meeting Results ........................... 46 Important Information About This Report ................................... 47 Columbia Funds ......................................... 48 Economic and market conditions change frequently. There is no assurance that the trends described in this report will continue or commence. NOT FDIC MAY LOSE VALUE INSURED NO BANK GUARANTEE TO OUR FELLOW SHAREHOLDERS______________________________________________________ Columbia Tax-Managed Funds DEAR SHAREHOLDER: We are pleased to let you know that FleetBoston Financial Corporation and Bank of America Corporation have merged, effective April 1, 2004. As a result of the merger, Columbia Management Group became part of the Bank of America family of companies. Looking ahead, we believe this merger will be a real benefit to our shareholders. Preserving and leveraging our strengths, the combined organization intends to deliver additional research and management capabilities, as well as new products to you. There are no immediate changes planned for fund names or customer service contacts. As always, we will provide you with updates at www.columbiafunds.com or through other communications, such as newsletters and shareholder reports. As you might know, on March 15, 2004, FleetBoston Financial announced an agreement in principle with the staff of the Securities and Exchange Commission ("SEC") and the New York Attorney General to settle charges involving market timing in Columbia Management mutual funds. (Bank of America came to a similar settlement in principle at the same time.) The agreement requires the final approval of the SEC. This action reflects our full cooperation with the investigation and our strong wish to put this regrettable situation behind us. Columbia Management has taken and will continue to take steps to strengthen policies, procedures and oversight to curb frequent trading of Columbia fund shares. We want you to know that all of the members of your fund's Board of Trustees are independent of the fund's advisor and its affiliates. In addition, the board has been energetic over the past year in strengthening its capacity to oversee the Columbia funds. Recently, the Board of Trustees: o APPOINTED A CHIEF COMPLIANCE OFFICER OF THE COLUMBIA FUNDS, WHO REPORTS DIRECTLY TO EACH FUND'S AUDIT COMMITTEE. TRUSTEES WERE ALSO ASSIGNED TO FOUR SEPARATE INVESTMENT OVERSIGHT COMMITTEES, EACH DEDICATED TO MONITORING PERFORMANCE OF INDIVIDUAL FUNDS. o VOTED TO DOUBLE THE REQUIRED INVESTMENT BY EACH TRUSTEE IN THE COLUMBIA FUNDS -- TO FURTHER ALIGN THE INTERESTS OF THE TRUSTEES WITH THOSE OF OUR FUND SHAREHOLDERS. AT THE SAME TIME, NEW POLICIES WERE INSTITUTED REQUIRING ALL INVESTMENT PERSONNEL AND TRUSTEES TO HOLD THEIR COLUMBIA FUND SHARES FOR A MINIMUM OF ONE YEAR (UNLESS EXTRAORDINARY CIRCUMSTANCES WARRANT AN EXCEPTION TO BE GRANTED BY SENIOR EXECUTIVES OF THE ADVISOR FOR INVESTMENT PERSONNEL AND BY A DESIGNATED COMMITTEE FOR THE BOARD). Both your fund's trustees and Columbia Management are committed to serving the interests of our shareholders, and we will continue to work hard to help you achieve your financial goals. In the pages that follow, you'll find valuable information about the economic environment during the period and the performance of your Columbia fund. These discussions are followed by financial statements for your fund. We hope that you will take time to read this report and discuss it with your financial advisor if you have any questions. As always, thank you for choosing Columbia funds. It is a privilege to play a role in your financial future. Sincerely, /s/ Thomas C. Theobald /s/ J. Kevin Connaughton Thomas C. Theobald J. Kevin Connaughton Chairman, Board of Trustees President, Columbia Funds J. Kevin Connaughton was named president of Columbia Funds on February 27, 2004. COMPARING PRE-TAX AND AFTER-TAX RETURNS The chart on this page offers a comparison between pre-tax and after-tax returns. For those tax-managed funds with no taxable income distributions, the returns after taxes on distributions were the same as the pre-tax returns for the time periods shown. When a fund has distributed taxable income, the total returns after taxes on distributions will be different from the returns before taxes. THERE MAY BE FUTURE DISTRIBUTIONS In the future, any or all of these tax-managed funds may be required to distribute taxable income and capital gains. In addition, market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. Excessive shareholder redemptions may also require the funds to sell securities and realize gains. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. Past performance, before and after taxes, cannot predict future investment results. After-tax returns are calculated using the historically highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown, and the after-tax returns shown may not be relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. A CLOSER LOOK___________________________________________________________________ Columbia Tax-Managed Funds AVERAGE ANNUAL TOTAL RETURN, CLASS A SHARES WITH SALES CHARGE FOR THE PERIOD THAT ENDED 04/30/04 (%)
1-YEAR 5-YEAR LIFE ------- -------- ------- COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND (SINCE 08/01/00) Returns before taxes 12.92 n/a -11.78 Returns after taxes on distributions 12.92 n/a -11.78 Returns after taxes on distributions and sale of fund shares 8.40 n/a -9.73 Russell MidCap Growth Index 36.14 n/a -8.80 COLUMBIA TAX-MANAGED GROWTH FUND (SINCE 12/30/96) Returns before taxes 11.05 -4.48 3.41 Returns after taxes on distributions 11.05 -4.48 3.41 Returns after taxes on distributions and sale of fund shares 7.19 -3.75 2.95 S&P 500 Index 22.88 -2.26 6.97 COLUMBIA TAX-MANAGED GROWTH FUND II (SINCE 03/07/00) Returns before taxes 10.84 n/a -8.79 Returns after taxes on distributions 10.84 n/a -8.79 Returns after taxes on distributions and sale of fund shares 7.05 n/a -7.30 S&P 500 Index 22.88 n/a -3.33 COLUMBIA TAX-MANAGED VALUE FUND (SINCE 06/01/99) Returns before taxes 16.68 n/a -2.90 Returns after taxes on distributions 16.54 n/a -2.92 Returns after taxes on distributions and sale of fund shares 11.02 n/a -2.44 Russell 1000 Value Index 26.26 n/a 1.92
Indices do not reflect any deduction for fees, expenses or taxes. After-tax returns are shown for class A shares only; after-tax returns for other share classes will vary. TO THE SHAREHOLDERS OF COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH, COLUMBIA TAX-MANAGED GROWTH AND COLUMBIA TAX-MANAGED GROWTH II FUNDS We are pleased to report that these funds did not distribute taxable income to fund shareholders. This means that the individual pre-tax returns for these funds are the same as the returns after taxes on distributions. Since the inception of all of these funds to the date of this report, there has been no payment of taxable distributions. While we want to remind you that we can't guarantee this will always be the case, we are proud of our "non-taxing" track record and will strive to continue it. TO THE SHAREHOLDERS OF COLUMBIA TAX-MANAGED VALUE FUND This is the first time, since the fund's inception in June 1999, that the fund has reported a taxable income distribution. This means that fund's returns before taxes are higher than the fund's returns after taxes on distributions. Although we do our best to reduce the fund's shareholders exposure to taxes, it is important to note that from time to time the fund may be required to distribute taxable income and/or capital gains. 1 SUMMARY FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004 o STOCK MARKETS AROUND THE WORLD BENEFITED FROM A PICK-UP IN ECONOMIC GROWTH, BUT MOST OF THE GAINS FOR THE PERIOD WERE REPORTED IN 2003. BOTH THE S&P 500 Index and the MSCI EAFE INDEX POSTED SOLID RETURNS DESPITE WEAKNESS NEAR THE END OF THE PERIOD. S&P INDEX MSCI INDEX 6.27% 12.39% arrow up arrow up o PERFORMANCE IN THE FIXED-INCOME UNIVERSE WAS LED BY HIGH-YIELD BONDS, WHICH RETURNED 5.27% AS MEASURED BY THE MERRILL LYNCH US HIGH YIELD, CASH PAY INDEX. INVESTMENT GRADE BONDS EKED OUT A 1.25% RETURN, AS MEASURED BY THE LEHMAN BROTHERS AGGREGATE BOND INDEX. PERFORMANCE WAS HAMPERED BY THE THREAT OF HIGHER INTEREST RATES AHEAD. MERRILL LYNCH INDEX LEHMAN INDEX 5.27% 1.25% arrow up arrow up The S&P 500 Index is an unmanaged index that tracks the performance of 500 widely held, large capitalization US stocks. The MSCI EAFE Index is an unmanaged, market-weighted index composed of companies representative of the market structure of 21 developed market countries in Europe, Australasia and the Far East. The Merrill Lynch US High Yield, Cash Pay Index is an unmanaged index that tracks the performance of non-investment-grade corporate bonds. The Lehman Brothers Aggregate Bond Index is a market value-weighted index that tracks fixed-rate, publicly placed, dollar-denominated and non-convertible investment grade debt issues. ECONOMIC UPDATE_________________________________________________________________ Columbia Tax-Managed Funds The US economy moved ahead at a steady pace during the six-month period that began November 1, 2003 and ended April 30, 2004. Annualized GDP for the period was slightly higher than 4.0%--comfortably above the economy's long-term average growth rate of 3.0%. Inflation edged up, but remained relatively low. Consumer confidence was generally strong going into the period, but a prolonged period of sluggish job growth put a damper on confidence early in 2004. However, consumer spending on retail goods and autos remained strong, and the housing market continued to soar. When half a million new jobs were added to the economy in March and April, consumer confidence moved higher again, and buoyed the outlook for the economy in the second half of the year. The business sector also showed signs of improvement during the period. Industrial production registered steady gains. Business spending on technology rose. And late in the period, spending on capital equipment also picked up. US, FOREIGN STOCKS HEADED HIGHER The US stock market snapped a three-year losing streak in 2003. However, returns slowed early in 2004 in response to a mixed job outlook. When job growth was disappointing in January and February, investors worried about the economic recovery. Then, when job numbers soared in March and April, they grew concerned about interest rates. Renewed fears about terrorism also weighed on investor confidence. The S&P 500 Index returned 6.27% for this six-month period. In general, small and mid-cap stocks performed better than large-cap stocks. However, large-caps held up better when stocks retreated in April. Sector leadership also rotated during the period. After an extended period of strong performance, gold stocks and real estate investment trusts (REITs) retreated. Gold stocks were driven downward as the price of the precious metal plummeted. And REIT prices fell as investors took profits. Energy was the strongest performing industry sector of the US stock market, buoyed by the rising price of crude oil. Foreign stock markets did even better than the US stock market. The MSCI EAFE Index, a broad measure of performance of 21 developed equity markets in Europe, Australasia (which includes Australia and New Zealand) and the Far East, returned 12.39% for the period. European and Japanese stock markets were helped by a declining US dollar and a rebound in economic growth. BOND GAINS VARIED ACROSS SECTORS As the economy strengthened, interest rates rose sharply in the final month of the period. Investment grade bonds lost ground because bond prices and interest rates move in opposite directions. The Lehman Brothers Aggregate Bond Index, a broad measure of investment-grade bond performance, gained 1.25%. A strong economy was more good news than bad for the high-yield bond sector, which historically has been less vulnerable to the threat of higher interest rates than other fixed-income sectors. The six-month return for the Merrill Lynch US High Yield, Cash Pay Index was 5.27%. Money market yields remained below 1% as the Federal Reserve Board kept short-term interest rates at their historical lows. However, the period ended with the expectation that these key interest rates are likely to move higher now that the economy appears to be on solid ground. 2 PERFORMANCE OF A $10,000 INVESTMENT 08/01/00 - 04/30/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------ Class A 6,635 6,252 Class B 6,454 6,260 Class C 6,454 6,454 Class Z 6,661 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION________________________________________________________ Columbia Tax-Managed Aggressive Growth Fund VALUE OF A $10,000 INVESTMENT 08/01/00 - 04/30/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH RUSSELL MIDCAP S&P MIDCAP SALES CHARGE SALES CHARGE GROWTH INDEX 400 INDEX ------------ ------------ ------------ --------- $10000 $ 9425 $10000 $10000 11648 10978 11508 11117 11709 11035 10945 11041 10664 10051 10197 10667 8335 7856 7981 9862 8914 8401 8401 10616 9500 8954 8881 10853 7723 7279 7345 10233 6757 6368 6294 9473 7343 6921 7343 10518 7516 7083 7308 10763 7809 7360 7312 10720 7334 6912 6819 10560 6842 6448 6325 10215 5815 5480 5279 8944 6048 5700 5834 9339 6557 6180 6463 10034 6877 6481 6708 10553 6825 6433 6490 10498 6575 6196 6122 10511 6963 6563 6589 11262 6877 6481 6241 11209 6756 6367 6055 11020 6342 5977 5386 10213 5660 5334 4863 9222 5565 5245 4846 9270 5366 5058 4461 8522 5556 5237 4807 8891 5694 5366 5183 9406 5392 5082 4870 9020 5358 5050 4822 8756 5254 4952 4780 8548 5254 4952 4869 8620 5539 5220 5201 9245 5988 5643 5701 10012 6109 5757 5783 10139 6238 5879 5989 10499 6566 6189 6319 10976 6239 5880 6196 10808 6748 6360 6696 11625 6920 6522 6875 12029 6946 6547 6950 12233 7102 6693 7180 12498 7084 6677 7300 12798 6990 6588 7286 12852 6635 6252 7080 12430 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell MidCap Growth Index is an unmanaged index that measures the performance of those Russell MidCap companies with higher price-to-book ratios and higher forecasted growth values. The S&P MidCap 400 Index tracks the performance of mid-capitalization US stocks. This index was the fund's previous benchmark. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from August 1, 2000. AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z ----------------------------------------------------------------------------------------- INCEPTION 08/01/00 08/01/00 08/01/00 08/01/00 ----------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ----------------------------------------------------------------------------------------- 6-month (cumulative) -1.66 -7.35 -1.97 -6.87 -1.97 -2.95 -1.40 1-year 19.78 12.92 18.92 13.92 18.92 17.92 20.25 Life -10.37 -11.78 -11.03 -11.75 -11.03 -11.03 -10.27
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z ----------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ----------------------------------------------------------------------------------------- 6-month (cumulative) 12.03 5.61 11.60 6.60 11.61 10.61 12.14 1-year 33.00 25.39 32.16 27.16 32.21 31.21 33.50 Life -9.31 -10.77 -9.96 -10.70 -9.99 -9.99 -9.22
All results shown assume reinvestment of distributions. 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 for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. 3 SUMMARY o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE FUND'S CLASS A SHARES RETURNED NEGATIVE 1.66% WITHOUT SALES CHARGE. o THE FUND'S HIGH-QUALITY FOCUS AND OVERWEIGHT IN TECHNOLOGY DEPRESSED ITS RETURN RELATIVE TO ITS BENCHMARK AND PEER GROUP. o WE BELIEVE THE FUND'S EMPHASIS ON QUALITY HAS THE POTENTIAL TO HELP CUSHION THE FUND AGAINST VOLATILITY. RUSSELL MIDCAP CLASS A SHARES GROWTH INDEX -1.66% 5.74% arrow down arrow up OBJECTIVE Seeks long-term capital growth while reducing shareholder exposure to taxes TOTAL NET ASSETS $11.7 million NET ASSET VALUE PER SHARE AS OF 04/30/04 ($) Class A 7.69 Class B 7.48 Class C 7.48 Class Z 7.72 PORTFOLIO MANAGER'S REPORT______________________________________________________ Columbia Tax-Managed Aggressive Growth Fund For the six-month period ended April 30, 2004, Columbia Tax-Managed Aggressive Growth Fund class A shares returned negative 1.66% without sales charge. The fund came out behind the Russell MidCap Growth Index, which returned 5.74%. The fund also fell short of the Morningstar Mid-Cap Growth Funds Category average, which returned 3.30%.1 The fund's high-quality bias hurt its return during the first half of the period as low-quality stocks were the biggest beneficiaries of an improving economy. Later, the fund's overweight position in technology hindered performance as investors worried that the best times were over for this sector. Our disciplined focus on mid-cap stocks (with market capitalizations of $10 billion or less) also meant we missed out on strong returns from several larger-cap stocks in the Russell MidCap Growth Index. TECHNOLOGY WEIGHT AND TECHNOLOGY DISAPPOINTMENTS DEPRESSED FUND'S RETURN During the period, the fund's single largest position was in the technology sector, which typically does well when corporate spending picks up. However, after a strong run in the fourth quarter of 2003, technology stocks tumbled in the first quarter of 2004. Many were hurt by concerns that earnings growth, while good, was slowing. Companies that reported the slightest miss on earnings or revenues numbers, such as Amkor Technology and Foundry Networks, suffered sharp declines in their stock prices. Amkor Technology makes packaging for semiconductors, and Foundry Networks makes network switches. Comverse Technology, one of the fund's largest holdings, made little headway despite improving prospects in its voice mail software business. However, several of the technology stocks in the portfolio were strong performers. Amdocs, which develops billing software for telecommunications companies, and Lexmark International, which makes printers and cartridges, benefited from strong product demand. ADDITIONAL DISAPPOINTMENTS FROM BIOTECHNOLOGY AND CONSUMER STOCKS The fund also lost ground when selected biotechnology holdings declined as investors worried about whether they would deliver on earnings expectations. ICOS, a biotech company with a new drug called Cialis to treat erectile dysfunction, and Barr Pharmaceuticals, a generic drug manufacturer, also came under pressure as earnings growth slowed. In the consumer discretionary sector, retail investments, such as Bed Bath & Beyond, declined as investors worried that consumer spending had peaked. In addition, we lost ground by not owning larger-cap stocks such as Starbucks, which rallied sharply. 1 (C)2004 by Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 4 TOP 5 SECTORS AS OF 04/30/04 (%) Information technology 36.1 Health care 25.6 Consumer discretionary 12.9 Industrials 9.6 Energy 9.3 TOP 10 HOLDINGS AS OF 04/30/04 (%) Amphenol 2.3 Caremark Rx 2.1 DaVita 2.0 Comverse Technology 2.0 Amdocs 1.8 Medicis Pharmaceutical 1.8 Education Management 1.7 Bed Bath & Beyond 1.7 Microchip Technology 1.6 Univision Communications 1.6 Holdings and sector breakdowns are calculated as a percentage of net assets. HOLDINGS DISCUSSED IN THIS REPORT AS OF 04/30/04 (%) Amkor Technology 0.4 Foundry Networks 0.2 Comverse Technology 2.0 Amdocs 1.8 Lexmark International 1.1 ICOS 1.1 Barr Pharmaceuticals 1.3 Bed Bath & Beyond 1.7 National-Oilwell 1.6 XTO Energy 1.4 DaVita 2.0 Caremark Rx 2.1 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Tax-Managed Aggressive Growth Fund STRONG GAINS FROM ENERGY AND HEALTH CARE The fund had an above-average stake in energy stocks, which rallied amid high oil and natural gas commodity prices, increased demand and tight supplies. National-Oilwell, a supplier of components for drilling rigs, and XTO Energy, a producer of oil and natural gas, did especially well as spending on drilling increased. Overall, health care stocks, which were the fund's second largest sector weight, boosted performance. As investors shifted into sectors that were less sensitive to economic growth, DaVita, which runs kidney dialysis centers nationwide, and Caremark Rx, a leading pharmacy benefits manager, were stand-out performers. POSITIVE ECONOMIC OUTLOOK CLOUDED BY GEOPOLITICAL UNCERTAINTIES We expect economic growth to continue at a relatively strong pace, especially if higher profits fuel increased corporate spending. A positive economic outlook and rising earnings are typically good for stocks. However, geopolitical concerns, higher interest rates, the forthcoming presidential election and high oil and gas prices have the potential to result in further volatility. In this environment, we plan to continue our focus on high-quality stocks and economically-sensitive sectors. As a result, technology remains the largest weight in the portfolio. However, if inflation becomes a concern and corporate spending appears to peak, we would likely trim our technology stake and move a greater portion of the fund's assets into more defensive areas, such as health care and energy. [Photo of Richard Johnson] Richard Johnson, CFA, has managed Columbia Tax-Managed Aggressive Growth Fund since March 2002 and has been with the advisor and its predecessors since 1994. /s/ Richard F Johnson 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. The fund's approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 5 PERFORMANCE OF A $10,000 INVESTMENT 12/30/96 - 04/30/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------- Class A 13,571 12,791 Class B 12,847 12,847 Class C 12,837 12,837 Class E 13,502 12,894 Class F 12,857 12,857 Class Z 13,750 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Tax-Managed Growth Fund VALUE OF A $10,000 INVESTMENT 12/30/96 - 04/30/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH S&P 500 SALES CHARGE SALES CHARGE INDEX ------------ ------------ --------- $10000 $ 9425 $10000 9960 9387 9827 10386 9789 10441 10227 9639 10523 9672 9116 10090 9959 9387 10693 10723 10107 11344 11239 10593 11852 12131 11434 12795 11595 10928 12079 12349 11639 12741 11943 11256 12315 12221 11518 12885 12389 11677 13107 12627 11901 13252 13500 12724 14208 14086 13276 14935 14076 13267 15086 13728 12939 14827 14036 13229 15429 13926 13125 15265 11674 11003 13058 12429 11714 13895 13281 12517 15025 14204 13387 15935 15048 14183 16853 15227 14351 17557 15029 14165 17011 15743 14838 17692 16080 15155 18376 15732 14828 17943 17002 16024 18939 16575 15622 18348 16456 15510 18258 16148 15220 17757 17051 16071 18882 17240 16249 19265 19275 18166 20400 18342 17287 19375 18510 17446 19009 19532 18409 20868 18720 17643 20240 17827 16802 19825 18709 17633 20315 18670 17596 19998 19900 18756 21240 18907 17820 20118 18232 17184 20034 16130 15203 18455 16319 15380 18546 17459 16456 19204 15366 14482 17453 14166 13351 16346 15187 14314 17616 15128 14258 17734 14821 13969 17303 14673 13829 17134 13681 12894 16061 12183 11482 14763 12580 11857 15045 13642 12857 16199 13691 12904 16342 13354 12586 16103 13136 12381 15793 13672 12886 16386 12829 12091 15393 12749 12016 15280 11608 10941 14192 10825 10202 13086 10913 10286 13171 9892 9323 11739 10785 10165 12773 11460 10801 13525 10666 10053 12731 10527 9922 12397 10478 9875 12211 10617 10007 12330 11520 10857 13346 11986 11297 14049 11877 11194 14229 12205 11503 14479 12522 11802 14762 12254 11550 14605 12988 12242 15432 13117 12363 15568 13673 12887 16383 13902 13102 16685 14060 13252 16917 13901 13102 16661 13571 12791 16393 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The S&P 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from December 30, 1996. AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C E F Z -------------------------------------------------------------------------------------------------------------------------------- INCEPTION 12/30/96 12/30/96 12/30/96 12/30/96 12/30/96 01/11/99 -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT -------------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 4.51 -1.50 4.18 -0.82 4.10 3.10 4.53 -0.17 4.18 -0.82 4.68 1-year 17.83 11.05 17.09 12.09 17.00 16.00 17.84 12.53 17.07 12.07 18.26 5-year -3.34 -4.48 -4.05 -4.43 -4.06 -4.06 -3.39 -4.27 -3.98 -4.37 -3.10 Life 4.25 3.41 3.48 3.48 3.47 3.47 4.18 3.53 3.49 3.49 4.44
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C E F Z -------------------------------------------------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT -------------------------------------------------------------------------------------------------------------------------------- 6-month (cumulative) 13.44 6.92 12.95 7.95 12.95 11.95 13.34 8.24 13.02 8.02 13.52 1-year 30.93 23.41 30.00 25.00 30.00 29.00 30.80 24.91 29.94 24.94 31.27 5-year -2.46 -3.61 -3.19 -3.58 -3.19 -3.19 -2.52 -3.42 -3.11 -3.50 -2.21 Life 4.65 3.79 3.85 3.85 3.85 3.85 4.56 3.90 3.88 3.88 4.83
All results shown assume reinvestment of distributions. The "with sales charge" returns include the maximum 5.75% sales charge for class A shares, 4.50% for class E shares and the appropriate class B and class F 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 for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. Class Z share performance information includes returns for the fund's class A shares (as its expense structure more closely resembles that of the newer class) for periods prior to the inception of the newer class of shares. These class A share returns were not restated to reflect any expense differential (e.g., Rule 12b-1 fees) between class A and class Z shares. Had the expense differential been reflected, the returns for the periods prior to the inception of the class Z shares would have been higher. 6 PERFORMANCE OF A $10,000 INVESTMENT 03/07/00 - 04/30/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------- Class A 7,242 6,826 Class B 7,017 6,876 Class C 7,000 7,000 Class Z 7,308 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results.The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Tax-Managed Growth Fund II VALUE OF A $10,000 INVESTMENT 03/07/00 - 04/30/04 [MOUNTAIN CHART] CLASS A CLASS A SHARES WITHOUT SHARES WITH S&P 500 SALES CHARGE SALES CHARGE INDEX ------------ ------------ --------- $10000 $ 9425 $10000 10450 9849 10778 9859 9292 10454 9442 8899 10239 9866 9299 10492 9883 9315 10329 10492 9889 10970 10017 9441 10391 9625 9072 10347 8516 8027 9532 8666 8168 9578 9266 8733 9918 8091 7626 9014 7499 7068 8442 8075 7610 9098 8008 7547 9159 7832 7382 8937 7732 7287 8849 7207 6793 8295 6457 6086 7625 6599 6219 7771 7224 6808 8367 7307 6887 8440 7065 6659 8317 6990 6588 8157 7307 6887 8463 6865 6471 7950 6824 6431 7891 6257 5897 7330 5832 5497 6759 5849 5513 6803 5308 5002 6063 5783 5450 6597 6141 5788 6985 5700 5372 6575 5649 5325 6403 5608 5285 6307 5691 5364 6368 6158 5804 6893 6399 6031 7256 6341 5976 7349 6516 6141 7478 6691 6307 7624 6550 6173 7543 6941 6542 7970 6999 6597 8040 7300 6880 8462 7425 6998 8617 7508 7076 8737 7416 6990 8605 7242 6826 8468 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The S&P 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from March 7, 2000. AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z ----------------------------------------------------------------------------------- INCEPTION 03/07/00 03/07/00 03/07/00 03/07/00 ----------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ----------------------------------------------------------------------------------- 6-month (cumulative) 4.32 -1.70 3.95 -1.05 3.96 2.96 4.53 1-year 17.59 10.84 16.78 11.78 16.67 15.67 17.88 Life -7.49 -8.79 -8.19 -8.63 -8.24 -8.24 -7.28
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%) SHARE CLASS A B C Z ------------------------------------------------------------------------------------ SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ------------------------------------------------------------------------------------ 6-month (cumulative) 13.23 6.71 12.81 7.81 12.84 11.84 13.38 1-year 30.31 22.76 29.39 24.39 29.47 28.47 30.71 Life -7.09 -8.43 -7.79 -8.25 -7.84 -7.84 -6.88
All results shown assume reinvestment of distributions. 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 for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. 7 SUMMARY o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE CLASS A SHARES OF COLUMBIA TAX-MANAGED GROWTH FUND AND COLUMBIA TAX-MANAGED GROWTH FUND II RETURNED 4.51% AND 4.32% WITHOUT SALES CHARGE, RESPECTIVELY. GOOD STOCK SELECTION IN HEALTH CARE AND INDUSTRIAL SECTORS AIDED PERFORMANCE. o THE FUNDS' RETURNS WERE SLIGHTLY LOWER THAN THE RETURN OF THEIR BENCHMARK, THE S&P 500 Index. They were higher than the average return of their peer group, the Morningstar Large Growth Category. o ALTHOUGH TECHNOLOGY STOCKS WERE THE MARKET'S WORST PERFORMERS, GOOD STOCK SELECTION HELPED THE FUND'S TECHNOLOGY POSITIONS OUTPERFORM RELATIVE TO THEIR BENCHMARK. TAX-MANAGED GROWTH FUND NET ASSET VALUE PER SHARE AS OF 04/30/04 ($) Class A 13.68 Class B 12.95 Class C 12.94 Class E 13.61 Class F 12.96 Class Z 13.86 TAX-MANAGED GROWTH FUND II NET ASSET VALUE PER SHARE AS OF 04/30/04 ($) Class A 8.69 Class B 8.42 Class C 8.40 Class Z 8.77 TAX-MANAGED GROWTH FUND TOP 5 SECTORS AS OF 04/30/04 (%) Financials 20.5 Information technology 20.4 Health care 18.7 Industrials 12.3 Consumer staples 9.8 TAX-MANAGED GROWTH FUND II TOP 5 SECTORS AS OF 04/30/04 (%) Information technology 20.3 Financials 19.8 Health care 19.1 Industrials 13.2 Consumer staples 9.8 Sector breakdowns are calculated as a percentage of net assets. PORTFOLIO MANAGER'S REPORT______________________________________________________ Columbia Tax-Managed Growth Funds For the six-month period ended April 30, 2004, Columbia Tax-Managed Growth Fund class A shares returned 4.51% without sales charge. Columbia Tax-Managed Growth Fund II class A shares returned 4.32% without sales charge. The funds underperformed their benchmark, the S&P 500 Index, which returned 6.27% for the period. However, the funds' returns exceeded the average return of their peer group, the Morningstar Large Growth Category, which was 2.66%. 1 TECHNOLOGY STOCKS FOLLOWED STOCK MARKET TRENDS Driven by an expanding domestic economy and strong corporate profit growth, stock prices appreciated sharply throughout most of 2003 and into early 2004. However, as investors became concerned about inflationary pressures and the likelihood of rising interest rates, the stock market faltered near the end of the period. In an environment of increasing investor caution, technology stocks were the market's worst-performing sector. That hurt the funds' performance because technology was a significant holding for both funds. However, favorable stock selection in the technology sector helped the funds' relative returns. Our investments in Symantec, Electronic Arts and Lexmark International did much better than technology stocks overall during the period. Symantec, a leading vendor of computer security products, benefited from strong demand due to rising Internet usage and the increased incidence of computer viruses. Electronic Arts, a third-party video game publisher, was helped by a growing base of game consoles in use and by a steady stream of new and updated games. Increased Internet usage as well as an expanding base of digital camera users have boosted demand for Lexmark International's low cost, high quality printers. HEALTH CARE AND INDUSTRIAL SECTORS LED THE FUNDS' PERFORMANCE As in the prior reporting period, the funds had a significant position in health care stocks, which were the leading contributors to relative returns. Good stock selection within the sector aided returns, led by particularly good performances from Express Scripts, St. Jude Medical and Zimmer Holdings. During the period, we continued to add to health care with the purchase of Teva Pharmaceutical Industries and Eli Lilly & Co. The industrial sector was also a standout performer for the funds. We emphasized machinery stocks, which benefited from stronger global economic growth. Within the industrial sector, Eaton, Illinois Tool Works and Deere & Co. were each solid contributors during the period. 1 (C)2004 by Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 8 TAX-MANAGED GROWTH FUND TOP 10 HOLDINGS AS OF 04/30/04 (%) Wal-Mart Stores 3.3 Citigroup 3.2 Exxon Mobil 2.8 American International Group 2.7 Nabors Industries 2.6 St. Jude Medical 2.6 Microsoft 2.4 Zimmer Holdings 2.4 Bank of America 2.4 Illinois Tool Works 2.4 TAX-MANAGED GROWTH FUND II TOP 10 HOLDINGS AS OF 04/30/04 (%) Wal-Mart Stores 3.3 Citigroup 3.2 Exxon Mobil 2.9 American International Group 2.8 Nabors Industries 2.6 St. Jude Medical 2.6 Zimmer Holdings 2.6 Microsoft 2.5 General Electric 2.5 Pfizer 2.4 Holdings are calculated as a percentage of net assets. COLUMBIA COLUMBIA TAX- TAX- HOLDINGS DISCUSSED MANAGED MANAGED IN THIS REPORT AS GROWTH GROWTH OF 04/30/04 (%) FUND FUND II ------------------- -------- -------- Symantec 1.2 1.2 Electronic Arts 1.1 1.1 Lexmark International 1.9 1.9 Express Scripts 2.1 2.1 St. Jude Medical 2.6 2.6 Zimmer Holdings 2.4 2.6 Teva Pharmaceutical Industries 1.5 1.5 Eli Lilly & Co. 1.9 2.1 Eaton 2.2 2.1 Illinois Tool Works 2.4 2.3 Deere & Co. 1.9 1.8 Kohl's 1.9 1.9 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Tax-Managed Growth Funds RETAILING AND MEDIA STOCKS LAGGED The funds' investments in retailing and media stocks detracted from returns, primarily due to disappointing performances from Kohl's and Comcast. Kohl's recent operating results have been subpar in our opinion. However, we still hold the stock because it is attractively priced relative to our estimate of its future earning potential. We eliminated our position in Comcast because we were concerned about the company's acquisition strategy as well as increasing competition. POSITIVE OUTLOOK DESPITE HEADWINDS In our view, investors have been alternating between "glass is half full/half empty" scenarios. The positive view is that stocks are positioned to move higher because corporate profits are still experiencing strong growth. The negative view is that economic growth has been so strong that it could lead to higher inflation and higher interest rates, which could eventually create an environment of slower growth. We agree that current economic momentum is unsustainably high and that interest rates are likely to move up. But we also believe that some moderation in economic growth is healthy because it could help limit future Federal Reserve interest rate increases, thereby creating a more sustainable period of profit growth. Barring a major external event--and despite the uncertainty introduced by the forthcoming presidential election--we expect solid growth in the economy and in corporate profits well into next year. There is ample historical precedent to suggest that stocks could continue to appreciate even as interest rates begin to rise. And if investors become risk-averse because of an uncertain environment, we believe they are more likely to rotate back into the higher quality, large-cap stocks which make up the funds' core holdings. William M. Hughes is a senior equity analyst at Stein Roe Investment Counsel, sub-advisor to the funds. Mr. Hughes is also a member of the investment management team for Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II. No single individual has primary management responsibility over the funds' portfolio securities. /s/ William M. Hughes The funds' approach offers the potential for long-term growth, but also involves the possibility of losses due to the sensitivity of growth stock prices to changes in current or expected earnings. Certain active tax-reduction techniques are used only if the funds' advisor believes they will help the funds achieve their investment goals. The funds expect to distribute taxable income and capital gains from time to time. Market conditions may limit the funds' ability to generate tax losses or to avoid dividend income. The ability to use certain tax-managed techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 9 PERFORMANCE OF A $10,000 INVESTMENT 06/01/99 - 04/30/04 ($) SALES CHARGE WITHOUT WITH ------------ ------- ------ Class A 9,182 8,654 Class B 8,877 8,699 Class C 8,877 8,877 Class Z 9,305 n/a Performance data quoted represents past performance and current performance may be lower or higher. Past performance is no guarantee of future results. The investment return and principal value will fluctuate so that shares may be worth more or less than the original cost. Please visit www.columbiafunds.com for daily and most recent month-end performance updates. PERFORMANCE INFORMATION_________________________________________________________ Columbia Tax-Managed Value Fund VALUE OF A $10,000 INVESTMENT 06/01/99 - 04/30/04 [MOUNTAIN CHART] CLASS A SHARES WITHOUT CLASS A SALES SHARES WITH RUSSELL 1000 S&P 500 S&P 500/BARRA CHARGE SALES CHARGE VALUE INDEX INDEX VALUE INDEX --------- ------------ ----------- --------- ----------- $10000 $ 9425 $10000 $10000 $10000 10200 9614 10349 10616 10427 9733 9173 10046 10285 10107 9358 8820 9673 10234 9851 8641 8144 9335 9954 9466 8866 8356 9873 10584 10001 8799 8294 9796 10799 9942 8749 8246 9843 11435 10316 8357 7877 9522 10861 9988 7741 7295 8815 10656 9363 8624 8128 9890 11698 10340 8774 8269 9776 11346 10271 9215 8685 9878 11113 10303 8724 8222 9427 11388 9896 8607 8112 9545 11210 10094 9090 8567 10075 11906 10771 9124 8599 10168 11277 10769 9507 8960 10418 11230 10970 9440 8897 10032 10345 10408 9982 9408 10534 10396 10944 9940 9369 10574 10765 11406 9906 9337 10280 9783 10650 9565 9015 9917 9163 10229 9698 9140 10403 9875 10923 9881 9313 10637 9941 11038 9614 9061 10401 9699 10680 9864 9297 10379 9604 10495 9814 9249 9963 9003 9889 9447 8903 9262 8276 8949 9497 8951 9182 8434 8949 9863 9296 9716 9081 9517 9938 9367 9945 9161 9662 9722 9163 9868 9027 9397 9596 9044 9884 8853 9314 10088 9507 10352 9185 9791 9655 9100 9996 8629 9300 9621 9068 10046 8565 9337 8530 8039 9470 7955 8748 7822 7372 8589 7335 7802 7897 7443 8654 7383 7856 6780 6391 7692 6581 6958 7405 6979 8262 7160 7536 7997 7537 8783 7581 8066 7630 7192 8401 7136 7647 7347 6925 8198 6949 7437 6923 6525 7979 6845 7235 6898 6501 7993 6911 7226 7414 6988 8696 7481 7940 8014 7553 9258 7875 8525 8198 7726 9374 7976 8587 8156 7687 9513 8116 8778 8289 7812 9662 8275 8967 8122 7655 9567 8187 8805 8414 7930 10152 8650 9407 8497 8008 10291 8727 9492 9087 8564 10924 9184 10078 9213 8683 11117 9353 10257 9456 8913 11355 9483 10488 9415 8873 11255 9340 10416 9182 8654 10979 9189 10156 The graph and table do not reflect a deduction of the taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Russell 1000 Value Index is an unmanaged index that measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The S&P 500 Index tracks the performance of 500 widely held, large-capitalization US stocks. The S&P 500/Barra Value Index is constructed by dividing the stocks in the S&P 500 Index by a single attribute: price-to-book ratio. The value index contains firms with lower price-to-book ratios. The S&P 500 Index was the fund's previous benchmark. Unlike the fund, indices are not investments, do not incur fees or expenses and are not professionally managed. It is not possible to invest directly in an index. Securities in the fund may not match those in an index. Index performance is from June 1, 1999. AVERAGE ANNUAL TOTAL RETURN AS OF 04/30/04 (%)
SHARE CLASS A B C Z ---------------------------------------------------------------------------------------- INCEPTION 06/01/99 06/01/99 06/01/99 06/01/99 ---------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ---------------------------------------------------------------------------------------- 6-month (cumulative) 9.09 2.82 8.69 3.69 8.69 7.69 9.25 1-year 23.80 16.68 23.00 18.00 23.00 22.00 24.20 Life -1.72 -2.90 -2.40 -2.80 -2.40 -2.40 -1.46
AVERAGE ANNUAL TOTAL RETURN AS OF 03/31/04 (%)
SHARE CLASS A B C Z ---------------------------------------------------------------------------------------- SALES CHARGE WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT ---------------------------------------------------------------------------------------- 6-month (cumulative) 15.91 9.24 15.56 10.56 15.56 14.56 16.12 1-year 36.48 28.63 35.46 30.46 35.46 34.46 36.79 Life -1.23 -2.44 -1.91 -2.32 -1.91 -1.91 -0.97
All results shown assume reinvestment of distributions. 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 for different share classes will vary based on differences in sales charges and fees associated with each class. Performance results reflect any voluntary waivers or reimbursement of fund expenses by the advisor or its affiliates. Absent these waivers or reimbursement arrangements, performance results would have been lower. 10 SUMMARY o FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2004, THE FUND'S CLASS A SHARES RETURNED 9.09% WITHOUT SALES CHARGE. o THE FUND'S RETURN WAS HIGHER THAN ITS BENCHMARK, THE RUSSELL 1000 VALUE INDEX. o FUND PERFORMANCE WAS AIDED BY HEAVY ALLOCATIONS TO TOP-PERFORMING MARKET SECTORS AND INCREASED INTEREST IN DIVIDEND-PAYING COMPANIES. RUSSELL 1000 CLASS A SHARES VALUE INDEX 9.09% 8.15% arrow up arrow up OBJECTIVE Seeks long-term capital growth while reducing shareholder exposure to taxes TOTAL NET ASSETS $78.7 million NET ASSET VALUE PER SHARE AS OF 04/30/04 ($) Class A 10.93 Class B 10.65 Class C 10.65 Class Z 11.04 DISTRIBUTIONS DECLARED PER SHARE 11/01/03 - 04/30/04 ($) Class A 0.09 Class B 0.00* Class C 0.00* Class Z 0.12 * Rounds to less than $0.01 per share. PORTFOLIO MANAGERS' REPORT______________________________________________________ Columbia Tax-Managed Value Fund For the six-month period ended April 30, 2004, Columbia Tax-Managed Value Fund class A shares returned 9.09% without sales charge. The fund outperformed both the Russell 1000 Value Index, which returned 8.15%, and the Morningstar Large Value Category average, which was 7.72%. 1 A FAVORABLE INVESTMENT CLIMATE Although the economy's strong growth created a favorable investment climate for stocks, investors began to shift away from lower-quality companies, which had been the market leaders in 2003. As the economy moved from the recovery stage to solid growth, stocks of higher-quality companies, many of which pay dividends, began to outperform. The fund's exposure to these types of stocks helped it outperform its benchmark. SECTOR SELECTION AIDS PERFORMANCE The portfolio's holdings in the utilities, health care and energy sectors were especially important to overall performance. Among utility companies, Texas Utilities (TXU) negotiated attractive asset sales as it continued to restructure its business. Duke Energy also posted a solid gain. We bought the stock late last summer, when it was attractively priced, and we sold it during the period because it had met our price objective. In the health care sector, the fund's most important holding was Aetna. The company had experienced significant erosion in its customer base. A new management team came in, lowered costs and turned the business around. Aetna has been a significant position for the fund for some time now, and while we have trimmed the position several times to capture gains from the stock's appreciation, we believe it may have further to go. Within the energy sector, we maintained an overweight position in energy service. However, we sold Baker Hughes following an impressive upward move. Our investments in integrated oil companies also fared well as oil prices rose. Because oil production is declining in the United States, we have gained exposure to international oil companies such as British Petroleum (BP PLC) and Royal Dutch Petroleum, both of which contributed to the fund's return during the period. FINANCIAL STOCKS WERE DISAPPOINTING Financial stocks, which account for almost one-third of the portfolio, moved slightly higher during the period. However, they trailed overall index performance as increasing investor optimism about the economy translated into fears of higher interest rates. Shares of credit card 1 (C)2004 by Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 11 TOP 5 SECTORS AS OF 04/30/04 (%) Financials 32.1 Energy 12.7 Industrials 10.6 Consumer staples 9.7 Consumer discretionary 8.5 TOP 10 HOLDINGS AS OF 04/30/04 (%) Citigroup 4.9 Exxon Mobil 3.1 ConocoPhillips 2.4 BP PLC 2.4 Wells Fargo & Co. 2.2 American International Group 2.2 Halliburton 2.1 Aetna 2.1 U.S. Bancorp 2.0 Waste Management 1.9 Holdings and sector breakdowns are calculated as a percentage of net assets. HOLDINGS DISCUSSED IN THIS REPORT AS OF 04/30/04 (%) TXU 1.6 Aetna 2.1 BP PLC 2.4 Royal Dutch Petroleum 1.0 MBNA 1.0 Merrill Lynch & Co. 1.5 Morgan Stanley 1.2 American International Group 2.2 Your fund is actively managed and the composition of its portfolio will change over time. Information provided is calculated as a percentage of net assets. ________________________________________________________________________________ Columbia Tax-Managed Value Fund company MBNA, a new holding for the portfolio, fell over 10% toward the end of the period. Our holdings in leading financial institutions Merrill Lynch & Co. and Morgan Stanley also came under pressure. Not all financial stocks underperformed, however. International insurer American International Group posted a strong gain, as its core business is substantially insulated from short-term shifts in rates. A GUARDED OUTLOOK Our outlook for the period ahead is somewhat cautious. The marked improvement in the job market near the end of the period points to the possibility of higher interest rates. We also believe that profit margins may have reached a near-term peak and that earnings growth may slow going forward. However, we believe that dividends have the potential to become an increasingly more important component of total return. Our emphasis on high-quality, dividend-paying companies should perform well in such an environment. Dividend payouts have been on the rise since Congress reduced the tax on dividends in 2003, and we expect that trend to continue. In keeping with our cautious outlook, we have also increased the number of holdings in the fund by about 15% in an effort to reduce risk in what has become a highly uncertain market. However, we did not make any significant changes to our sector allocations during the period because we continue to believe that keeping our allocations relatively close to index weights is another way of limiting the fund's overall volatility. Gregory M. Miller has co-managed Richard Dahlberg has co-managed the Columbia Tax-Managed Value Fund fund since October 2003 and has been since April 2003 and has been with the with the advisor since September 2003. advisor and its predecessors since 1985. /s/ Gregory M. Miller /s/ Richard E. Dahlberg Brian Cunningham has co-managed the fund since November 2003 and has been with the advisor and its predecessors since 1987. /s/ Brian Cunningham Value stocks are securities of companies that may have experienced adverse business or industry developments or may be subject to special risks that have caused the stocks to be out of favor. If the advisor's assessment of a company's prospects is wrong, the price of its stock may not approach the value the advisor has placed on it. Certain active tax-reduction techniques are used only if the fund's advisor believes they will help the fund achieve its investment goals. The fund expects to distribute taxable income and capital gains from time to time. Market conditions may limit the fund's ability to generate tax losses or to avoid dividend income. The ability to use certain tax-management techniques may be curtailed or eliminated in the future by tax legislation, regulations, administrative interpretations or court decisions. 12 FINANCIAL STATEMENTS____________________________________________________________ April 30, 2004 Columbia Tax-Managed Funds A GUIDE TO UNDERSTANDING YOUR FUND'S FINANCIAL STATEMENTS INVESTMENT PORTFOLIO The investment portfolio details all of the fund's holdings and their market value as of the last day of the reporting period. Portfolio holdings are organized by type of asset, industry, country or geographic region (if applicable) to demonstrate areas of concentration and diversification. STATEMENT OF ASSETS This statement details the fund's assets, AND LIABILITIES liabilities, net assets and share price for each share class as of the last day of the reporting period. Net assets are calculated by subtracting all the fund's liabilities (including any unpaid expenses) from the total of the fund's investment and non-investment assets. The share price for each class is calculated by dividing net assets for that class by the number of shares outstanding in that class as of the last day of the reporting period. STATEMENT OF OPERATIONS This statement details income earned by the fund and the expenses accrued by the fund during the reporting period. The Statement of Operations also shows any net gain or loss the fund realized on the sales of its holdings during the period, as well as any unrealized gains or losses recognized over the period. The total of these results represents the fund's net increase or decrease in net assets from operations. STATEMENT OF CHANGES This statement demonstrates how the fund's net IN NET ASSETS assets were affected by its operating results, distributions to shareholders and shareholder transactions (e.g., subscriptions, redemptions and dividend reinvestments) during the reporting period. The Statement of Changes in Net Assets also details changes in the number of shares outstanding. NOTES TO FINANCIAL These notes disclose the organizational background STATEMENTS of the fund, its significant accounting policies (including those surrounding security valuation, income recognition and distributions to shareholders), federal tax information, fees and compensation paid to affiliates and significant risks and contingencies. FINANCIAL HIGHLIGHTS The financial highlights demonstrate how the fund's net asset value per share was affected by the fund's operating results. The financial highlights table also discloses the classes' performance and certain key ratios (e.g., class expenses and net investment income as a percentage of average net assets). 13 INVESTMENT PORTFOLIO____________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - 98.1% CONSUMER DISCRETIONARY - 12.9% AUTO COMPONENTS - 3.4% Autoliv, Inc. 3,760 159,913 Dana Corp. 5,600 112,896 Gentex Corp. 3,220 126,643 ----------- Auto Components Total 399,452 HOTELS, RESTAURANTS & LEISURE - 2.3% Harrah's Entertainment, Inc. 1,300 69,134 Hilton Hotels Corp. 3,430 59,991 International Game Technology 1,320 49,817 MGM Mirage 1,870 85,665 ----------- Hotels, Restaurants & Leisure Total 264,607 HOUSEHOLD DURABLES - 0.9% Garmin Ltd. 3,190 102,590 ----------- Household Durables Total 102,590 LEISURE EQUIPMENT & PRODUCTS - 0.9% Brunswick Corp. 2,430 99,897 ----------- Leisure Equipment & Products Total 99,897 MEDIA - 1.6% Univision Communications, Inc., Class A (a) 5,510 186,513 ----------- Media Total 186,513 MULTILINE RETAIL - 0.6% Dollar Tree Stores, Inc. (a) 2,790 75,190 ----------- Multiline Retail Total 75,190 SPECIALTY RETAIL - 3.2% Bed Bath & Beyond, Inc. (a) 5,230 194,138 Staples, Inc. 3,190 82,174 Williams-Sonoma, Inc. (a) 2,970 96,466 ----------- Specialty Retail Total 372,778 ----------- CONSUMER DISCRETIONARY TOTAL 1,501,027 CONSUMER STAPLES - 0.7% FOOD PRODUCTS - 0.7% Dean Foods Co. (a) 2,330 78,241 ----------- Food Products Total 78,241 ----------- CONSUMER STAPLES TOTAL 78,241 ENERGY - 9.3% ENERGY EQUIPMENT & SERVICES - 5.0% BJ Services Co. (a) 2,620 116,590 Nabors Industries Ltd. (a) 2,120 94,043 National-Oilwell, Inc. (a) 6,680 186,506 Patterson-UTI Energy, Inc. (a) 3,570 129,198 Rowan Companies, Inc. (a) 2,700 60,210 ----------- Energy Equipment & Services Total 586,547 SHARES VALUE ($) ---------- ----------- OIL & GAS - 4.3% Apache Corp. 2,380 99,651 Ashland, Inc. 1,700 81,430 Murphy Oil Corp. 2,230 152,755 XTO Energy, Inc. 6,200 165,540 ----------- Oil & Gas Total 499,376 ----------- ENERGY TOTAL 1,085,923 FINANCIALS - 1.1% INSURANCE - 1.1% Ambac Financial Group, Inc. 1,930 133,170 ----------- Insurance Total 133,170 ----------- FINANCIALS TOTAL 133,170 HEALTH CARE - 25.6% BIOTECHNOLOGY - 3.0% Affymetrix, Inc. (a) 1,560 47,674 Amylin Pharmaceuticals, Inc. (a) 7,600 170,240 ICOS Corp. (a) 4,020 128,600 ----------- Biotechnology Total 346,514 HEALTH CARE EQUIPMENT & SUPPLIES - 6.0% Boston Scientific Corp. (a) 2,990 123,158 Fisher Scientific International, Inc. (a) 1,600 93,680 Kinetic Concepts, Inc. (a) 2,500 121,000 Smith & Nephew PLC 6,200 63,044 Varian Medical Systems, Inc. (a) 2,030 174,255 Zimmer Holdings, Inc. (a) 1,630 130,156 ----------- Health Care Equipment & Supplies Total 705,293 HEALTH CARE PROVIDERS & SERVICES - 9.0% Anthem, Inc. (a) 1,050 93,009 Caremark Rx, Inc. (a) 7,180 243,043 Community Health Systems, Inc. (a) 4,920 126,887 DaVita, Inc. (a) 4,600 235,060 Manor Care, Inc. 4,180 135,599 McKesson Corp. 2,100 69,006 UnitedHealth Group, Inc. 2,510 154,315 ----------- Health Care Providers & Services Total 1,056,919 PHARMACEUTICALS - 7.6% Barr Pharmaceuticals, Inc. (a) 3,570 147,869 Elan Corp. PLC, ADR (a) 7,600 164,160 Endo Pharmaceuticals Holdings, Inc. (a) 5,100 121,737 IVAX Corp. (a) 5,660 120,558 Medicis Pharmaceutical Corp., Class A 4,800 206,016 Teva Pharmaceutical Industries Ltd., ADR 1,990 122,504 ----------- Pharmaceuticals Total 882,844 ----------- HEALTH CARE TOTAL 2,991,570 See notes to investment portfolio. 14 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) INDUSTRIALS - 9.6% AEROSPACE & DEFENSE - 0.3% L-3 Communications Holdings, Inc. 600 37,044 ----------- Aerospace & Defense Total 37,044 BUILDING PRODUCTS - 0.8% Masco Corp. 3,300 92,433 ----------- Building Products Total 92,433 COMMERCIAL SERVICES & SUPPLIES - 5.3% Allied Waste Industries, Inc. (a) 12,170 153,220 Corporate Executive Board Co. 2,820 145,653 Education Management Corp. (a) 5,560 197,158 Manpower, Inc. 2,560 120,064 ----------- Commercial Services & Supplies Total 616,095 ELECTRICAL EQUIPMENT - 1.0% American Power Conversion Corp. 6,170 115,132 ----------- Electrical Equipment Total 115,132 MACHINERY - 1.4% Donaldson Co., Inc. 6,000 164,580 ----------- Machinery Total 164,580 TRADING COMPANIES & DISTRIBUTORS - 0.8% Fastenal Co. 1,790 98,217 ----------- Trading Companies & Distributors Total 98,217 ----------- INDUSTRIALS TOTAL 1,123,501 INFORMATION TECHNOLOGY - 36.1% COMMUNICATIONS EQUIPMENT - 5.9% 3Com Corp. (a) 15,220 93,755 Advanced Fibre Communications, Inc. (a) 1,500 25,050 Andrew Corp. (a) 3,100 52,545 Avaya, Inc. (a) 7,400 101,232 Comverse Technology, Inc. (a) 14,100 230,676 Foundry Networks, Inc. (a) 2,330 26,329 Polycom, Inc. (a) 8,220 156,838 ----------- Communications Equipment Total 686,425 COMPUTERS & PERIPHERALS - 1.1% Lexmark International, Inc. (a) 1,380 124,835 ----------- Computers & Peripherals Total 124,835 ELECTRONIC EQUIPMENT & INSTRUMENTS - 7.8% Agilent Technologies, Inc. (a) 6,800 183,668 Amphenol Corp., Class A (a) 8,560 270,582 CDW Corp. 2,810 175,597 Flextronics International Ltd. (a) 6,080 97,888 Symbol Technologies, Inc. 2,430 29,160 Vishay Intertechnology, Inc. (a) 8,580 149,292 ----------- Electronic Equipment & Instruments Total 906,187 SHARES VALUE ($) ---------- ----------- INTERNET SOFTWARE & SERVICES - 1.0% Check Point Software Technologies Ltd. (a) 5,020 117,619 ----------- Internet Software & Services Total 117,619 IT SERVICES - 0.8% DST Systems, Inc. (a) 2,150 94,922 ----------- IT Services Total 94,922 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 8.9% Altera Corp. (a) 4,460 89,245 Amkor Technology, Inc. (a) 5,590 45,167 ARM Holdings PLC, ADR 9,530 58,705 ASML Holding NV, N.Y. Registered Shares (a) 7,680 119,424 Fairchild Semiconductor International, Inc. (a) 6,600 128,502 Microchip Technology, Inc. 6,720 188,294 National Semiconductor Corp. (a) 2,780 113,396 NVIDIA Corp. (a) 3,640 74,766 Teradyne, Inc. (a) 3,810 77,648 United Microelectronics Corp., ADR (a) 28,360 147,472 ----------- Semiconductors & Semiconductor Equipment Total 1,042,619 SOFTWARE - 10.6% Amdocs Ltd. (a) 7,990 212,134 BEA Systems, Inc. (a) 7,870 89,797 BMC Software, Inc. (a) 4,720 81,656 Fair Isaac Corp. 5,250 177,030 Hyperion Solutions Corp. (a) 1,500 57,570 Mercury Interactive Corp. (a) 3,490 148,499 Novell, Inc. (a) 10,880 104,883 Siebel Systems, Inc. (a) 9,480 97,454 Symantec Corp. (a) 2,750 123,887 Synopsys, Inc. (a) 900 24,057 VERITAS Software Corp. (a) 4,780 127,483 ----------- Software Total 1,244,450 ----------- INFORMATION TECHNOLOGY TOTAL 4,217,057 MATERIALS - 1.8% CHEMICALS - 0.7% Potash Corp. of Saskatchewan, Inc. 1,060 86,348 ----------- Chemicals Total 86,348 METALS & MINING - 1.1% Peabody Energy Corp. 2,600 121,914 ----------- Metals & Mining Total 121,914 ----------- MATERIALS TOTAL 208,262 See notes to investment portfolio. 15 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Aggressive Growth Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) TELECOMMUNICATION SERVICES - 1.0% WIRELESS TELECOMMUNICATION SERVICES - 1.0% Nextel Partners, Inc., Class A (a) 8,550 114,142 ----------- Wireless Telecommunication Services Total 114,142 ----------- TELECOMMUNICATION SERVICES TOTAL 114,142 TOTAL COMMON STOCKS (Cost of $9,698,380) 11,452,893 INVESTMENT COMPANY - 0.5% iShares MSCI Japan Index Fund (Cost of $55,790) 5,990 60,739 ----------- TOTAL INVESTMENTS - 98.6% (Cost of $9,754,170) (b) 11,513,632 OTHER ASSETS & LIABILITIES, NET - 1.4% 157,080 NET ASSETS - 100.0% 11,670,712 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See notes to financial statements. 16 INVESTMENT PORTFOLIO____________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - 98.0% CONSUMER DISCRETIONARY - 8.1% MEDIA - 4.3% Univision Communications, Inc., Class A (a) 197,000 6,668,450 Viacom, Inc., Class B 181,872 7,029,353 ----------- Media Total 13,697,803 MULTILINE RETAIL - 1.9% Kohl's Corp. (a) 148,000 6,184,920 ----------- Multiline Retail Total 6,184,920 SPECIALTY RETAIL - 1.9% Lowe's Companies, Inc. 114,000 5,934,840 ----------- Specialty Retail Total 5,934,840 ----------- CONSUMER DISCRETIONARY TOTAL 25,817,563 CONSUMER STAPLES - 9.8% FOOD & STAPLES RETAILING - 5.6% Walgreen Co. 213,000 7,344,240 Wal-Mart Stores, Inc. 184,800 10,533,600 ----------- Food & Staples Retailing Total 17,877,840 HOUSEHOLD PRODUCTS - 4.2% Colgate-Palmolive Co. 110,000 6,366,800 Procter & Gamble Co. 64,500 6,820,875 ----------- Household Products Total 13,187,675 ----------- CONSUMER STAPLES TOTAL 31,065,515 ENERGY - 6.4% ENERGY EQUIPMENT & SERVICES - 3.6% Nabors Industries Ltd. (a) 185,000 8,206,600 Noble Corp. (a) 90,000 3,344,400 ----------- Energy Equipment & Services Total 11,551,000 OIL & GAS - 2.8% Exxon Mobil Corp. 206,000 8,765,300 ----------- Oil & Gas Total 8,765,300 ----------- ENERGY TOTAL 20,316,300 FINANCIALS - 20.5% CAPITAL MARKETS - 3.9% Lehman Brothers Holdings, Inc. 87,775 6,442,685 Merrill Lynch & Co., Inc. 111,030 6,021,157 ----------- Capital Markets Total 12,463,842 COMMERCIAL BANKS - 2.4% Bank of America Corp. (b) 94,300 7,590,207 ----------- Commercial Banks Total 7,590,207 SHARES VALUE ($) ---------- ----------- DIVERSIFIED FINANCIAL SERVICES - 3.2% Citigroup, Inc. 215,155 10,346,804 ----------- Diversified Financial Services Total 10,346,804 INSURANCE - 8.5% American International Group, Inc. 121,854 8,730,839 Chubb Corp. 98,600 6,803,400 RenaissanceRe Holdings Ltd. 106,380 5,605,162 XL Capital Ltd., Class A 77,800 5,940,030 ----------- Insurance Total 27,079,431 THRIFTS & MORTGAGE FINANCE - 2.5% Fannie Mae 69,200 4,755,424 New York Community Bancorp, Inc. 127,333 3,192,238 ----------- Thrifts & Mortgage Finance Total 7,947,662 ----------- FINANCIALS TOTAL 65,427,946 HEALTH CARE - 18.7% BIOTECHNOLOGY - 1.7% Amgen, Inc. (a) 93,800 5,278,126 ----------- Biotechnology Total 5,278,126 HEALTH CARE EQUIPMENT & SUPPLIES - 7.2% Medtronic, Inc. 139,500 7,039,170 St. Jude Medical, Inc. (a) 107,500 8,197,950 Zimmer Holdings, Inc. (a) 96,500 7,705,525 ----------- Health Care Equipment & Supplies Total 22,942,645 HEALTH CARE PROVIDERS & SERVICES - 2.1% Express Scripts, Inc., Class A (a) 86,500 6,689,910 ----------- Health Care Providers & Services Total 6,689,910 PHARMACEUTICALS - 7.7% AstraZeneca PLC, ADR 130,000 6,220,500 Eli Lilly & Co. 81,000 5,978,610 Pfizer, Inc. 206,250 7,375,500 Teva Pharmaceutical Industries Ltd., ADR 80,000 4,924,800 ----------- Pharmaceuticals Total 24,499,410 ----------- HEALTH CARE TOTAL 59,410,091 INDUSTRIALS - 12.3% COMMERCIAL SERVICES & SUPPLIES - 1.9% Waste Management, Inc. 216,900 6,159,960 ----------- Commercial Services & Supplies Total 6,159,960 ELECTRICAL EQUIPMENT - 2.0% Emerson Electric Co. 106,300 6,401,386 ----------- Electrical Equipment Total 6,401,386 INDUSTRIAL CONGLOMERATES - 2.0% General Electric Co. 211,910 6,346,705 ----------- Industrial Conglomerates Total 6,346,705 See notes to investment portfolio. 17 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) INDUSTRIALS - (continued) MACHINERY - 6.4% Deere & Co. 87,000 5,919,480 Eaton Corp. 116,000 6,888,080 Illinois Tool Works, Inc. 87,000 7,500,270 ----------- Machinery Total 20,307,830 ----------- INDUSTRIALS TOTAL 39,215,881 INFORMATION TECHNOLOGY - 20.4% COMMUNICATIONS EQUIPMENT - 2.2% Cisco Systems, Inc. (a) 342,700 7,152,149 ----------- Communications Equipment Total 7,152,149 COMPUTERS & PERIPHERALS - 5.3% Dell, Inc. (a) 100,000 3,471,000 Hewlett-Packard Co. 215,000 4,235,500 Lexmark International, Inc. (a) 68,000 6,151,280 Network Appliance, Inc. (a) 165,000 3,072,300 ----------- Computers & Peripherals Total 16,930,080 IT SERVICES - 2.0% Affiliated Computer Services, Inc., Class A (a) 133,000 6,450,500 ----------- IT Services Total 6,450,500 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.1% Intel Corp. 240,000 6,175,200 National Semiconductor Corp. (a) 122,000 4,976,380 Texas Instruments, Inc. 216,975 5,446,072 Xilinx, Inc. (a) 83,000 2,791,290 ----------- Semiconductors & Semiconductor Equipment Total 19,388,942 SOFTWARE - 4.8% Electronic Arts, Inc. (a) 72,000 3,644,640 Microsoft Corp. 297,300 7,720,881 Symantec Corp. (a) 85,000 3,829,250 ----------- Software Total 15,194,771 ----------- INFORMATION TECHNOLOGY TOTAL 65,116,442 MATERIALS - 1.8% PAPER & FOREST PRODUCTS - 1.8% International Paper Co. 140,500 5,664,960 ----------- Paper & Forest Products Total 5,664,960 ----------- MATERIALS TOTAL 5,664,960 TOTAL COMMON STOCKS (Cost of $251,062,265) 312,034,698 PAR (S) VALUE ($) ---------- ----------- SHORT-TERM OBLIGATION - 2.0% Repurchase agreement with State Street Bank & Trust Co., dated 04/30/04, due 05/03/04 at 0.880%, collateralized by a U.S. Treasury Bond maturing 02/15/26, market value $6,656,741 (repurchase proceeds $6,521,478) (Cost of $6,521,000) 6,521,000 6,521,000 ----------- TOTAL INVESTMENTS - 100.0% (COST OF $257,583,265) (c) 318,555,698 OTHER ASSETS & LIABILITIES, NET - 0.0% (28,555) NET ASSETS - 100.0% 318,527,143 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Investments in affiliates during the six months ended April 30, 2004: Security Name: Bank of America Corp. (As a result of a merger effective April 1, 2004, Bank of America Corp. became the parent company of the Investment Advisor.) Shares as of 10/31/03: 86,300 Shares bought: 41,500 Shares sold: (33,500) Shares as of 04/30/04: 94,300 Net realized gain: $ 342,790 Dividend income earned: $ 117,280 Value at end of period: $7,590,207 (c) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See notes to financial statements. 18 INVESTMENT PORTFOLIO____________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund II SHARES VALUE ($) ---------- ----------- COMMON STOCKS - 98.8% CONSUMER DISCRETIONARY - 8.3% MEDIA - 4.5% Univision Communications, Inc., Class A (a) 28,530 965,740 Viacom, Inc., Class B 26,800 1,035,820 ----------- Media Total 2,001,560 MULTILINE RETAIL - 1.9% Kohl's Corp. (a) 20,400 852,516 ----------- Multiline Retail Total 852,516 SPECIALTY RETAIL - 1.9% Lowe's Companies, Inc. 16,600 864,196 ----------- Specialty Retail Total 864,196 ----------- CONSUMER DISCRETIONARY TOTAL 3,718,272 CONSUMER STAPLES - 9.8% FOOD & STAPLES RETAILING - 5.5% Walgreen Co. 28,500 982,680 Wal-Mart Stores, Inc. 26,170 1,491,690 ----------- Food & Staples Retailing Total 2,474,370 HOUSEHOLD PRODUCTS - 4.3% Colgate-Palmolive Co. 15,500 897,140 Procter & Gamble Co. 9,500 1,004,625 ----------- Household Products Total 1,901,765 ----------- CONSUMER STAPLES TOTAL 4,376,135 ENERGY - 6.5% ENERGY EQUIPMENT & SERVICES - 3.6% Nabors Industries Ltd. (a) 26,400 1,171,104 Noble Corp. (a) 12,500 464,500 ----------- Energy Equipment & Services Total 1,635,604 OIL & GAS - 2.9% Exxon Mobil Corp. 30,000 1,276,500 ----------- Oil & Gas Total 1,276,500 ----------- ENERGY TOTAL 2,912,104 FINANCIALS - 19.8% CAPITAL MARKETS - 4.0% Lehman Brothers Holdings, Inc. 12,425 911,995 Merrill Lynch & Co., Inc. 16,700 905,641 ----------- Capital Markets Total 1,817,636 COMMERCIAL BANKS - 1.8% Bank of America Corp. (b) 10,300 829,047 ----------- Commercial Banks Total 829,047 SHARES VALUE ($) ---------- ----------- DIVERSIFIED FINANCIAL SERVICES - 3.2% Citigroup, Inc. 29,595 1,423,224 ----------- Diversified Financial Services Total 1,423,224 INSURANCE - 8.4% American International Group, Inc. 17,463 1,251,224 Chubb Corp. 13,350 921,150 RenaissanceRe Holdings Ltd. 14,900 785,081 XL Capital Ltd., Class A 10,500 801,675 ----------- Insurance Total 3,759,130 THRIFTS & MORTGAGE FINANCE - 2.4% Fannie Mae 9,085 624,321 New York Community Bancorp, Inc. 17,766 445,394 ----------- Thrifts & Mortgage Finance Total 1,069,715 ----------- FINANCIALS TOTAL 8,898,752 HEALTH CARE - 19.1% BIOTECHNOLOGY - 1.8% Amgen, Inc. (a) 14,400 810,288 ----------- Biotechnology Total 810,288 HEALTH CARE EQUIPMENT & SUPPLIES - 7.3% Medtronic, Inc. 19,300 973,878 St. Jude Medical, Inc. (a) 15,100 1,151,526 Zimmer Holdings, Inc. (a) 14,400 1,149,840 ----------- Health Care Equipment & Supplies Total 3,275,244 HEALTH CARE PROVIDERS & SERVICES - 2.1% Express Scripts, Inc., Class A (a) 12,000 928,080 ----------- Health Care Providers & Services Total 928,080 PHARMACEUTICALS - 7.9% AstraZeneca PLC, ADR 18,500 885,225 Eli Lilly & Co. 12,500 922,625 Pfizer, Inc. 30,387 1,086,639 Teva Pharmaceutical Industries Ltd., ADR 11,000 677,160 ----------- Pharmaceuticals Total 3,571,649 ----------- HEALTH CARE TOTAL 8,585,261 INDUSTRIALS - 13.2% COMMERCIAL SERVICES & SUPPLIES - 2.3% Waste Management, Inc. 35,600 1,011,040 ----------- Commercial Services & Supplies Total 1,011,040 ELECTRICAL EQUIPMENT - 2.2% Emerson Electric Co. 16,700 1,005,674 ----------- Electrical Equipment Total 1,005,674 INDUSTRIAL CONGLOMERATES - 2.5% General Electric Co. 37,155 1,112,792 ----------- Industrial Conglomerates Total 1,112,792 See notes to investment portfolio. 19 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Growth Fund II SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) INDUSTRIALS - (continued) MACHINERY - 6.2% Deere & Co. 12,000 816,480 Eaton Corp. 16,000 950,080 Illinois Tool Works, Inc. 12,000 1,034,520 ----------- Machinery Total 2,801,080 ----------- INDUSTRIALS TOTAL 5,930,586 INFORMATION TECHNOLOGY - 20.3% COMMUNICATIONS EQUIPMENT - 2.2% Cisco Systems, Inc. (a) 47,395 989,134 ----------- Communications Equipment Total 989,134 COMPUTERS & PERIPHERALS - 5.2% Dell, Inc. (a) 14,000 485,940 Hewlett-Packard Co. 28,900 569,330 Lexmark International, Inc. (a) 9,300 841,278 Network Appliance, Inc. (a) 23,000 428,260 ----------- Computers & Peripherals Total 2,324,808 IT SERVICES - 1.8% Affiliated Computer Services, Inc., Class A (a) 17,200 834,200 ----------- IT Services Total 834,200 SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 6.2% Intel Corp. 33,200 854,236 National Semiconductor Corp. (a) 18,000 734,220 Texas Instruments, Inc. 29,350 736,685 Xilinx, Inc. (a) 13,700 460,731 ----------- Semiconductors & Semiconductor Equipment Total 2,785,872 SOFTWARE - 4.9% Electronic Arts, Inc. (a) 10,000 506,200 Microsoft Corp. 43,900 1,140,083 Symantec Corp. (a) 12,000 540,600 ----------- Software Total 2,186,883 ----------- INFORMATION TECHNOLOGY TOTAL 9,120,897 MATERIALS - 1.8% PAPER & FOREST PRODUCTS - 1.8% International Paper Co. 20,100 810,432 ----------- Paper & Forest Products Total 810,432 ----------- MATERIALS TOTAL 810,432 TOTAL COMMON STOCKS (Cost of $39,222,654) 44,352,439 PAR ($) VALUE ($) ---------- ----------- SHORT-TERM OBLIGATION - 1.6% Repurchase agreement with State Street Bank & Trust Co., dated 04/30/04, due 05/03/04 at 0.880%, collateralized by a U.S. Treasury Bond maturing 02/15/26, market value $714,781 (repurchase proceeds $700,051) (Cost of $700,000) 700,000 700,000 ----------- TOTAL INVESTMENTS - 100.4% (Cost of $39,922,654) (c) 45,052,439 OTHER ASSETS & LIABILITIES, NET - (0.4)% (170,587) NET ASSETS - 100.0% 44,881,852 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Investments in affiliates during the six months ended April 30, 2004: Security Name: Bank of America Corp. (As a result of a merger effective April 1, 2004, Bank of America Corp. became the parent company of the Investment Advisor.) Shares as of 10/31/03: 12,100 Shares bought: 2,800 Shares sold: (4,600) Shares as of 04/30/04: 10,300 Net realized gain: $ 47,462 Dividend income earned: $ 16,480 Value at end of period: $ 829,047 (c) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt See notes to financial statements. 20 INVESTMENT PORTFOLIO____________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - 98.4% CONSUMER DISCRETIONARY - 8.5% AUTOMOBILES - 0.9% General Motors Corp. 14,104 668,812 ----------- Automobiles Total 668,812 HOTELS, RESTAURANTS & LEISURE - 1.9% Harrah's Entertainment, Inc. 4,087 217,347 Wendy's International, Inc. 32,248 1,257,672 ----------- Hotels, Restaurants & Leisure Total 1,475,019 LEISURE EQUIPMENT & PRODUCTS - 0.4% Mattel, Inc. 19,682 333,807 ----------- Leisure Equipment & Products Total 333,807 MEDIA - 4.2% Clear Channel Communications, Inc. 15,359 637,245 Gannett Co., Inc. 4,735 410,430 McGraw-Hill Companies, Inc. 12,541 988,983 Time Warner, Inc. (a) 52,023 875,027 Viacom, Inc., Class A 9,288 363,718 ----------- Media Total 3,275,403 SPECIALTY RETAIL - 1.1% Office Depot, Inc. (a) 50,875 890,821 ----------- Specialty Retail Total 890,821 ----------- CONSUMER DISCRETIONARY TOTAL 6,643,862 CONSUMER STAPLES - 9.7% BEVERAGES - 1.9% PepsiCo, Inc. 26,977 1,469,977 ----------- Beverages Total 1,469,977 FOOD & STAPLES RETAILING - 0.6% Costco Wholesale Corp. 11,616 435,019 ----------- Food & Staples Retailing Total 435,019 FOOD PRODUCTS - 2.3% ConAgra Foods, Inc. 33,087 955,883 Kraft Foods, Inc., Class A 25,803 849,177 ----------- Food Products Total 1,805,060 HOUSEHOLD PRODUCTS - 3.8% Clorox Co. 17,447 903,406 Kimberly-Clark Corp. 15,607 1,021,478 Procter & Gamble Co. 10,073 1,065,220 ----------- Household Products Total 2,990,104 TOBACCO - 1.1% Altria Group, Inc. 16,066 889,735 ----------- Tobacco Total 889,735 ----------- CONSUMER STAPLES TOTAL 7,589,895 SHARES VALUE ($) ---------- ----------- ENERGY - 12.7% ENERGY EQUIPMENT & SERVICES - 2.1% Halliburton Co. 56,369 1,679,796 ----------- Energy Equipment & Services Total 1,679,796 OIL & GAS - 10.6% BP PLC, ADR 35,261 1,865,307 ConocoPhillips 26,651 1,900,216 Exxon Mobil Corp. 57,269 2,436,796 Marathon Oil Corp. 39,414 1,322,734 Royal Dutch Petroleum Co., N.Y. Registered Shares 16,754 815,250 ----------- Oil & Gas Total 8,340,303 ----------- ENERGY TOTAL 10,020,099 FINANCIALS - 32.1% CAPITAL MARKETS - 7.0% Bank of New York Co., Inc. 36,265 1,056,762 Goldman Sachs Group, Inc. 6,219 600,133 J.P. Morgan Chase & Co. 31,949 1,201,282 Merrill Lynch & Co., Inc. 21,237 1,151,683 Morgan Stanley 18,006 925,328 State Street Corp. 11,200 546,560 ----------- Capital Markets Total 5,481,748 COMMERCIAL BANKS - 7.1% Bank One Corp. 26,127 1,289,890 Fifth Third Bancorp 7,914 424,665 National City Corp. 16,847 584,085 U.S. Bancorp 61,273 1,571,040 Wells Fargo & Co. 31,214 1,762,342 ----------- Commercial Banks Total 5,632,022 CONSUMER FINANCE - 1.0% MBNA Corp. 31,859 776,722 ----------- Consumer Finance Total 776,722 DIVERSIFIED FINANCIAL SERVICES - 4.9% Citigroup, Inc. 80,619 3,876,968 ----------- Diversified Financial Services Total 3,876,968 INSURANCE - 9.0% AFLAC, Inc. 11,241 474,707 Ambac Financial Group, Inc. 11,861 818,409 American International Group, Inc. 24,226 1,735,793 Berkshire Hathaway, Inc., Class A (a) 4 373,560 Lincoln National Corp. 15,798 709,014 Marsh & McLennan Companies, Inc. 8,838 398,594 St. Paul Travelers Companies, Inc. 21,177 861,269 Willis Group Holdings Ltd. 22,694 824,019 XL Capital Ltd., Class A 11,470 875,734 ----------- Insurance Total 7,071,099 See notes to investment portfolio. 21 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) FINANCIALS - (continued) REAL ESTATE - 1.5% Archstone-Smith Trust, REIT 13,518 370,799 Kimco Realty Corp., REIT 9,678 413,638 Vornado Realty Trust, REIT 7,855 396,285 ----------- Real Estate Total 1,180,722 THRIFTS & MORTGAGE FINANCE - 1.6% Countrywide Financial Corp. 7,260 430,518 Freddie Mac 14,203 829,455 ----------- Thrifts & Mortgage Finance Total 1,259,973 ----------- FINANCIALS TOTAL 25,279,254 HEALTH CARE - 4.8% HEALTH CARE PROVIDERS & SERVICES - 2.1% Aetna, Inc. 19,897 1,646,477 ----------- Health Care Providers & Services Total 1,646,477 PHARMACEUTICALS - 2.7% Bristol-Myers Squibb Co. 14,003 351,475 Johnson & Johnson 7,424 401,119 Merck & Co., Inc. 8,883 417,501 Pfizer, Inc. 26,965 964,268 ----------- Pharmaceuticals Total 2,134,363 ----------- HEALTH CARE TOTAL 3,780,840 INDUSTRIALS - 10.6% AEROSPACE & DEFENSE - 4.4% General Dynamics Corp. 9,554 894,445 Honeywell International, Inc. 27,924 965,612 Raytheon Co. 20,279 654,201 United Technologies Corp. 11,018 950,413 ----------- Aerospace & Defense Total 3,464,671 COMMERCIAL SERVICES & SUPPLIES - 2.5% Avery Dennison Corp. 7,361 472,797 Waste Management, Inc. 52,819 1,500,060 ----------- Commercial Services & Supplies Total 1,972,857 INDUSTRIAL CONGLOMERATES - 1.4% Textron, Inc. 20,249 1,117,340 ----------- Industrial Conglomerates Total 1,117,340 MACHINERY - 2.3% Deere & Co. 13,643 928,270 Dover Corp. 22,145 886,464 ----------- Machinery Total 1,814,734 ----------- INDUSTRIALS TOTAL 8,369,602 SHARES VALUE ($) ---------- ----------- INFORMATION TECHNOLOGY - 6.1% COMMUNICATIONS EQUIPMENT - 1.0% Nokia Oyj, ADR 54,227 759,720 ----------- Communications Equipment Total 759,720 COMPUTERS & PERIPHERALS - 2.0% International Business Machines Corp. 8,673 764,698 Lexmark International, Inc., Class A (a) 9,394 849,781 ----------- Computers & Peripherals Total 1,614,479 IT SERVICES - 1.2% Accenture Ltd., Class A (a) 38,158 907,016 ----------- IT Services Total 907,016 OFFICE ELECTRONICS - 1.5% Xerox Corp. (a) 88,783 1,192,356 ----------- Office Electronics Total 1,192,356 SOFTWARE - 0.4% Microsoft Corp. 12,820 332,935 ----------- Software Total 332,935 ----------- INFORMATION TECHNOLOGY TOTAL 4,806,506 MATERIALS - 3.2% CHEMICALS - 1.4% Air Products & Chemicals, Inc. 22,943 1,142,791 ----------- Chemicals Total 1,142,791 PAPER & FOREST PRODUCTS - 1.8% MeadWestvaco Corp. 30,728 803,537 Weyerhaeuser Co. 9,934 588,093 ----------- Paper & Forest Products Total 1,391,630 ----------- MATERIALS TOTAL 2,534,421 TELECOMMUNICATION SERVICES - 5.0% DIVERSIFIED TELECOMMUNICATION SERVICES - 5.0% BellSouth Corp. 47,024 1,213,689 CenturyTel, Inc. 5,293 152,862 SBC Communications, Inc. 50,530 1,258,197 Verizon Communications, Inc. 35,139 1,326,146 ----------- Diversified Telecommunication Services Total 3,950,894 ----------- TELECOMMUNICATION SERVICES TOTAL 3,950,894 See notes to investment portfolio. 22 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Value Fund SHARES VALUE ($) ---------- ----------- COMMON STOCKS - (CONTINUED) UTILITIES - 5.7% ELECTRIC UTILITIES - 5.7% American Electric Power Co., Inc. 25,641 780,512 Consolidated Edison, Inc. 29,079 1,198,346 Entergy Corp. 11,531 629,593 Southern Co. 21,690 623,804 TXU Corp. 37,490 1,279,909 ----------- Electric Utilities Total 4,512,164 ----------- UTILITIES TOTAL 4,512,164 TOTAL COMMON STOCKS (Cost of $65,055,715) 77,487,537 INVESTMENT COMPANY - 1.1% iShares Russell 1000 Value Index Fund (Cost of $838,433) 14,357 836,008 ----------- PAR ($) VALUE ($) ---------- ----------- SHORT-TERM OBLIGATION - 0.7% Repurchase agreement with State Street Bank & Trust Co., dated 04/30/04, due 05/03/04 at 0.880%, collateralized by a U.S. Treasury Bond maturing 02/15/26, market value $572,916 (repurchase proceeds $560,041) (Cost of $560,000) 560,000 560,000 ----------- TOTAL INVESTMENTS - 100.2% (Cost of $66,454,148) (b) 78,883,545 OTHER ASSETS & LIABILITIES, NET - (0.2)% (175,554) NET ASSETS - 100.0% 78,707,991 NOTES TO INVESTMENT PORTFOLIO: (a) Non-income producing. (b) Cost for both financial statement and federal income tax purposes is the same. ACRONYM NAME ------- ---- ADR American Depositary Receipt REIT Real Estate Investment Trust See notes to financial statements. 23 STATEMENTS OF ASSETS AND LIABILITIES____________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED GROWTH GROWTH GROWTH VALUE FUND ($) FUND ($) FUND II ($) FUND ($) ------------------------------------------------------------------------------------------------------------------------------- ASSETS: Unaffiliated investments, at cost (including short-term obligation) 9,754,170 252,230,462 39,406,612 66,454,148 Affiliated investment, at cost -- 5,352,803 516,042 -- ----------- ----------- ----------- ----------- Unaffiliated investments, at value 11,513,632 310,965,491 44,223,392 78,883,545 Affiliated investment, at value -- 7,590,207 829,047 -- Cash 40,919 446 958 618 Receivable for: Investments sold 327,842 -- -- -- Fund shares sold 1,340 941,624 1,659 20,314 Dividends 1,761 215,100 29,738 174,567 Interest -- 160 17 14 Expense reimbursement due from Investment Advisor/Administrator 8,019 39 9,796 -- Deferred Trustees' compensation plan 1,319 15,791 2,737 4,416 Other assets -- 30,665 7,673 10,908 ----------- ----------- ----------- ----------- Total Assets 11,894,832 319,759,523 45,105,017 79,094,382 ------------------------------------------------------------------------------------------------------------------------------- LIABILITIES: Payable for: Investments purchased 115,516 -- -- -- Fund shares repurchased 44,587 552,830 113,480 202,380 Investment advisory fee 8,447 167,655 31,404 54,488 Administration fee 457 72,066 2,322 4,119 Transfer agent fee 12,427 187,485 27,030 46,465 Pricing and bookkeeping fees 831 14,140 409 4,082 Audit fee 12,509 12,905 12,509 14,918 Custody fee 501 -- 177 1,151 Legal fee 10,168 1,992 2,956 3,283 Registration fee 7,466 7,936 -- -- Distribution and service fees 7,883 199,580 30,141 51,089 Deferred Trustees' fees 1,319 15,791 2,737 4,416 Other liabilities 2,009 -- -- -- ----------- ----------- ----------- ----------- Total Liabilities 224,120 1,232,380 223,165 386,391 NET ASSETS 11,670,712 318,527,143 44,881,852 78,707,991 ------------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS: Paid-in capital 23,571,007 433,449,567 70,535,283 90,392,288 Undistributed net investment income (accumulated net investment loss) (120,551) (1,625,542) (252,979) 83,539 Accumulated net realized loss (13,539,206) (174,269,315) (30,530,237) (24,197,233) Net unrealized appreciation on investments 1,759,462 60,972,433 5,129,785 12,429,397 ----------- ----------- ----------- ----------- NET ASSETS 11,670,712 318,527,143 44,881,852 78,707,991
See notes to financial statements. 24 STATEMENTS OF ASSETS AND LIABILITIES____________________________________________ Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED GROWTH GROWTH GROWTH VALUE FUND ($) FUND ($) FUND II ($) FUND ($) ------------------------------------------------------------------------------------------------------------------------------- CLASS A: Net assets 2,763,338 68,935,414 7,044,508 15,762,645 Shares outstanding 359,210 5,037,354 810,217 1,442,083 Net asset value per share (a) 7.69 13.68 8.69 10.93 Maximum sales charge 5.75% 5.75% 5.75% 5.75% Maximum offering price per share (b) 8.16 14.51 9.22 11.60 ------------------------------------------------------------------------------------------------------------------------------- CLASS B: Net assets 7,341,155 201,694,902 30,345,050 49,984,815 Shares outstanding 980,963 15,580,181 3,603,035 4,693,570 Net asset value and offering price per share (a) 7.48 12.95 8.42 10.65 ------------------------------------------------------------------------------------------------------------------------------- CLASS C: Net assets 1,496,162 29,500,621 6,419,941 12,915,642 Shares outstanding 199,994 2,279,209 763,949 1,212,926 Net asset value and offering price per share (a) 7.48 12.94 8.40 10.65 ------------------------------------------------------------------------------------------------------------------------------- CLASS E: Net assets -- 7,226,841 -- -- Shares outstanding -- 531,175 -- -- Net asset value per share (a) -- 13.61 -- -- Maximum sales charge -- 4.50% -- -- Maximum offering price per share (b) -- 14.25 -- -- ------------------------------------------------------------------------------------------------------------------------------- CLASS F: Net assets -- 10,706,376 -- -- Shares outstanding -- 825,967 -- -- Net asset value and offering price per share (a) -- 12.96 -- -- ------------------------------------------------------------------------------------------------------------------------------- CLASS Z: Net assets 70,057 462,989 1,072,353 44,889 Shares outstanding 9,072 33,395 122,259 4,066 Net asset value, offering and redemption price per share 7.72 13.86 8.77 11.04
(a) Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (b) On sales of $50,000 or more the offering price is reduced. See notes to financial statements. 25 STATEMENTS OF OPERATIONS________________________________________________________ For the Six Months Ended April 30, 2004 (unaudited) Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA COLUMBIA COLUMBIA AGGRESSIVE TAX-MANAGED TAX-MANAGED TAX-MANAGED GROWTH GROWTH GROWTH VALUE FUND ($) FUND ($) FUND II ($) FUND ($) ------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividends 17,632 1,585,959 225,115 962,470 Dividends from affiliates -- 117,280 16,480 -- Interest 1,144 34,884 4,895 6,929 Foreign withholding tax (131) (7,800) (1,110) (9,152) ----------- ----------- ----------- ----------- Total Investment Income 18,645 1,730,323 245,380 960,247 ------------------------------------------------------------------------------------------------------------------------------- EXPENSES: Investment advisory fee 53,277 1,000,213 188,280 329,358 Administration fee 3,330 416,756 11,767 20,585 Service fee: Class A 4,031 89,005 9,524 21,173 Class B 10,504 266,411 39,819 64,578 Class C 2,028 38,244 8,246 17,122 Class E -- 9,044 -- -- Class F -- 13,470 -- -- Distribution fee: Class A 806 -- -- 4,235 Class B 31,512 799,232 119,458 193,735 Class C 6,083 114,733 24,738 51,366 Class E -- 3,617 -- -- Class F -- 40,410 -- -- Transfer agent fee 25,456 408,437 59,139 96,466 Pricing and bookkeeping fees 6,577 50,780 6,351 17,221 Trustees' fees 2,875 7,453 2,373 3,101 Custody fee 3,672 4,484 1,687 3,685 Audit fee 14,374 12,919 14,374 11,782 Registration fee 21,079 34,730 35,987 18,897 Non-recurring costs (See Note 8) 204 5,377 761 1,329 Other expenses 6,617 29,770 7,748 14,820 ----------- ----------- ----------- ----------- Total Expenses 192,425 3,345,085 530,252 869,453 Fees and expenses waived or reimbursed by Investment Advisor/Administrator (53,998) -- (33,518) -- Costs assumed by Investment Advisor (See Note 8) (204) (5,377) (761) (1,329) Custody earnings credit (13) (1) (1) (2) ----------- ----------- ----------- ----------- Net Expenses 138,210 3,339,707 495,972 868,122 ----------- ----------- ----------- ----------- NET INVESTMENT INCOME (LOSS) (119,565) (1,609,384) (250,592) 92,125 ------------------------------------------------------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on: Unaffiliated investments 971,287 15,957,765 1,807,336 2,809,339 Affiliated investment -- 342,829 47,467 -- Foreign currency transactions (753) -- -- -- Net realized loss on the disposal of investments in violation of restrictions (See Note 6) -- -- -- -- ----------- ----------- ----------- ----------- Net realized gain 970,534 16,300,594 1,854,803 2,809,339 Net change in unrealized appreciation/depreciation on investments (997,243) (355,514) 332,831 4,173,738 ----------- ----------- ----------- ----------- NET GAIN (LOSS) (26,709) 15,945,080 2,187,634 6,983,077 ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS (146,274) 14,335,696 1,937,042 7,075,202 ----------- ----------- ----------- -----------
See notes to financial statements. 26 STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND -------------------------- ------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($) 2004 ($) 2003 ($) ------------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment loss (119,565) (219,729) (1,609,384) (2,735,267) Net realized gain (loss) on investments and foreign currency transactions 970,534 39,575 16,300,594 (14,431,179) Net realized loss on the disposal of investments in violation of restrictions -- -- -- -- Net change in unrealized appreciation/depreciation on investments (997,243) 2,524,929 (355,514) 73,959,918 ----------- ----------- ----------- ----------- Net Increase (Decrease) from Operations (146,274) 2,344,775 14,335,696 56,793,472 ------------------------------------------------------------------------------------------------------------------------------- SHARE TRANSACTIONS: Class A: Subscriptions 405,061 2,125,101 6,921,933 6,638,498 Redemptions (1,470,988) (1,688,965) (10,975,605) (15,690,904) ----------- ----------- ----------- ----------- Net Increase (Decrease) (1,065,927) 436,136 (4,053,672) (9,052,406) ----------- ----------- ----------- ----------- Class B: Subscriptions 107,457 671,525 2,060,392 6,283,356 Redemptions (1,290,785) (1,759,818) (22,921,588) (46,212,326) ----------- ----------- ----------- ----------- Net Decrease (1,183,328) (1,088,293) (20,861,196) (39,928,970) ----------- ----------- ----------- ----------- Class C: Subscriptions 46,861 81,847 1,445,699 2,908,437 Redemptions (167,653) (418,954) (3,253,978) (8,956,641) ----------- ----------- ----------- ----------- Net Decrease (120,792) (337,107) (1,808,279) (6,048,204) ----------- ----------- ----------- ----------- Class E: Subscriptions -- -- 68,915 105,637 Redemptions -- -- (60,524) (150,292) ----------- ----------- ----------- ----------- Net Increase (Decrease) -- -- 8,391 (44,655) ----------- ----------- ----------- ----------- Class F: Subscriptions -- -- 172,637 197,836 Redemptions -- -- (162,420) (330,673) ----------- ----------- ----------- ----------- Net Increase (Decrease) -- -- 10,217 (132,837) ----------- ----------- ----------- ----------- Class Z: Subscriptions 54,248 11,910 2,300 482,349 Redemptions (133) -- (1,735) (154,915) ----------- ----------- ----------- ----------- Net Increase 54,115 11,910 565 327,434 ----------- ----------- ----------- ----------- Net Decrease from Share Transactions (2,315,932) (977,354) (26,703,974) (54,879,638) ----------- ----------- ----------- ----------- Total Increase (Decrease) in Net Assets (2,462,206) 1,367,421 (12,368,278) 1,913,834 ----------- ----------- ----------- ----------- ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 14,132,918 12,765,497 330,895,421 328,981,587 ----------- ----------- ----------- ----------- End of period 11,670,712 14,132,918 318,527,143 330,895,421 ----------- ----------- ----------- ----------- Accumulated net investment loss (120,551) (986) (1,625,542) (16,158) ----------- ----------- ----------- -----------
See notes to financial statements. 27 STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED GROWTH FUND II VALUE FUND -------------------------- ------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 ($) 2003 ($) 2004 ($) 2003 ($) ------------------------------------------------------------------------------------------------------------------------------- OPERATIONS: Net investment income (loss) (250,592) (417,616) 92,125 144,918 Net realized gain (loss) on investments 1,854,803 (2,632,362) 2,809,339 (11,323,355) Net realized loss on the disposal of investments in violation of restrictions -- -- -- -- Net change in unrealized appreciation/depreciation on investments 332,831 10,813,804 4,173,738 21,142,163 ----------- ----------- ----------- ----------- Net Increase from Operations 1,937,042 7,763,826 7,075,202 9,963,726 ------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income: Class A -- -- (137,968) -- Class B -- -- (9,525) -- Class C -- -- (2,579) -- Class Z -- -- (379) -- ----------- ----------- ----------- ----------- Total Distributions Declared to Shareholders -- -- (150,451) -- ------------------------------------------------------------------------------------------------------------------------------- SHARE TRANSACTIONS: Class A: Subscriptions 531,579 1,444,961 804,771 3,592,454 Distributions reinvested -- -- 118,332 -- Redemptions (1,341,948) (2,899,754) (3,278,682) (8,719,434) ----------- ----------- ----------- ----------- Net Decrease (810,369) (1,454,793) (2,355,579) (5,126,980) ----------- ----------- ----------- ----------- Class B: Subscriptions 771,196 1,882,364 1,169,818 3,240,450 Distributions reinvested -- -- 8,561 -- Redemptions (3,287,533) (6,472,623) (5,661,572) (11,898,465) ----------- ----------- ----------- ----------- Net Decrease (2,516,337) (4,590,259) (4,483,193) (8,658,015) ----------- ----------- ----------- ----------- Class C: Subscriptions 467,645 713,546 586,850 1,542,556 Distributions reinvested -- -- 2,136 -- Redemptions (750,236) (1,816,426) (2,524,230) (7,135,678) ----------- ----------- ----------- ----------- Net Decrease (282,591) (1,102,880) (1,935,244) (5,593,122) ----------- ----------- ----------- ----------- Class Z: Subscriptions 210,600 41,354 10,000 28,960 Distributions reinvested -- -- 379 -- Redemptions (2,998) (248,762) -- -- ----------- ----------- ----------- ----------- Net Increase (Decrease) 207,602 (207,408) 10,379 28,960 ----------- ----------- ----------- ----------- Net Decrease from Share Transactions (3,401,695) (7,355,340) (8,763,637) (19,349,157) ----------- ----------- ----------- ----------- Total Increase (Decrease) in Net Assets (1,464,653) 408,486 (1,838,886) (9,385,431) ------------------------------------------------------------------------------------------------------------------------------- NET ASSETS: Beginning of period 46,346,505 45,938,019 80,546,877 89,932,308 ----------- ----------- ----------- ----------- End of period 44,881,852 46,346,505 78,707,991 80,546,877 ----------- ----------- ----------- ----------- Undistributed net investment income (accumulated net investment loss (252,979) (2,387) 83,539 141,865 ----------- ----------- ----------- -----------
See notes to financial statements. 28 STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED AGGRESSIVE GROWTH FUND GROWTH FUND -------------------------- ------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 2003 2004 2003 ------------------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 50,981 306,687 502,282 560,514 Redemptions (182,873) (254,160) (794,712) (1,375,186) ----------- ----------- ----------- ----------- Net Increase (Decrease) (131,892) 52,527 (292,430) (814,672) ----------- ----------- ----------- ----------- Class B: Subscriptions 13,709 105,120 158,219 587,037 Redemptions (164,040) (274,407) (1,755,744) (4,268,593) ----------- ----------- ----------- ----------- Net Decrease (150,331) (169,287) (1,597,525) (3,681,556) ----------- ----------- ----------- ----------- Class C: Subscriptions 5,824 12,186 111,408 270,413 Redemptions (21,388) (64,957) (249,432) (820,762) ----------- ----------- ----------- ----------- Net Decrease (15,564) (52,771) (138,024) (550,349) ----------- ----------- ----------- ----------- Class E: Subscriptions -- -- 5,013 8,644 Redemptions -- -- (4,455) (13,658) ----------- ----------- ----------- ----------- Net Increase (Decrease) -- -- 558 (5,014) ----------- ----------- ----------- ----------- Class F: Subscriptions -- -- 13,372 17,598 Redemptions -- -- (12,350) (29,586) ----------- ----------- ----------- ----------- Net Increase (Decrease) -- -- 1,022 (11,988) ----------- ----------- ----------- ----------- Class Z: Subscriptions 6,763 1,861 174 40,880 Redemptions (16) -- (121) (14,872) ----------- ----------- ----------- ----------- Net Increase 6,747 1,861 53 26,008 ----------- ----------- ----------- -----------
See notes to financial statements. 29 STATEMENTS OF CHANGES IN NET ASSETS_____________________________________________ Columbia Tax-Managed Funds
COLUMBIA TAX-MANAGED COLUMBIA TAX-MANAGED GROWTH FUND II VALUE FUND -------------------------- ------------------------- (UNAUDITED) (UNAUDITED) SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, INCREASE (DECREASE) IN NET ASSETS: 2004 2003 2004 2003 ------------------------------------------------------------------------------------------------------------------------------- CHANGES IN SHARES: Class A: Subscriptions 60,124 201,123 73,703 393,479 Issued for distributions reinvested -- -- 11,164 -- Redemptions (152,230) (407,311) (298,845) (961,953) ----------- ----------- ----------- ----------- Net Decrease (92,106) (206,188) (213,978) (568,474) ----------- ----------- ----------- ----------- Class B: Subscriptions 91,219 266,693 112,100 359,993 Issued for distributions reinvested -- -- 827 -- Redemptions (385,730) (911,307) (534,920) (1,316,603) ----------- ----------- ----------- ----------- Net Decrease (294,511) (644,614) (421,993) (956,610) ----------- ----------- ----------- ----------- Class C: Subscriptions 55,156 100,076 55,308 169,090 Issued for distributions reinvested -- -- 206 -- Redemptions (88,825) (258,061) (238,483) (785,239) ----------- ----------- ----------- ----------- Net Decrease (33,669) (157,985) (182,969) (616,149) ----------- ----------- ----------- ----------- Class Z: Subscriptions 23,563 5,807 920 3,007 Issued for distributions reinvested -- -- 35 -- Redemptions (332) (34,998) -- -- ----------- ----------- ----------- ----------- Net Increase (Decrease) 23,231 (29,191) 955 3,007 ----------- ----------- ----------- -----------
See notes to financial statements. 30 NOTES TO FINANCIAL STATEMENTS___________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds NOTE 1. ORGANIZATION Columbia Funds Trust I (the "Trust") is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Information presented in these financial statements pertains to the following diversified portfolios (individually referred to as a "Fund", collectively referred to as the "Funds"): Columbia Tax-Managed Aggressive Growth Fund Columbia Tax-Managed Growth Fund Columbia Tax-Managed Growth Fund II Columbia Tax-Managed Value Fund INVESTMENT GOALS Each Fund seeks long-term capital growth while reducing shareholder exposure to taxes. Columbia Tax-Managed Aggressive Growth Fund invests primarily in common stocks of small capitalization and middle capitalization companies that the Fund's investment advisor believes have long-term growth potential. Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia Tax-Managed Value Fund invest primarily in large capitalization and middle capitalization stocks. FUND SHARES The Funds may issue an unlimited number of shares. Columbia Tax-Managed Aggressive Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia Tax-Managed Value Fund each offer four classes of shares: Class A, Class B, Class C and Class Z. Columbia Tax-Managed Growth Fund offers six classes of shares: Class A, Class B, Class C, Class E, Class F and Class Z. Each share class has its own sales charge and expense structure. Class A shares are subject to a maximum front-end sales charge of 5.75% based on the amount of initial investment. Class A shares purchased without an initial sales charge are subject to a 1.00% contingent deferred sales charge ("CDSC") on shares sold within eighteen months on an original purchase of $1 million to $25 million. Class B shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class B shares will convert to Class A shares in a certain number of years after purchase, depending on the program under which shares were purchased. Class C shares are subject to a 1.00% CDSC on shares sold within one year after purchase. Class E and Class F shares are trust shares. Such shares are held in an irrevocable trust on behalf of the shareholder until a trust termination date, as specified by the shareholder. At such time, the shares pass to the shareholder's beneficiary. Class E shares are subject to a maximum front-end sales charge of 4.50% based on the amount of initial investment. Class E shares purchased without an initial sales charge are subject to a 1.00% CDSC on shares sold within eighteen months on an original purchase of $500,000 to $5 million. Class F shares are subject to a maximum CDSC of 5.00% based upon the holding period after purchase. Class F shares will convert into Class E shares after eight years. Class Z shares are offered continuously at net asset value. There are certain restrictions on the purchase of Class Z shares, as described in each Fund's prospectus. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. SECURITY VALUATION Equity securities and exchange traded funds are valued at the last sale price on the principal exchange on which they trade, except for securities traded on the NASDAQ, which are valued at the NASDAQ official close price. Unlisted securities or listed securities for which there were no sales during the day are valued at the closing bid price on such exchanges or over-the-counter markets. Short-term debt obligations maturing within 60 days are valued at amortized cost, which approximates market value. Investments for which market quotations are not readily available, or quotations which management 31 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds believes are not appropriate, are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. SECURITY TRANSACTIONS Security transactions are accounted for on the trade date. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. REPURCHASE AGREEMENTS Each Fund may engage in repurchase agreement transactions with institutions that the Funds' investment advisor has determined are creditworthy. Each Fund, through its custodian, receives delivery of underlying securities collateralizing a repurchase agreement. Collateral is at least equal, at all times, to the value of the repurchase obligation including interest. A repurchase agreement transaction involves certain risks in the event of default or insolvency of the counterparty. These risks include possible delays or restrictions upon each Fund's ability to dispose of the underlying securities and a possible decline in the value of the underlying securities during the period while the Funds seek to assert their rights. FOREIGN CURRENCY TRANSACTIONS The values of all assets and liabilities quoted in foreign currencies are translated into U.S. dollars at that day's exchange rates. Net realized and unrealized gains (losses) on foreign currency transactions include gains (losses) arising from the fluctuation in exchange rates between trade and settlement dates on securities transactions, gains (losses) arising from the disposition of foreign currency and currency gains (losses) between the accrual and payment dates on dividends, interest income and foreign withholding taxes. For financial statement purposes, the Funds do not distinguish that portion of gains (losses) on investments which is due to changes in foreign exchange rates from that which is due to changes in market prices of the investments. Such fluctuations are included with the net realized and unrealized gains (losses) on investments. INCOME RECOGNITION Interest income is recorded on the accrual basis. Corporate actions and dividend income are recorded on the ex-date. DETERMINATION OF CLASS NET ASSET VALUES All income, expenses (other than class-specific expenses, as shown on the Statements of Operations), and realized and unrealized gains (losses), are allocated to each class of the Funds on a daily basis, based on the relative net assets of each class, for purposes of determining the net asset value of each class. FEDERAL INCOME TAX STATUS Each Fund intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended, and will distribute substantially all of its taxable income, if any, for its tax year, and as such will not be subject to federal income taxes. In addition, by distributing in each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, each Fund will not be subject to federal excise tax. Therefore, no federal income or excise tax provision is recorded. DISTRIBUTIONS TO SHAREHOLDERS The Funds are managed using investment strategies that are designed to reduce (but not eliminate) the Funds' payment of taxable distributions to shareholders. From time to time, the Funds expect to distribute taxable income and capital gains. Distributions to shareholders are recorded on ex-date. Net realized capital gains, if any, are distributed at least annually. NOTE 3. FEDERAL TAX INFORMATION Unrealized appreciation and depreciation at April 30, 2004, based on cost of investments for federal income tax purposes, was: UNREALIZED UNREALIZED NET UNREALIZED APPRECIATION DEPRECIATION APPRECIATION ------------ ------------ -------------- Columbia Tax-Managed Aggressive Growth Fund $ 2,151,361 $ (391,899) $ 1,759,462 Columbia Tax-Managed Growth Fund 67,159,802 (6,187,369) 60,972,433 Columbia Tax-Managed Growth Fund II 7,216,903 (2,087,118) 5,129,785 Columbia Tax-Managed Value Fund 13,520,348 (1,090,951) 12,429,397 The following capital loss carryforwards, determined as of October 31, 2003, 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: 32 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds COLUMBIA COLUMBIA COLUMBIA TAX-MANAGED TAX-MANAGED TAX-MANAGED COLUMBIA AGGRESSIVE GROWTH GROWTH TAX-MANAGED EXPIRING IN: GROWTH FUND FUND FUND II VALUE FUND ----------- ------------ ------------- ------------ ------------ 2005 $ -- $ 559,490 $ -- $ -- 2006 -- 9,583,819 -- -- 2007 -- 1,695,876 -- -- 2008 599,602 16,678,334 1,602,453 96,769 2009 11,034,417 90,676,212 18,063,082 -- 2010 2,819,769 55,723,137 9,577,005 15,493,033 2011 -- 12,700,626 2,648,834 11,272,748 ---------------------------------------------------------------------------- Total $ 14,453,788 $ 187,617,494 $ 31,891,374 $ 26,862,550 Capital loss carryforwards of $49,141 were utilized and/or expired during the year ended October 31, 2003 for the Columbia Tax-Managed Aggressive Growth Fund. For the Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia Tax-Managed Value Fund, no capital loss carryforwards were utilized and/or expired for the year ended October 31, 2003. Expired capital loss carryforwards are recorded as a reduction of paid-in capital. NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES Columbia Management Advisors, Inc. ("Columbia") is the investment advisor to the Funds. Prior to April 1, 2004, Columbia was an indirect, wholly owned subsidiary of FleetBoston Financial Corporation ("FleetBoston"). On April 1, 2004, FleetBoston, including the Funds' investment advisor and distributor, was acquired by Bank of America Corporation ("BOA"). The merger did not change the way the Funds are managed, the investment personnel assigned to manage the Funds or the fees paid by the Funds. INVESTMENT ADVISORY FEE Columbia receives a monthly investment advisory fee based on each Fund's average daily net assets at the following annual rates: FEES ON FEES ON FEES ON AVERAGE DAILY AVERAGE DAILY AVERAGE DAILY NET ASSETS NET ASSETS NET ASSETS FIRST NEXT OVER $500 MILLION $500 MILLION $1 BILLION ------------- ------------- ------------- Columbia Tax-Managed Aggressive Growth Fund 0.80% 0.75% 0.70% Columbia Tax-Managed Growth Fund 0.60% 0.55% 0.50% Columbia Tax-Managed Growth Fund II 0.80% 0.75% 0.70% Columbia Tax-Managed Value Fund 0.80% 0.75% 0.70% SUB-ADVISORY FEE Stein Roe Investment Counsel ("SRIC") has been retained by Columbia as sub-advisor to Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II. As sub-advisor, SRIC is responsible for the daily investment operations of the two funds. Columbia, out of the investment advisory fee it receives, pays SRIC a monthly sub-advisory fee equal to a base rate of 0.20% annually of the average daily net assets for each of the two funds. This base fee of 0.20% can be adjusted quarterly to an annual rate as high as 0.25% or to an annual rate as low as 0.15% depending on the investment performance, as determined by Morningstar, Inc.'s Large Blend category, of each Fund over a specified period of time. In addition, Columbia's contract with SRIC provides that SRIC shall not receive a fee less than $350,000 per annum in the aggregate for managing both Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II. ADMINISTRATION FEE Columbia provides administrative and other services to the Funds for a monthly administration fee based on each Fund's average daily net assets at the following annual rates: Columbia Tax-Managed Aggressive Growth Fund 0.05% Columbia Tax-Managed Growth Fund 0.25% Columbia Tax-Managed Growth Fund II 0.05% Columbia Tax-Managed Value Fund 0.05% PRICING AND BOOKKEEPING FEES Columbia is responsible for providing pricing and bookkeeping services to the Funds under a pricing and bookkeeping agreement. Under a separate agreement (the "Outsourcing Agreement"), Columbia has delegated those functions to State Street Corporation ("State Street"). Columbia pays the total fees collected to State Street under the Outsourcing Agreement. Under its pricing and bookkeeping agreement with the Funds, Columbia receives from each Fund an annual flat fee of $10,000 paid monthly, and in any month that a Fund's average daily net assets exceed $50 million, an additional monthly fee. The additional fee rate is calculated by taking into account the fees payable to State Street under the Outsourcing Agreement. This rate is applied to the average daily net assets of the Fund for that month. Each Fund also pays additional 33 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds fees for pricing services. For the six months ended April 30, 2004, the annualized effective pricing and bookkeeping fee rates for the Funds were as follows: Columbia Tax-Managed Aggressive Growth Fund 0.099% Columbia Tax-Managed Growth Fund 0.030% Columbia Tax-Managed Growth Fund II 0.027% Columbia Tax-Managed Value Fund 0.042% TRANSFER AGENT FEE Columbia Funds Services, Inc. (the "Transfer Agent"), an indirect, wholly owned subsidiary of BOA, provides shareholder services to the Funds. For such services, the Transfer Agent receives a fee, paid monthly, at the annual rate of $28.00 per open account. The Transfer Agent also receives reimbursement for certain out-of-pocket expenses. For the six months ended April 30, 2004, the Funds' annualized effective transfer agent fee rates, inclusive of out-of-pocket fees, were as follows: Columbia Tax-Managed Aggressive Growth Fund 0.38% Columbia Tax-Managed Growth Fund 0.25% Columbia Tax-Managed Growth Fund II 0.25% Columbia Tax-Managed Value Fund 0.23% UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES Columbia Funds Distributor, Inc. (the "Distributor"), an indirect, wholly owned subsidiary of BOA, is the principal underwriter of the Funds. For the six months ended April 30, 2004, the Distributor has retained net underwriting discounts and CDSC fees as follows: FRONT-END SALES CHARGE ------------------ CLASS A CLASS E ------- ------- Columbia Tax-Managed Aggressive Growth Fund $ 834 $ -- Columbia Tax-Managed Growth Fund 7,943 -- Columbia Tax-Managed Growth Fund II 2,627 -- Columbia Tax-Managed Value Fund 1,711 -- CDSC ------------------------------------------ CLASS A CLASS B CLASS C CLASS F ------- -------- ------- -------- Columbia Tax-Managed Aggressive Growth Fund $ 50 $ 19,146 $ 27 $ -- Columbia Tax-Managed Growth Fund -- 304,958 373 -- Columbia Tax-Managed Growth Fund II -- 66,723 108 -- Columbia Tax-Managed Value Fund -- 79,991 1,100 -- The Funds have adopted a 12b-1 plan (the "Plan") which requires the payment of a monthly service and distribution fee to the Distributor based on the average daily net assets of each Fund at the following annual rates: DISTRIBUTION FEES: CLASS A CLASS B CLASS C CLASS E CLASS F ------------------------- ------- ------- ------- ------- ------- Columbia Tax-Managed Aggressive Growth Fund 0.05% 0.75% 0.75% N/A N/A Columbia Tax-Managed Growth Fund N/A 0.75% 0.75% 0.10% 0.75% Columbia Tax-Managed Growth Fund II N/A 0.75% 0.75% N/A N/A Columbia Tax-Managed Value Fund 0.05% 0.75% 0.75% N/A N/A SERVICE FEES: CLASS A CLASS B CLASS C CLASS E CLASS F ------------------------- ------- ------- ------- ------- ------- Columbia Tax-Managed Aggressive Growth Fund 0.25% 0.25% 0.25% N/A N/A Columbia Tax-Managed Growth Fund 0.25% 0.25% 0.25% 0.25% 0.25% Columbia Tax-Managed Growth Fund II 0.25% 0.25% 0.25% N/A N/A Columbia Tax-Managed Value Fund 0.25% 0.25% 0.25% N/A N/A The CDSC and the fees received from the Plan are used principally as repayment to the Distributor for amounts paid by the Distributor to dealers who sold such shares. FEE WAIVERS Columbia has voluntarily agreed to waive fees and reimburse the Funds for certain expenses so that total expenses (exclusive of service fees, distribution fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) would not exceed certain expense limitations. Columbia, at its discretion, may revise or discontinue this arrangement any time. For the six months ended April 30, 2004, total expenses 34 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds were limited to the following percentages annually of the Funds' average daily net assets: AVERAGE DAILY AVERAGE DAILY NET ASSETS NET ASSETS FIRST OVER $100 MILLION $100 MILLION ------------- ------------- Columbia Tax-Managed Aggressive Growth Fund 1.25% 1.25% Columbia Tax-Managed Growth Fund II 1.25% 1.50% CUSTODY CREDITS Each Fund has an agreement with its custodian bank under which custody fees may be reduced by balance credits. 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. FEES PAID TO OFFICERS AND TRUSTEES The Funds pay no compensation to their officers, all of whom are employees of Columbia or its affiliates. The Funds' Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Funds' assets. OTHER Columbia provides certain services to the Funds related to Sarbanes-Oxley compliance. For the six months ended April 30, 2004, the Columbia Tax-Managed Aggressive Growth Fund, Columbia Tax-Managed Growth Fund, Columbia Tax-Managed Growth Fund II and Columbia Tax-Managed Value Fund paid $654, $904, $680 and $708, respectively, to Columbia for such services. These amounts are included in "Other expenses" on the Statements of Operations. NOTE 5. PORTFOLIO INFORMATION For the six months ended April 30, 2004, the cost of purchases and proceeds from sales of securities, excluding short-term obligations, were as follows: PURCHASES SALES ------------- ------------ Columbia Tax-Managed Aggressive Growth Fund $ 6,282,278 $ 8,413,112 Columbia Tax-Managed Growth Fund 67,277,381 91,664,008 Columbia Tax-Managed Growth Fund II 9,318,250 12,179,325 Columbia Tax-Managed Value Fund 16,869,378 22,979,190 NOTE 6. OTHER During the six months ended April 30, 2004, Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II purchased shares of Bank of America Corp. in violation of investment restrictions. The shares that caused the violation were sold at a loss of $39 and $5 for Columbia Tax-Managed Growth Fund and Columbia Tax-Managed Growth Fund II, respectively, and SRIC is in the process of reimbursing the Funds. NOTE 7. LINE OF CREDIT The Funds and other affiliated funds participate in a $350,000,000 credit facility, which is used for temporary or emergency purposes to facilitate portfolio liquidity. Interest is charged to each Fund based on its borrowings. In addition, each Fund has agreed to pay commitment fees on its pro-rata portion of the unutilized line of credit. The commitment fee is included in "Other expenses" on the Statements of Operations. For the six months ended April 30, 2004, the Funds did not borrow under this arrangement. NOTE 8. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES INDUSTRY FOCUS The Funds may focus their investments in certain industries, subjecting them to greater risk than a fund that is more diversified. LEGAL PROCEEDINGS Columbia, the Distributor, and certain of their affiliates (collectively, "The Columbia Group") have received information requests and subpoenas from various regulatory and law enforcement authorities in connection with their investigations of late trading and market timing in mutual funds. The Columbia Group has not uncovered any instances where 35 ________________________________________________________________________________ April 30, 2004 (unaudited) Columbia Tax-Managed Funds Columbia or the Distributor were knowingly involved in late trading of mutual fund shares. On February 24, 2004, the Securities and Exchange Commission ("SEC") filed a civil complaint in the United States District Court for the District of Massachusetts against Columbia and the Distributor, alleging that they had violated certain provisions of the federal securities laws in connection with trading activity in mutual fund shares. Also on February 24, 2004, the New York Attorney General ("NYAG") filed a civil complaint in New York Supreme Court, County of New York against Columbia and the Distributor alleging that Columbia and the Distributor had violated certain New York anti-fraud statutes. If either Columbia or the Distributor is unsuccessful in its defense of these proceedings, it could be barred from serving as an investment advisor or distributor for any investment company registered under the Investment Company Act of 1940, as amended (a "registered investment company"). Such results could prevent Columbia, the Distributor or any company that is an affiliated person of Columbia and the Distributor from serving as an investment advisor or distributor for any registered investment company, including your fund. Your fund has been informed by Columbia and the Distributor that, if these results occur, they will seek exemptive relief from the SEC to permit them to continue to serve as your fund's investment advisor and distributor. There is no assurance that such exemptive relief will be granted. On March 15, 2004, Columbia and the Distributor entered into agreements in principle with the SEC Division of Enforcement and NYAG in settlement of the charges. Under the agreements, Columbia and the Distributor agreed, among other things, to the following conditions: payment of $70 million in disgorgement; payment of $70 million in civil penalties; an order requiring Columbia and the Distributor to cease and desist from violations of the antifraud provisions and other provisions of the federal securities laws; governance changes designed to maintain the independence of the mutual fund boards of trustees and ensure compliance with securities laws and their fiduciary duties; and retention of an independent consultant to review Columbia's and the Distributor's compliance policies and procedures. The agreement requires the final approval of the SEC. In a separate agreement with the NYAG, the Columbia Group has agreed to reduce mutual fund fees by $80 million over a five-year period. 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 FleetBoston (and affiliated entities). These suits and certain regulatory investigations are ongoing. Accordingly, an estimate of the financial impact of this litigation on any fund, if any, cannot currently be made. For the six months ended April 30, 2004, Columbia has assumed legal, consulting services and Trustees' fees incurred by the Funds in connection with these matters as follows: Columbia Tax-Managed Aggressive Growth Fund $ 204 Columbia Tax-Managed Growth Fund 5,377 Columbia Tax-Managed Growth Fund II 761 Columbia Tax-Managed Value Fund 1,329 36 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Aggressive Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS A SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 7.82 $ 6.44 $ 7.01 $ 12.36 $ 11.59 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.05) (0.08) (0.09) (0.09) (0.04) Net realized and unrealized gain (loss) on investments and foreign currency (0.08) 1.46 (0.48) (5.26) 0.81 ----------- --------- --------- --------- --------- Total from investment operations (0.13) 1.38 (0.57) (5.35) 0.77 -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 7.69 $ 7.82 $ 6.44 $ 7.01 $ 12.36 Total return (c)(d) (1.66)%(e) 21.43% (8.13)% (43.28)% 6.64%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.55%(g) 1.55% 1.55% 1.55% 1.55%(g) Net investment loss (f) (1.26)%(g) (1.25)% (1.27)% (1.05)% (1.19)%(g) Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 2,763 $ 3,838 $ 2,825 $ 4,043 $ 5,227 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS B SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 $ 11.59 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.13) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments and foreign currency (0.07) 1.43 (0.48) (5.24) 0.81 ----------- --------- --------- --------- --------- Total from investment operations (0.15) 1.30 (0.62) (5.39) 0.75 -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 7.48 $ 7.63 $ 6.33 $ 6.95 $ 12.34 Total return (c)(d) (1.97)%(e) 20.54% (8.92)% (43.68)% 6.47%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.97)%(g) (1.95)% (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 7,341 $ 8,632 $ 8,238 $ 10,979 $ 18,080 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 37 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Aggressive Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS C SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 7.63 $ 6.33 $ 6.95 $ 12.34 $ 11.59 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.08) (0.13) (0.14) (0.15) (0.06) Net realized and unrealized gain (loss) on investments and foreign currency (0.07) 1.43 (0.48) (5.24) 0.81 ----------- --------- --------- --------- --------- Total from investment operations (0.15) 1.30 (0.62) (5.39) 0.75 -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 7.48 $ 7.63 $ 6.33 $ 6.95 $ 12.34 Total return (c)(d) (1.97)%(e) 20.54% (8.92)% (43.68)% 6.47%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.97)%(g) (1.95)% (1.97)% (1.75)% (1.89)%(g) Waiver/reimbursement 0.81%(g) 1.02% 0.69% 0.85% 1.82%(g) Portfolio turnover rate 48%(e) 116% 121% 188% 47%(e) Net assets, end of period (000's) $ 1,496 $ 1,644 $ 1,699 $ 2,508 $ 1,567 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS Z SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 7.83 $ 6.43 $ 7.03 $ 12.37 $ 11.59 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.04) (0.07) (0.07) (0.07) (0.03) Net realized and unrealized gain (loss) on investments and foreign currency (0.07) 1.47 (0.53) (5.27) 0.81 ----------- --------- --------- --------- --------- Total from investment operations (0.11) 1.40 (0.60) (5.34) 0.78 -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 7.72 $ 7.83 $ 6.43 $ 7.03 $ 12.37 Total return (c) (1.40)%(d) 21.77% (8.53)% (43.17)% 6.73%(d) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.25%(f) 1.25% 1.25% 1.25% 1.25%(f) Net investment loss (e) (1.00)%(f) (0.95)% (0.97)% (0.75)% (0.89)%(f) Waiver/reimbursement 0.81%(f) 1.02% 0.69% 0.85% 1.82%(f) Portfolio turnover rate 48%(d) 116% 121% 188% 47%(d) Net assets, end of period (000's) $ 70 $ 18 $ 3 $ 61 $ 128 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on July 24, 2000. The activity shown is from the effective date of registration (August 1, 2000) with the Securities and Exchange Commission. (b) Per share data was calculated using average shares outstanding during the period. (c) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 38 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS A SHARES 2004 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19 $ 13.39 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.03) (0.03) (0.02) (0.06) (0.12) (0.03) Net realized and unrealized gain (loss) on investments 0.62 2.25 (1.79) (5.64) 1.31 3.83 ----------- --------- --------- --------- --------- --------- Total from investment operations 0.59 2.22 (1.81) (5.70) 1.19 3.80 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.68 $ 13.09 $ 10.87 $ 12.68 $ 18.38 $ 17.19 Total return (b) 4.51%(c) 20.42% (14.27)% (31.01)% 6.92% 28.38% ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (d) 1.43%(e) 1.42% 1.41% 1.39% 1.44% 1.64% Net investment loss (d) (0.39)%(e) (0.28)% (0.18)% (0.38)% (0.67)% (0.21)% Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 68,935 $ 69,764 $ 66,760 $ 102,403 $ 163,502 $ 97,531 -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS B SHARES 2004 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82 $ 13.20 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 0.59 2.15 (1.72) (5.46) 1.29 3.77 ----------- ---------- --------- --------- --------- --------- Total from investment operations 0.52 2.04 (1.83) (5.63) 1.03 3.62 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.95 $ 12.43 $ 10.39 $ 12.22 $ 17.85 $ 16.82 Total return (b) 4.18%(c) 19.63% (14.98)% (31.54)% 6.12% 27.42% ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (d) 2.18%(e) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (d) (1.14)%(e) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 201,695 $ 213,481 $ 216,801 $ 327,645 $ 532,082 $ 303,726 -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no contingent deferred sales charge. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized. 39 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS C SHARES 2004 2003 2002 2001 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82 $ 13.20 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (a) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 0.58 2.15 (1.71) (5.47) 1.29 3.77 ----------- ---------- --------- --------- --------- --------- Total from investment operations 0.51 2.04 (1.82) (5.64) 1.03 3.62 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.94 $ 12.43 $ 10.39 $ 12.21 $ 17.85 $ 16.82 Total return (b) 4.10%(c) 19.63% (14.91)% (31.60)% 6.12% 27.42% ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (d) 2.18%(e) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (d) (1.14)%(e) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 29,501 $ 30,035 $ 30,837 $ 47,069 $ 80,232 $ 46,869 -----------------------------------------------------------------------------------------------------------------------------
(a) Per share data was calculated using average shares outstanding during the period. (b) Total return at net asset value assuming no contingent deferred sales charge. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS E SHARES 2004 2003 2002 2001 2000 (a) 1999 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.17 $ 13.36 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.03) (0.04) (0.03) (0.07) (0.14) (0.05) Net realized and unrealized gain (loss) on investments 0.62 2.24 (1.78) (5.64) 1.31 3.83 ----------- ---------- --------- --------- --------- --------- Total from investment operations 0.59 2.20 (1.81) (5.71) 1.17 3.78 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.61 $ 13.02 $ 10.82 $ 12.63 $ 18.34 $ 17.14 Total return (c) 4.53%(d) 20.33% (14.33)% (31.13)% 6.81% 28.29% ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.53%(f) 1.52% 1.51% 1.49% 1.54% 1.74% Net investment loss (e) (0.49)%(f) (0.38)% (0.28)% (0.48)% (0.77)% (0.31)% Portfolio turnover rate 21%(d) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 7,227 $ 6,908 $ 5,794 $ 6,820 $ 9,171 $ 1,089 -----------------------------------------------------------------------------------------------------------------------------
(a) Class E shares were collapsed into Class G shares on February 28, 2000, which were then redesignated Class E shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 40 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Growth Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS F SHARES 2004 2003 2002 2001 2000 (a) 1999 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.83 $ 13.21 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.07) (0.11) (0.11) (0.17) (0.26) (0.15) Net realized and unrealized gain (loss) on investments 0.59 2.14 (1.71) (5.47) 1.30 3.71 ----------- ---------- --------- --------- --------- --------- Total from investment operations 0.52 2.03 (1.82) (5.64) 1.04 3.56 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 12.96 $ 12.44 $ 10.41 $ 12.23 $ 17.87 $ 16.77 Total return (c) 4.18%(d) 19.50% (14.88)% (31.56)% 6.18% 26.95% ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 2.18%(f) 2.17% 2.16% 2.14% 2.19% 2.39% Net investment loss (e) (1.14)%(f) (1.03)% (0.93)% (1.13)% (1.42)% (0.96)% Portfolio turnover rate 21%(d) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 10,706 $ 10,265 $ 8,709 $ 10,101 $ 13,368 $ 2,025 -----------------------------------------------------------------------------------------------------------------------------
(a) Class F shares were collapsed into Class H shares on February 28, 2000, which were then redesignated Class F shares. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ------------------------------------------------------------------- CLASS Z SHARES 2004 2003 2002 2001 2000 1999 (a) ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23 $ 15.56 ----------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) (0.01) (0.01) 0.01 (0.02) (0.08) (0.02) Net realized and unrealized gain (loss) on investments 0.63 2.29 (1.80) (5.68) 1.31 1.69 ----------- ---------- --------- --------- --------- --------- Total from investment operations 0.62 2.28 (1.80) (5.70) 1.23 1.67 ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 13.86 $ 13.24 $ 10.96 $ 12.76 $ 18.46 $ 17.23 Total return 4.68%(c) 20.80% (14.11)% (30.88)% 7.14% 10.73%(c) ----------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (d) 1.18%(e) 1.17% 1.16% 1.14% 1.19% 0.79%(e) Net investment income (loss) (d) (0.14)%(e) (0.03)% 0.07% (0.13)% (0.42)% (0.13)%(e) Portfolio turnover rate 21%(c) 39% 42% 82% 69% 80% Net assets, end of period (000's) $ 463 $ 442 $ 80 $ 915 $ 1,941 $ 1 -----------------------------------------------------------------------------------------------------------------------------
(a) Class Z shares were initially offered on January 11, 1999. Per share data and total return reflect activity from that date. (b) Per share data was calculated using average shares outstanding during the period. (c) Not annualized. (d) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (e) Annualized. 41 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Growth Fund II SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS A SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.33 $ 6.94 $ 7.92 $ 11.55 $ 12.00 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.02) (0.02) (0.02) (0.04) (0.07) Net realized and unrealized gain (loss) on investments 0.38 1.41 (0.96) (3.59) (0.38) ----------- --------- --------- --------- --------- Total from investment operations 0.36 1.39 (0.98) (3.63) (0.45) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.69 $ 8.33 $ 6.94 $ 7.92 $ 11.55 Total return (c)(d) 4.32%(e) 20.03% (12.37)% (31.43)% (3.75)%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.50%(g) 1.50% 1.50% 1.50% 1.50%(g) Net investment loss (f) (0.45)%(g) (0.33)% (0.29)% (0.42)% (0.84)%(g) Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 7,045 $ 7,515 $ 7,692 $ 9,486 $ 6,769 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no initial sales charge or contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS B SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.10 $ 6.80 $ 7.82 $ 11.51 $ 12.00 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.05) (0.08) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 0.37 1.38 (0.94) (3.58) (0.37) ----------- --------- --------- --------- --------- Total from investment operations 0.32 1.30 (1.02) (3.69) (0.49) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.42 $ 8.10 $ 6.80 $ 7.82 $ 11.51 Total return (c)(d) 3.95%(e) 19.12% (13.04)% (32.06)% (4.08)%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.20)%(g) (1.08)% (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 30,345 $ 31,557 $ 30,871 $ 42,391 $ 50,859 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 42 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Growth Fund II SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS C SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.08 $ 6.78 $ 7.80 $ 11.50 $ 12.00 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.05) (0.08) (0.08) (0.11) (0.12) Net realized and unrealized gain (loss) on investments 0.37 1.38 (0.94) (3.59) (0.38) ----------- --------- --------- --------- --------- Total from investment operations 0.32 1.30 (1.02) (3.70) (0.50) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.40 $ 8.08 $ 6.78 $ 7.80 $ 11.50 Total return (c)(d) 3.96%(e) 19.17% (13.08)% (32.17)% (4.17)%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.25% 2.25% 2.25% 2.25%(g) Net investment loss (f) (1.20)%(g) (1.08)% (1.04)% (1.17)% (1.59)%(g) Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 6,420 $ 6,444 $ 6,481 $ 8,994 $ 5,801 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming no contingent deferred sales charge. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, --------------------------------------------------- CLASS Z SHARES 2004 2003 2002 2001 2000 (a) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 8.39 $ 6.97 $ 7.95 $ 11.58 $ 12.00 -------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment loss (b) (0.01) (0.01) --(c) (0.02) (0.05) Net realized and unrealized gain (loss) on investments 0.39 1.43 (0.98) (3.61) (0.37) ----------- --------- --------- --------- --------- Total from investment operations 0.38 1.42 (0.98) (3.63) (0.42) -------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 8.77 $ 8.39 $ 6.97 $ 7.95 $ 11.58 Total return (d) 4.53%(e) 20.37% (12.33)% (31.35)% (3.50)%(e) -------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.25%(g) 1.25% 1.25% 1.25% 1.25%(g) Net investment loss (f) (0.20)%(g) (0.08)% (0.04)% (0.17)% (0.59)%(g) Waiver/reimbursement 0.14%(g) 0.25% 0.20% 0.16% 0.62%(g) Portfolio turnover rate 20%(e) 36% 49% 90% 32%(e) Net assets, end of period (000's) $ 1,072 $ 831 $ 894 $ 1,211 $ 4,740 --------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on March 7, 2000. (b) Per share data was calculated using average shares outstanding during the period. (c) Rounds to less than $0.01 per share. (d) Had the Investment Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 43 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- CLASS A SHARES 2004 2003 2002 2001 2000 1999 (a) ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64 $ 12.00 ---------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.04 0.07 0.04 0.04 0.04 --(c) Net realized and unrealized gain (loss) on investments 0.88 1.14 (2.55) (0.05) 0.73 (1.36) ----------- ---------- ---------- ---------- --------- --------- Total from investment operations 0.92 1.21 (2.51) (0.01) 0.77 (1.36) ---------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.09) -- -- -- -- -- ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.93 $ 10.10 $ 8.89 $ 11.40 $ 11.41 $ 10.64 Total return (d) 9.09%(e) 13.61% (22.02)% (0.09)% 7.24% (11.33)%(e) ---------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 1.55%(g) 1.70% 1.61% 1.71% 1.80% 1.77%(g) Net investment income (f) 0.78%(g) 0.72% 0.34% 0.32% 0.39% --%(g)(h) Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $ 15,763 $ 16,725 $ 19,767 $ 25,694 $ 14,017 $ 7,528 ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999. (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) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. (h) Rounds to less than 0.01%.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- CLASS B SHARES 2004 2003 2002 2001 2000 1999 (a) ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ---------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) --(c) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments 0.85 1.12 (2.50) (0.04) 0.72 (1.35) ----------- ---------- ---------- ---------- --------- --------- Total from investment operations 0.85 1.12 (2.54) (0.08) 0.69 (1.39) ---------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income --(c) -- -- -- -- -- ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.65 $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 Total return (d) 8.69%(e) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e) ---------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.40% 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.08%(g) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $ 49,985 $ 50,117 $ 52,701 $ 69,720 $ 49,112 $ 14,622 ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999. (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 contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized. 44 FINANCIAL HIGHLIGHTS____________________________________________________________ Columbia Tax-Managed Value Fund SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- CLASS C SHARES 2004 2003 2002 2001 2000 1999 (a) ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 $ 12.00 ---------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss) (b) --(c) --(c) (0.04) (0.04) (0.03) (0.04) Net realized and unrealized gain (loss) on investments 0.85 1.12 (2.50) (0.04) 0.72 (1.35) ----------- ---------- ---------- ---------- --------- --------- Total from investment operations 0.85 1.12 (2.54) (0.08) 0.69 (1.39) ---------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income --(c) -- -- -- -- -- ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 10.65 $ 9.80 $ 8.68 $ 11.22 $ 11.30 $ 10.61 Total return (d) 8.69%(e) 12.90% (22.64)% (0.71)% 6.50% (11.58)%(e) ---------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (f) 2.25%(g) 2.40% 2.31% 2.41% 2.50% 2.60%(g) Net investment income (loss) (f) 0.08%(g) 0.02% (0.36)% (0.38)% (0.31)% (0.83)%(g) Portfolio turnover rate 21%(e) 68% 72% 47% 76% 19%(e) Net assets, end of period (000's) $ 12,916 $ 13,674 $ 17,463 $ 21,367 $ 10,331 $ 4,137 ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999. (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 contingent deferred sales charge. (e) Not annualized. (f) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (g) Annualized.
(UNAUDITED) SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ----------------------------------------------------------------- CLASS Z SHARES 2004 2003 2002 2001 2000 1999 (a) ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65 $ 12.00 ---------------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (b) 0.06 0.10 0.07 0.07 0.07 0.01 Net realized and unrealized gain (loss) on investments 0.88 1.16 (2.57) (0.04) 0.71 (1.36) ----------- ---------- ---------- ---------- --------- --------- Total from investment operations 0.94 1.26 (2.50) 0.03 0.78 (1.35) ---------------------------------------------------------------------------------------------------------------------------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS: From net investment income (0.12) -- -- -- -- -- ---------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 11.04 $ 10.22 $ 8.96 $ 11.46 $ 11.43 $ 10.65 Total return (c) 9.25%(d) 14.06% (21.82)% 0.26% 7.32% (11.25)%(d) ---------------------------------------------------------------------------------------------------------------------------- RATIO TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA: Expenses (e) 1.25%(f) 1.40% 1.31% 1.41% 1.50% 1.50%(f) Net investment income (e) 1.08%(f) 1.02% 0.64% 0.62% 0.69% 0.27%(f) Portfolio turnover rate 21%(d) 68% 72% 47% 76% 19%(d) Net assets, end of period (000's) $ 45 $ 32 $ 1 $ 1 $ 1 $ 2,396 ----------------------------------------------------------------------------------------------------------------------------
(a) The Fund commenced investment operations on June 1, 1999. (b) Per share data was calculated using average shares outstanding during the period. (c) Total return at net asset value assuming all distributions reinvested. (d) Not annualized. (e) The benefits derived from custody credits and directed brokerage arrangements, if applicable, had an impact of less than 0.01%. (f) Annualized. 45 SHAREHOLDER MEETING RESULTS_____________________________________________________ Columbia Tax-Managed Funds On June 7, 2004, a Special Meeting of Shareholders of the Columbia Tax-Managed Growth Fund was held to conduct a vote for or against the approval of the following Item listed on the Fund's Proxy Statement for said Meeting. On March 31, 2004, the record date for the Meeting, the Columbia Tax-Managed Growth Fund had 24,660,366.70 shares outstanding. The votes cast were as follows: PROPOSAL 1: Approval of a new Sub-Advisory Agreement between Columbia Management Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to the Columbia Tax-Managed Growth Fund. FOR: AGAINST: ABSTAIN: ------------- ---------- ---------- 16,535,187.95 167,395.79 364,920.39 The new Sub-Advisory Agreement between Columbia Management Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to Columbia Tax-Managed Growth Fund was approved. On June 7, 2004, a Special Meeting of Shareholders of the Columbia Tax-Managed Growth Fund II was held to conduct a vote for or against the approval of the following Item listed on the Fund's Proxy Statement for said Meeting. On March 31, 2004, the record date for the Meeting, the Columbia Tax-Managed Growth Fund II had 5,384,171.69 shares outstanding. The votes cast were as follows: PROPOSAL 1: Approval of a new Sub-Advisory Agreement between Columbia Management Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to the Columbia Tax-Managed Growth Fund II. FOR: AGAINST: ABSTAIN: ------------ --------- ---------- 4,033,129.71 31,244.48 105,047.15 The new Sub-Advisory Agreement between Columbia Management Advisors, Inc. and Stein Roe Investment Counsel, Inc. with regard to Columbia Tax-Managed Growth Fund II was approved. 46 IMPORTANT INFORMATION ABOUT THIS REPORT_________________________________________ Columbia Tax-Managed Funds TRANSFER AGENT Columbia Funds Services, Inc. P.O. Box 8081 Boston MA 02266-8081 800.345.6611 DISTRIBUTOR Columbia Funds Distributor, Inc. One Financial Center Boston MA 02111 INVESTMENT ADVISOR Columbia Management Advisors, Inc. 100 Federal Street Boston MA 02110 The funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 800-345-6611 and additional reports will be sent to you. This report has been prepared for shareholders of Columbia Tax-Managed Funds. This report may also be used as sales literature when preceded or accompanied by the current prospectus which provides details of sales charges, investment objectives and operating policies of the funds and with the most recent copy of the Columbia Funds Performance Update. A description of the policies and procedures that the funds use to determine how to vote proxies relating to their portfolio securities is available (i) without charge, upon request, by calling 800-345-6611 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. Please note that on March 1, 2004, Ernst & Young LLP ("E&Y") resigned as the independent registered public accounting firm for Columbia Tax-Managed Aggressive Growth Fund and Columbia Tax-Managed Growth Fund II. During the two most recent fiscal years, E&Y's audit reports contained no adverse opinion or disclaimer of opinion; nor were its reports qualified or modified as to uncertainty, audit scope, or accounting principle. Further, in connection with its audits for the two most recent fiscal years and through March 1, 2004, there were no disagreements between the funds and E&Y on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which if not resolved to the satisfaction of E&Y would have caused it to make reference to the disagreement in its report on the financial statements for such years. Effective March 1, 2004, PricewaterhouseCoopers LLP was appointed by the audit committee of the Board of Trustees as the independent registered public accounting firm of the funds for the fiscal year ended October 31, 2004. 47 COLUMBIA FUNDS__________________________________________________________________ Columbia Tax-Managed Funds -------------------------------------------------- LARGE GROWTH Columbia Common Stock Columbia Growth Columbia Growth Stock Columbia Large Cap Growth Columbia Tax-Managed Growth Columbia Tax-Managed Growth II Columbia Young Investor -------------------------------------------------- LARGE VALUE Columbia Disciplined Value Columbia Growth & Income Columbia Large Cap Core Columbia Tax-Managed Value -------------------------------------------------- MIDCAP GROWTH Columbia Acorn Select Columbia Mid Cap Growth Columbia Tax-Managed Aggressive Growth -------------------------------------------------- MIDCAP VALUE Columbia Dividend Income Columbia Mid Cap Columbia Strategic Investor -------------------------------------------------- SMALL GROWTH Columbia Acorn Columbia Acorn USA Columbia Small Company Equity -------------------------------------------------- SMALL VALUE Columbia Small Cap Columbia Small Cap Value -------------------------------------------------- BALANCED Columbia Asset Allocation Columbia Balanced Columbia Liberty Fund -------------------------------------------------- SPECIALTY Columbia Real Estate Equity Columbia Technology Columbia Utilities -------------------------------------------------- TAXABLE FIXED-INCOME Columbia Contrarian Income Columbia Corporate Bond Columbia Federal Securities Columbia Fixed Income Securities Columbia High Yield Columbia High Yield Opportunities Columbia Income Columbia Intermediate Bond Columbia Intermediate Government Income Columbia Quality Plus Bond Columbia Short Term Bond Columbia Strategic Income -------------------------------------------------- FLOATING RATE Columbia Floating Rate Columbia Floating Rate Advantage -------------------------------------------------- TAX EXEMPT Columbia High Yield Municipal Columbia Intermediate Tax-Exempt Bond Columbia Managed Municipals Columbia National Municipal Bond Columbia Tax-Exempt Columbia Tax-Exempt Insured 48 ________________________________________________________________________________ Columbia Tax-Managed Funds -------------------------------------------------- SINGLE STATE TAX EXEMPT Columbia California Tax-Exempt Columbia Connecticut Intermediate Municipal Bond Columbia Connecticut Tax-Exempt Columbia Florida Intermediate Municipal Bond Columbia Massachusetts Intermediate Municipal Bond Columbia Massachusetts Tax-Exempt Columbia New Jersey Intermediate Municipal Bond Columbia New York Intermediate Municipal Bond Columbia New York Tax-Exempt Columbia Oregon Municipal Bond Columbia Pennsylvania Intermediate Municipal Bond Columbia Rhode Island Intermediate Municipal Bond -------------------------------------------------- MONEY MARKET Columbia Money Market Columbia Municipal Money Market -------------------------------------------------- INTERNATIONAL/GLOBAL Columbia Acorn International Columbia Acorn International Select Columbia Europe Columbia Global Equity Columbia International Equity Columbia International Stock Columbia Newport Asia Pacific Columbia Newport Greater China Columbia Newport Tiger -------------------------------------------------- INDEX Columbia Large Company Index Columbia Small Company Index Columbia U.S. Treasury Index Please consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. Contact us at 800-345-6611 for a prospectus which contains this and other important information about the fund. Read it carefully before you invest. For complete product information on any Columbia fund, visit our website at www.columbiafunds.com. Columbia Management Group and Columbia Management refer collectively to the various investment advisory subsidiaries of Columbia Management Group, including Columbia Management Advisors, Inc., the registered investment advisor, and Columbia Funds Distributor, Inc. 49 [PHOTO OF eDELIVERY] Help your fund reduce printing and postage costs! Elect to get your shareholder reports by electronic delivery. With Columbia's eDelivery program, you receive an e-mail message when your shareholder report becomes available online. If your fund account is registered with Columbia Funds, you can sign up quickly and easily on our website at www.columbiafunds.com. Please note -- if you own your fund shares through a financial institution, contact the institution to see if it offers electronic delivery. If you own your fund shares through a retirement plan, electronic delivery may not be available to you. COLUMBIA TAX-MANAGED FUNDS SEMIANNUAL REPORT, APRIL 30, 2004 PRSRT STD U.S. Postage PAID Holliston, MA Permit NO.20 [EAGLE HEAD LOGO] COLUMBIAFUNDS A MEMBER OF COLUMBIA MANAGEMENT GROUP (C)2004 COLUMBIA FUNDS DISTRIBUTOR, INC. ONE FINANCIAL CENTER, BOSTON, MA 02111-2621 800.345.6611 WWW.COLUMBIAFUNDS.COM TM-03/827R-0404 (06/04)04/1360 ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable at this time. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant has not filed Schedule 14A subsequent to the effective date of that Schedule's Item 7(d)(2)(ii)(G). However, it is the registrant's policy to consider candidates for the Board of Trustees/Directors who are recommend by shareholders. A Fund shareholder who wishes to nominate a candidate to the Board may send information regarding prospective candidates to the Fund's Governance Committee, care of the Fund's Secretary. The information should include evidence of the shareholder's Fund ownership, a full listing of the proposed candidate's education, experience, current employment, date of birth, names and addresses of at least three professional references, information as to whether the candidate is not an "interested person" under the 1940 Act and "independent" under NYSE Listing Standards in relation to the Fund, and such other information as may be helpful to the independent trustees/directors in evaluating the candidate. All satisfactorily completed information packages regarding a candidate will be forwarded to an independent trustee/director for consideration. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer, based on his evaluation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing of this report, has concluded that such controls and procedures are adequately designed to ensure that information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant's management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 11. EXHIBITS. (a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not applicable at this time. (a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. (a)(3) Not applicable. (b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) Columbia Funds Trust I ------------------------------------------------------------------ By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, President and Treasurer Date June 30, 2004 -------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title) /s/ J. Kevin Connaughton ------------------------------------------------------ J. Kevin Connaughton, President and Treasurer Date June 30, 2004 --------------------------------------------------------------------------