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                        COLUMBIA COMMON STOCK FUND, INC.
                           COLUMBIA GROWTH FUND, INC.
                     COLUMBIA INTERNATIONAL STOCK FUND, INC.
                           COLUMBIA SPECIAL FUND, INC.
                          COLUMBIA SMALL CAP FUND, INC.
                     COLUMBIA REAL ESTATE EQUITY FUND, INC.
                         COLUMBIA TECHNOLOGY FUND, INC.
                       COLUMBIA STRATEGIC VALUE FUND, INC.
                          COLUMBIA BALANCED FUND, INC.
                       COLUMBIA SHORT TERM BOND FUND, INC.
                   COLUMBIA FIXED INCOME SECURITIES FUND, INC.
                   COLUMBIA NATIONAL MUNICIPAL BOND FUND, INC.
                    COLUMBIA OREGON MUNICIPAL BOND FUND, INC.
                         COLUMBIA HIGH YIELD FUND, INC.
                          COLUMBIA DAILY INCOME COMPANY

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                       STATEMENT OF ADDITIONAL INFORMATION

                                 Columbia Funds
                             1300 S.W. Sixth Avenue
                                  P.O. Box 1350
                             Portland, Oregon 97207
                                 (503) 222-3600

     This Statement of Additional Information contains information relating to
15 mutual funds: Columbia Common Stock Fund, Inc. (the "Common Stock Fund" or
"CCSF"), Columbia Growth Fund, Inc. (the "Growth Fund" or "CGF"), Columbia
International Stock Fund, Inc. (the "International Stock Fund" or "CISF"),
Columbia Special Fund, Inc. (the "Special Fund" or "CSF"), Columbia Small Cap
Fund, Inc. (the "Small Cap Fund" or "CSCF"), Columbia Real Estate Equity Fund,
Inc. (the "Real Estate Fund" or "CREF"), Columbia Technology Fund, Inc. (the
"Technology Fund" or "CTF"), Columbia Strategic Value Fund, Inc. (the "Strategic
Value Fund" or "CSVF"), Columbia Balanced Fund, Inc. (the "Balanced Fund" or
"CBF"), Columbia Short Term Bond Fund, Inc. (the "Short Term Bond Fund" or
"CSTB"), Columbia Fixed Income Securities Fund, Inc. (the "Fixed Income
Securities Fund" or "CFIS"), Columbia National Municipal Bond Fund, Inc. (the
"National Municipal Bond Fund" or "CNMF"), Columbia Oregon Municipal Bond Fund,
Inc. (the "Oregon Municipal Bond Fund" or "CMBF"), Columbia High Yield Fund,
Inc. (the "High Yield Fund" or "CHYF"), and Columbia Daily Income Company (the
"Columbia Daily Income Company" or "CDIC") (each a "Fund" and together the
"Funds").

     Each Fund offers its shares through one or more prospectuses (each a
"Prospectus"). This Statement of Additional Information is not a Prospectus and
should be read in conjunction with the applicable Prospectus. Copies of the
Prospectus are available without charge upon request by calling 1-800-426-3750.

     The Funds' most recent Annual and Semi-Annual Reports to shareholders are
separate documents supplied with this Statement of Additional Information. The
financial statements, accompanying notes and report of independent accountants
appearing in the Annual Reports, and the financial statements and accompanying
notes appearing in the Semi-Annual Report are incorporated by reference into
this Statement of Additional Information.



COL-16/612N-0403


                                TABLE OF CONTENTS

Description of the Funds.......................................................3
Investment Restrictions.......................................................16
Management....................................................................32
Investment Advisory and Other Services Provided by Affiliates.................42
Portfolio Transactions........................................................47
Capital Stock and Other Securities............................................50
Distribution and Servicing....................................................51
Purchase, Redemption and Pricing of Shares....................................52
Custodian.....................................................................59
Independent Accountants.......................................................60
Taxes.........................................................................60
Yield and Performance.........................................................67
Financial Statements..........................................................71
Appendix I....................................................................72
Appendix II...................................................................73

                                   May 1, 2003


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                            DESCRIPTION OF THE FUNDS
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     Each of the Funds is an open-end, management investment company. Each Fund,
other than the Oregon Municipal Bond Fund and the Columbia Technology Fund, is
diversified, which means that, with respect to 75 percent of its total assets,
the Fund will not invest more than 5 percent of its assets in the securities of
any single issuer. The investment adviser for each of the Funds is Columbia
Management Advisors, Inc. (the "Adviser"). See the section entitled "INVESTMENT
ADVISORY AND OTHER FEES PAID TO AFFILIATES" for further information about the
Adviser:

INVESTMENTS HELD AND INVESTMENT PRACTICES USED BY THE FUNDS

     The Prospectus describes the fundamental investment objective and the
principal investment strategy applicable to each Fund. The investment objective
of each Fund, other than the Special Fund, may not be changed without
shareholder approval. The Special Fund's Board of Directors may change its
investment objective, without shareholder approval, upon 30 days written notice
to all shareholders. What follows is additional information regarding securities
in which a Fund may invest and investment practices in which it may engage. To
determine whether a Fund purchases such securities or engages in such practices,
see the chart on pages 14 and 15 of this Statement of Additional Information.

Securities Rating Agencies

     Rating agencies are private services that provide ratings of the credit
quality of fixed income securities. The following is a description of the fixed
income securities ratings used by Moody's Investor Services, Inc. ("Moody's")
and Standard & Poor's, a division of the McGraw-Hill Companies ("S&P").
Subsequent to its purchase by a Fund, a security may cease to be rated, or its
rating may be reduced below the criteria set forth for the Fund. Neither event
would require the elimination of the security from the Fund's portfolio, but the
Adviser will consider that event in its determination of whether the Fund should
continue to hold such security in its portfolio. Ratings assigned by a
particular rating agency are not absolute standards of credit quality and do not
evaluate market risk. Rating agencies may fail to make timely changes in credit
ratings and an issuer's current financial condition may be better or worse than
a rating indicates.

BOND RATINGS. MOODY'S -- The following is a description of Moody's bond ratings:

     Aaa - Best quality; smallest degree of investment risk.

     Aa - High quality by all standards.

     Aa and Aaa are known as high-grade bonds.

     A - Many favorable investment attributes; considered upper medium-grade
obligations.

     Baa - Medium-grade obligations; neither highly protected nor poorly
secured. Interest and principal appear adequate for the present, but certain
protective elements may be lacking or may be characteristically unreliable over
any great length of time.

     Ba - Speculative elements; future cannot be considered well assured.
Protection of interest and principal payments may be very moderate and not well
safeguarded during both good and bad times over the future.

     B - Generally lack characteristics of a desirable investment. Assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.

     Caa - Poor standing, may be in default; elements of danger with respect to
principal or interest.

     S&P -- The following is a description of S&P's bond ratings:

     AAA - Highest rating; extremely strong capacity to pay principal and
interest.

     AA - Also high-quality with a very strong capacity to pay principal and
interest; differ from AAA issues only by a small degree.

     A - Strong capacity to pay principal and interest; somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions.

     BBB - Adequate capacity to pay principal and interest; normally exhibit
adequate protection parameters, but adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay principal
and interest than for higher-rated bonds.

     Bonds rated AAA, AA, A, and BBB are considered investment grade bonds.

     BB - Less near-term vulnerability to default than other speculative grade
debt; face major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions that could lead to inadequate capacity to meet
timely interest and principal payments.

     B - Greater vulnerability to default but presently have the capacity to
meet interest payments and principal repayments; adverse business, financial, or
economic conditions would likely impair capacity or willingness to pay interest
and repay principal.

     CCC - Current identifiable vulnerability to default and dependent upon
favorable business, financial, and economic conditions to meet timely payments
of interest and repayments of principal. In the event of adverse business,
financial, or economic conditions, they are not likely to have the capacity to
pay interest and repay principal.

     Bonds rated BB, B, and CCC are regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal. BB
indicates the least degree of speculation and CCC a higher degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

     A Fund may purchase unrated securities (which are not rated by a rating
agency) if its portfolio manager determines that a security is of comparable
quality to a rated security that the Fund may purchase. Unrated securities may
be less liquid than comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's comparative credit
rating. Analysis of the creditworthiness of issuers of lower rated securities
may be more complex than for issuers of higher-quality fixed income securities.
To the extent that a Fund invests in unrated securities, the Fund's success in
achieving its investment objective is determined more heavily by the portfolio
manager's creditworthiness analysis than if the Fund invested exclusively in
rated securities.

Non-Investment Grade Securities ("Junk Bonds")

     Investments in securities rated below investment grade (i.e., rated Ba or
lower by Moody's or BB or lower by S&P) that are eligible for purchase by
certain of the Funds and in particular, by the Columbia High Yield Fund, are
described as "speculative" by both Moody's and S&P. Investments in lower rated
corporate debt securities ("high yield securities" or "junk bonds") generally
provide greater income and increased opportunity for capital appreciation than
investments in higher quality securities, but they also typically entail greater
price volatility and principal and income risk. These high yield securities are
regarded as predominately speculative with respect to the issuer's continuing
ability to meet principal and interest payments. Analysis of the
creditworthiness of issuers of high yield securities may be more complex than
for issuers of higher quality debt securities.

     High yield securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment grade securities.
The prices of high yield securities have been found to be less sensitive to
interest-rate changes than higher-rated investments, but more sensitive to
adverse economic downturns or individual corporate developments. A projection of
an economic downturn or of a period of rising interest rates, for example, could
cause a decline in high yield security prices because the advent of a recession
could lessen the ability of a highly leveraged company to make principal and
interest payments on its debt securities. If an issuer of debt securities
defaults, in addition to risking payment of all or a portion of interest and
principal, the Funds investing in such securities may incur additional expenses
to seek recovery. The Adviser seeks to reduce these risks through
diversification, credit analysis and attention to current developments and
trends in both the economy and financial markets.

     The secondary market on which high yield securities are traded may be less
liquid than the market for higher grade securities. Less liquidity in the
secondary trading market could adversely affect the price at which the Fund
could sell a high yield security, and could adversely affect the daily net asset
value of the Fund's shares. Adverse publicity and investor perceptions, whether
or not based on fundamental analysis, may decrease the values and liquidity of
high yield securities, especially in a thinly-traded market. When secondary
markets for high yield securities are less liquid than the market for higher
grade securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
The Adviser seeks to minimize the risks of investing in all securities through
diversification, in-depth credit analysis and attention to current developments
in interest rates and market conditions.

     The use of credit ratings as the sole method of evaluating high yield
securities can involve certain risks. For example, credit ratings evaluate the
safety of principal and interest payments, not the market value risk of high
yield securities. Also, credit rating agencies may fail to change credit ratings
in a timely fashion to reflect events since the security was last rated. The
Adviser does not rely solely on credit ratings when selecting securities for the
Funds, and develops its own independent analysis of issuer credit quality. If a
credit rating agency changes the rating of a portfolio security held by a Fund,
the Fund may retain the portfolio security if the Adviser deems it in the best
interest of shareholders.

Bank Obligations

     Bank obligations in which the Funds may invest include certificates of
deposit, bankers' acceptances, and fixed time deposits. Certificates of deposit
are negotiable certificates issued against funds deposited in a commercial bank
for a definite period of time and earning a specified return. Bankers'
acceptances are negotiable drafts or bills of exchange, normally drawn by an
importer or exporter to pay for specific merchandise, which are "accepted" by a
bank, meaning, in effect, that the bank unconditionally agrees to pay the face
value of the instrument on maturity. Fixed time deposits are bank obligations
payable at a stated maturity date and bearing interest at a fixed rate. Fixed
time deposits may be withdrawn on demand by the investor, but may be subject to
early withdrawal penalties, which vary depending upon market conditions and on
the right to transfer a beneficial interest in a fixed time deposit to a third
party, although there is no market for such deposits.

     Bank obligations include foreign bank obligations including Eurodollar and
Yankee obligations. Eurodollar bank obligations are dollar certificates of
deposits and time deposits issued outside the U.S. capital markets by foreign
branches of U.S. banks and by foreign banks. Yankee obligations are
dollar-denominated obligations issued in the U.S. capital markets by foreign
banks. Foreign bank obligations are subject to the same risks that pertain to
domestic issues, notably credit risk and interest rate risk. Additionally,
foreign bank obligations are subject to many of the same risks as investments in
foreign securities (see "Foreign Equity Securities" below). Obligations of
foreign banks involve somewhat different investment risks than those affecting
obligations of United States banks, including the possibilities that their
liquidity could be impaired because of future political and economic
developments, that their obligations may be less marketable than comparable
obligations of United States banks, that a foreign jurisdiction might impose
withholding taxes on interest income payable on those obligations, that foreign
deposits may be seized or nationalized, that foreign governmental restrictions
such as exchange controls may be adopted, which might adversely affect the
payment of principal and interest on those obligations and that the selection of
those obligations may be more difficult because there may be less publicly
available information concerning foreign banks or the accounting, auditing and
financial reporting standards, practices and requirements applicable to foreign
banks may differ from those applicable to United States banks. Foreign banks are
not generally subject to examination by any U.S. Government agency or
instrumentality.

Commercial Paper

     A1 and Prime 1 are the highest commercial paper ratings issued by S&P and
Moody's, respectively.

     Commercial paper rated A1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated A or better; (3) the issuer has access to at least two additional
channels of borrowing; (4) basic earnings and cash flow have an upward trend
with an allowance made for unusual circumstances; (5) typically, the issuer's
industry is well established and the issuer has a strong position within the
industry; and (6) the reliability and quality of management are unquestioned.

     Among the factors considered by Moody's in assigning ratings are the
following: (1) evaluation of the management of the issuer; (2) economic
evaluation of the issuer's industry or industries and an appraisal of
speculative-type risks which may be inherent in certain areas; (3) evaluation of
the issuer's products in relation to competition and customer acceptance; (4)
liquidity; (5) amount and quality of long-term debt; (6) trend of earnings over
a period of 10 years; (7) financial strength of a parent company and the
relationships which exist with the issuer; and (8) recognition by the management
of obligations that may be present or may arise as a result of public interest
questions and preparation to meet such obligations.

Government Securities

     Government securities may be either direct obligations of the U.S. Treasury
or may be the obligations of an agency or instrumentality of the United States.

     TREASURY OBLIGATIONS. The U.S. Treasury issues a variety of marketable
securities that are direct obligations of the U.S. Government. These securities
fall into three categories - bills, notes, and bonds - distinguished primarily
by their maturity at time of issuance. Treasury bills have maturities of one
year or less at the time of issuance, while Treasury notes currently have
maturities of 1 to 10 years. Treasury bonds can be issued with any maturity of
more than 10 years.

     OBLIGATIONS OF AGENCIES AND INSTRUMENTALITIES. Agencies and
instrumentalities of the U.S. Government are created to fill specific
governmental roles. Their activities are primarily financed through securities
whose issuance has been authorized by Congress. Agencies and instrumentalities
include the Export Import Bank, Federal Housing Administration, Government
National Mortgage Association, Tennessee Valley Authority, Banks for
Cooperatives, Farmers Home Administration, Federal Home Loan Banks, Federal
Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association, Federal Home Loan Mortgage Corp., U.S. Postal System, and Federal
Finance Bank. Although obligations of "agencies" and "instrumentalities" are not
direct obligations of the U.S. Treasury, payment of the interest or principal on
these obligations is generally backed directly or indirectly by the U.S.
Government. This support can range from backing by the full faith and credit of
the United States or U.S. Treasury guarantees to the backing solely of the
issuing instrumentality itself.

Mortgage-Backed Securities and Mortgage Pass-Through Securities

     Mortgage-backed securities are interests in pools of mortgage loans,
including mortgage loans made by savings and loan institutions, mortgage
bankers, commercial banks and others. Mortgage-backed securities are sold to
investors by various governmental, government-related and private organizations
as further described below. A Fund may also invest in debt securities that are
secured with collateral consisting of mortgage-backed securities (see
"Collateralized Mortgage Obligations") and in other types of mortgage-related
securities.

     Because principal may be prepaid at any time, mortgage-backed securities
involve significantly greater price and yield volatility than traditional debt
securities. A decline in interest rates may lead to a faster rate of repayment
of the underlying mortgages and expose the Fund to a lower rate of return upon
reinvestment. To the extent that mortgage-backed securities are held by a Fund,
the prepayment right will tend to limit to some degree the increase in net asset
value of the Fund because the value of the mortgage-backed securities held by
the Fund may not appreciate as rapidly as the price of non-callable debt
securities. When interest rates rise, mortgage prepayment rates tend to decline,
thus lengthening the duration of mortgage-related securities and increasing
their price volatility, affecting the price volatility of a Fund's shares.

     Interests in pools of mortgage-backed securities differ from other forms of
debt securities, which normally provide for periodic payment of interest in
fixed amounts with principal payments at maturity or specified call dates.
Instead, these securities provide a monthly payment which consists of both
interest and principal payments. In effect, these payments are a "pass-through"
of the monthly payments made by the individual borrowers on their mortgage
loans, net of any fees paid to the issuer or guarantor of such securities.
Additional payments are caused by repayments of principal resulting from the
sale of the underlying property, refinancing or foreclosure, net of fees or
costs incurred. Some mortgage-related securities (such as securities issued by
the Government National Mortgage Association) are described as "modified
pass-through." These securities entitle the holder to receive all interest and
principal payments owed on the mortgage pool, net of certain fees, at the
scheduled payment dates regardless of whether or not the mortgagor actually
makes the payment.

     The principal governmental guarantor of mortgage-related securities is the
Government National Mortgage Association ("GNMA"). GNMA is a wholly owned U.S.
Government corporation within the Department of Housing and Urban Development.
GNMA is authorized to guarantee, with the full faith and credit of the U.S.
Government, the timely payment of principal and interest on securities issued by
institutions approved by GNMA (such as savings and loan institutions, commercial
banks, and mortgage bankers) and backed by pools of FHA-insured or VA-guaranteed
mortgages. These guarantees, however, do not apply to the market value or yield
of mortgage-backed securities or to the value of a Fund's shares. Also, GNMA
securities often are purchased at a premium over the maturity value of the
underlying mortgages. This premium is not guaranteed and will be lost if
prepayment occurs.

     Government-related guarantors (i.e., not backed by the full faith and
credit of the U.S. Government) include the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA is a
government-sponsored corporation owned entirely by private stockholders. It is
subject to regulation by the Secretary of Housing and Urban Development. FNMA
purchases conventional (i.e., not insured or guaranteed by any government
agency) mortgages from a list of approved seller/servicers, which include state
and federally-chartered savings and loan associations, mutual savings banks,
commercial banks, credit unions and mortgage bankers. Pass-through securities
issued by FNMA are guaranteed as to timely payment of principal and interest by
FNMA, but are not backed by the full faith and credit of the U.S. Government.

     FHLMC is a corporate instrumentality of the U.S. Government and was created
in 1970 for the purpose of increasing the availability of mortgage credit for
residential housing. Its stock is owned by the twelve Federal Home Loan Banks.
FHLMC issues Participation Certificates ("PCs"), which represent interests in
conventional mortgages from FHLMC's national portfolio. FHLMC guarantees the
timely payment of interest and ultimate collection of principal, but PCs are not
backed by the full faith and credit of the U.S. Government.

     Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers, and other secondary market issuers also create
pass-through pools of conventional mortgage loans. These issuers may, in
addition, be the originators and/or servicers of the underlying mortgage loans
as well as the guarantors of the mortgage-related securities. Pools created by
non-governmental issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government or agency guarantees of payments. However, timely payment of interest
and principal of these pools may be supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance and
letters of credit. The insurance and guarantees are issued by governmental
entities, private insurers, and the mortgage poolers. Such insurance and
guarantees and the creditworthiness of its issuers will be considered in
determining whether a mortgage-related security meets a Fund's investment
quality standards. There is no assurance that the private insurers or guarantors
will meet their obligations under the insurance policies or guarantee
arrangements. A Fund may buy mortgage-related securities without insurance or
guarantees if, through an examination of the loan experience and practices of
the originators/servicers and poolers, the Adviser determines that the
securities meet the Fund's quality standards. Although the market for such
securities is becoming increasingly liquid, securities issued by certain private
organizations may not be readily marketable.

Collateralized Mortgage Obligations ("CMOs")

     CMOs are hybrids between mortgage-backed bonds and mortgage pass-through
securities. Similar to a bond, interest and prepaid principal are paid, in most
cases, semiannually. CMOs may be collateralized by whole mortgage loans but are
more typically collateralized by portfolios of mortgage pass-through securities,
guaranteed by GNMA, FHLMC, or FNMA, and their income streams.

     CMOs are structured into multiple classes, each bearing a different stated
maturity. Actual maturity and average life will depend upon the prepayment
experience of the collateral. CMOs provide for a modified form of call
protection through a de facto breakdown of the underlying pool of mortgages
according to how quickly the loans are repaid. Monthly payment of principal
received from the pool of underlying mortgages, including prepayments, is first
returned to investors holding the shortest maturity class. Investors holding the
longer maturity classes receive principal only after the first class has been
retired. An investor is partially protected against a sooner than desired return
of principal by the sequential payments. The prices of certain CMOs, depending
on their structure and the rate of prepayments, can be volatile. Some CMOs may
also not be as liquid as other securities.

     In a typical CMO transaction, a corporation issues multiple series, (e.g.,
A, B, C, Z) of CMO bonds ("Bonds"). Proceeds of the Bond offering are used to
purchase mortgages or mortgage pass-through certificates ("Collateral"). The
Collateral is pledged to a trustee as security for the Bonds. Principal and
interest payments from the Collateral are used to pay principal on the Bonds in
the order A, B, C, Z. The Series A, B, and C bonds all pay interest currently.
Interest on the Series Z Bond is accrued and added to principal and a like
amount is paid as principal on the Series A, B, or C Bond currently being paid
off. When the Series A, B, and C Bonds are paid in full, interest and principal
on the Series Z Bond begins to be paid currently. With some CMOs, the issuer
serves as a conduit to allow loan originators (primarily builders or savings and
loan associations) to borrow against their loan portfolios.

     A Fund will invest only in those CMOs whose characteristics and terms are
consistent with the average maturity and market risk profile of the other fixed
income securities held by the Fund.

Other Mortgage-Backed Securities

     The Adviser expects that governmental, government-related or private
entities may create mortgage loan pools and other mortgage-related securities
offering mortgage pass-through and mortgage-collateralized investment in
addition to those described above. The mortgages underlying these securities may
include alternative mortgage instruments; that is, mortgage instruments whose
principal or interest payments may vary or whose terms to maturity may differ
from customary long-term fixed rate mortgages. As new types of mortgage-related
securities are developed and offered to investors, the Adviser will, consistent
with a Fund's investment objective, policies and quality standards, consider
making investments in such new types of mortgage-related securities.

Other Asset-Backed Securities

     The securitization techniques used to develop mortgage-backed securities
are being applied to a broad range of assets. Through the use of trusts and
special purpose corporations, various types of assets, including automobile
loans, computer leases and credit card and other types of receivables, are being
securitized in pass-through structures similar to mortgage pass-through
structures described above or in a structure similar to the CMO structure.
Consistent with a Fund's investment objectives and policies, the Fund may invest
in these and other types of asset-backed securities that may be developed in the
future. In general, the collateral supporting these securities is of shorter
maturity than mortgage loans and is less likely to experience substantial
prepayments with interest rate fluctuations.

     These other asset-backed securities present certain risks that are not
presented by mortgage-backed securities. Primarily, these securities may not
have the benefit of any security interest in the related assets. Credit card
receivables are generally unsecured and the debtors are entitled to the
protection of state and federal consumer credit laws, many of which give debtors
the right to set off certain amounts owed on the credit cards, thereby reducing
the balance due. There is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on these
securities.

     Asset-backed securities are often backed by a pool of assets representing
the obligations of a number of direct parties. To reduce the effect of failures
by obligors on underlying assets to make payments, the securities may contain
elements of credit support which fall into two categories: (i) liquidity
protection and (ii) protection against losses resulting from ultimate default by
an obligor or the underlying assets. Liquidity protection refers to the making
of advances, generally by the entity administering the pool of assets, to ensure
that the receipt of payments on the underlying pool occurs in a timely fashion.
Protection against losses results from payment of the insurance obligations on
at least a portion of the assets in the pool. This protection may be provided
through guarantee policies or letters of credit obtained by the issuer or
sponsor from third parties, through various means of structuring the transaction
or through a combination of such approaches. The Fund will not pay any
additional or separate fees for credit support. The degree of credit support
provided for each issue is generally based on historical information respecting
the level of credit risk associated with the underlying assets. Delinquency or
loss in excess of that anticipated, or failure of the credit support could
adversely affect the return on an investment in such a security.

Floating or Variable Rate Securities

     Floating or variable rate securities have interest rates that periodically
change according to the rise and fall of a specified interest rate index or a
specific fixed-income security that is used as a benchmark. The interest rate
typically changes every six months, but for some securities the rate may
fluctuate weekly, monthly, or quarterly. The index used is often the rate for
90- or 180-day Treasury Bills. Variable-rate and floating-rate securities may
have interest rate ceilings or caps that fix the interest rate on such a
security if, for example, a specified index exceeds a predetermined interest
rate. If an interest rate on a security held by the Fund becomes fixed as a
result of a ceiling or cap provision, the interest income received by the Fund
will be limited by the rate of the ceiling or cap. In addition, the principal
values of these types of securities will be adversely affected if market
interest rates continue to exceed the ceiling or cap rate.

Loan Transactions

     Loan transactions involve the lending of securities to a broker-dealer or
institutional investor for its use in connection with short sales, arbitrage, or
other securities transactions. If made, loans of portfolio securities by a Fund
will be in conformity with applicable federal and state rules and regulations.
The purpose of a qualified loan transaction is to afford a Fund the opportunity
to continue to earn income on the securities loaned and at the same time to earn
income on the collateral held by it.

     It is the view of the Staff of the Securities and Exchange Commission
("SEC") that a Fund is permitted to engage in loan transactions only if the
following conditions are met: (1) the Fund must receive at least 100 percent
collateral in the form of cash or cash equivalents, e.g., U.S. Treasury bills or
notes, or an irrevocable letter of credit; (2) the borrower must increase the
collateral whenever the market value of the securities loaned (determined on a
daily basis) rises above the level of the collateral; (3) the Fund must be able
to terminate the loan, after notice, at any time; (4) the Fund must receive
reasonable interest on the loan or a flat fee from the borrower, as well as
amounts equivalent to any dividends, interest, or other distributions on the
securities loaned and any increase in market value; (5) the Fund may pay only
reasonable custodian fees in connection with the loan; (6) voting rights on the
securities loaned may pass to the borrower; however, if a material event
affecting the investment occurs, the Board of Directors must be able to
terminate the loan and vote proxies or enter into an alternative arrangement
with the borrower to enable the Board to vote proxies. Excluding items (1) and
(2), these practices may be amended from time to time as regulatory provisions
permit.

     While there may be delays in recovery of loaned securities or even a loss
of rights in collateral supplied if the borrower fails financially, loans will
be made only to firms deemed by the Adviser to be of good standing and will not
be made unless, in the judgment of the Adviser, the consideration to be earned
from such loans would justify the risk.

Options and Financial Futures Transactions

     Certain Funds may invest up to 5 percent of their net assets in premiums on
put and call exchange-traded options. A call option gives the holder (buyer) the
right to purchase a security at a specified price (the exercise price) at any
time until a certain date (the expiration date). A put option gives the buyer
the right to sell a security at the exercise price at any time until the
expiration date. The Fund may also purchase options on securities indices.
Options on securities indices are similar to options on a security except that,
rather than the right to take or make delivery of a security at a specified
price, an option on a securities index gives the holder the right to receive, on
exercise of the option, an amount of cash if the closing level of the securities
index on which the option is based is greater than, in the case of a call, or
less than, in the case of a put, the exercise price of the option. A Fund may
enter into closing transactions, exercise its options, or permit the options to
expire.

     A Fund may also write call options, but only if such options are covered. A
call option is covered if written on a security a Fund owns or if the Fund has
an absolute and immediate right to acquire that security without additional cash
consideration upon conversion or exchange of other securities held by the Fund.
If additional cash consideration is required, that amount must be held in a
segregated account by the Fund's custodian bank. A call option on a securities
index is covered if the Fund owns securities whose price changes, in the opinion
of the Adviser, are expected to be substantially similar to those of the index.
A call option may also be covered in any other manner in accordance with the
rules of the exchange upon which the option is traded and applicable laws and
regulations. Each Fund that is permitted to engage in option transactions may
write such options on up to 25 percent of its net assets.

     Financial futures contracts, including interest rate futures transactions,
are commodity contracts that obligate the long or short holder to take or make
delivery of a specified quantity of a financial instrument, such as a security
or the cash value of a securities index, during a specified future period at a
specified price. The investment restrictions for the Funds permitted to engage
in financial futures transactions do not limit the percentage of the Fund's
assets that may be invested in financial futures transactions. None of the
Funds, however, intend to enter into financial futures transactions for which
the aggregate initial margin exceeds 5 percent of the net assets of the Fund
after taking into account unrealized profits and unrealized losses on any such
transactions it has entered into. A Fund may engage in futures transactions only
on commodities exchanges or boards of trade.

     A Fund will not engage in transactions in index options, financial futures
contracts, or related options for speculation. A Fund may engage in these
transactions only as an attempt to hedge against market conditions affecting the
values of securities that the Fund owns or intends to purchase. When a Fund
purchases a put on a stock index or on a stock index future not held by the
Fund, the put protects the Fund against a decline in the value of all securities
held by it to the extent that the stock index moves in a similar pattern to the
prices of the securities held. The correlation, however, between indices and
price movements of the securities in which a Fund will generally invest may be
imperfect. It is expected, nonetheless, that the use of put options that relate
to such indices will, in certain circumstances, protect against declines in
values of specific portfolio securities or the Fund's portfolio generally.
Although the purchase of a put option may partially protect a Fund from a
decline in the value of a particular security or its portfolio generally, the
cost of a put will reduce the potential return on the security or the portfolio
if either increases in value.

     Upon entering into a futures contract, a Fund will be required to deposit
with its custodian in a segregated account cash, certain U.S. Government
securities, or any other portfolio assets as permitted by the SEC's rules and
regulations in an amount known as the "initial margin." This amount, which is
subject to change, is in the nature of a performance bond or a good faith
deposit on the contract and would be returned to the Fund upon termination of
the futures contract, assuming all contractual obligations have been satisfied.

     The principal risks of options and futures transactions are: (a) possible
imperfect correlation between movements in the prices of options, currencies, or
futures contracts and movements in the prices of the securities or currencies
hedged or used for cover; (b) lack of assurance that a liquid secondary market
will exist for any particular options or futures contract when needed; (c) the
need for additional skills and techniques beyond those required for normal
portfolio management; (d) losses on futures contracts resulting from market
defer closing out certain options or futures contracts to continue to qualify
for beneficial tax treatment afforded "regulated investment companies" under the
Internal Revenue Code of 1986, as amended (the "Code").

Foreign Equity Securities

     Foreign equity securities include common stock and preferred stock,
including securities convertible into equity securities, issued by foreign
companies, American Depositary Receipts ("ADRs") and Global Depositary Receipts
("GDRs"). In determining whether a company is foreign, the Adviser will consider
various factors including where the company is headquartered, where the
company's principal operations are located, where the company's revenues are
derived, where the principal trading market is located and the country in which
the company was legally organized. The weight given to each of these factors
will vary depending upon the circumstances.

     Foreign equity securities, which are generally denominated in foreign
currencies, involve risks not typically associated with investing in domestic
securities. Foreign securities may be subject to foreign taxes that would reduce
their effective yield. Certain foreign governments levy withholding taxes
against dividend and interest income. Although in some countries a portion of
these taxes is recoverable, the unrecovered portion of any foreign withholding
taxes would reduce the income a Fund receives from its foreign investments.

     Foreign investments involve other risks, including possible political or
economic instability of the country of the issuer, the difficulty of predicting
international trade patterns, and the possibility of currency exchange controls.
Foreign securities may also be subject to greater fluctuations in price than
domestic securities. There may be less publicly available information about a
foreign company than about a domestic company. Foreign companies generally are
not subject to uniform accounting, auditing, and financial reporting standards
comparable to those of domestic companies.

     There is generally less government regulation of stock exchanges, brokers,
and listed companies abroad than in the United States. In addition, with respect
to certain foreign countries, there is a possibility of the adoption of a policy
to withhold dividends at the source, or of expropriation, nationalization,
confiscatory taxation, or diplomatic developments that could affect investments
in those countries. Finally, in the event of default on a foreign debt
obligation, it may be more difficult for a Fund to obtain or enforce a judgement
against the issuers of the obligation. The Funds will normally execute their
portfolio securities transactions on the principal stock exchange on which the
security is traded.

     The considerations noted above regarding the risk of investing in foreign
securities are generally more significant for investments in emerging or
developing countries, such as countries in Eastern Europe, Latin America, South
America or Southeast Asia. These countries may have relatively unstable
governments and securities markets in which only a small number of securities
trade. Markets of developing or emerging countries may generally be more
volatile than markets of developed countries. Investment in these markets may
involve significantly greater risks, as well as the potential for greater gains.

     ADRs in registered form are dollar-denominated securities designed for use
in the U.S. securities markets. ADRs are sponsored and issued by domestic banks
and represent and may be converted into underlying foreign securities deposited
with the domestic bank or a correspondent bank. ADRs do not eliminate the risks
inherent in investing in the securities of foreign issuers. By investing in ADRs
rather than directly in the foreign security, however, a Fund may avoid currency
risks during the settlement period for either purchases or sales. There is a
large, liquid market in the United States for most ADRs. GDRs are receipts
representing an arrangement with a major foreign bank similar to that for ADRs.
GDRs are not necessarily denominated in the currency of the underlying security.

     Additional costs may be incurred in connection with a Fund's foreign
investments. Foreign brokerage commissions are generally higher than those in
the United States. Expenses may also be incurred on currency conversions when a
Fund moves investments from one country to another. Increased custodian costs as
well as administrative difficulties may be experienced in connection with
maintaining assets in foreign jurisdictions.

Foreign Fixed Income Securities

     Foreign fixed income securities include debt securities of foreign
corporate issuers, certain foreign bank obligations (see "Bank Obligations"),
obligations of foreign governments or their subdivisions, agencies and
instrumentalities, and obligations of supranational entities such as the World
Bank, the European Investment Bank, and the Asian Development Bank. Any of these
securities may be denominated in foreign currency or U.S. dollars, or may be
traded in U.S. dollars in the United States although the underlying security is
usually denominated in a foreign currency.

     The risk of investing in foreign fixed income securities are the same as
the risks of investing in foreign equity securities. Additionally, investment in
sovereign debt (debt issued by governments and their agencies and
instrumentality) can involve a high degree of risk. The governmental entity that
controls the repayment of sovereign debt may not be available or willing to
repay the principal and/or interest when due in accordance with the terms of the
debt. A governmental entity's willingness or ability to repay principal and
interest due in a timely manner may be affected by, among other factors, its
cash flow situation, the extent of its foreign reserves, the availability of
sufficient foreign exchange on the date a payment is due, the relative size of
the debt service burden to the economy as a whole, the governmental entity's
policy toward the International Monetary Fund, and the political constraints to
which a governmental entity may be subject. Governmental entities may also
depend on expected disbursements from foreign governments, multilateral agencies
and others to reduce principal and interest arrearages on their debt. The
commitment on the part of these governments, agencies and others to make such
disbursements may be conditioned on a governmental entity's implementation of
economic reforms and/or economic performance and the timely service of such
debtor's obligations. Failure to implement such reforms, achieve such levels of
economic performance or repay principal or interest when due may result in the
cancellation of such third parties' commitments to lend funds to the
governmental entity, which may further impair such debtor's ability or
willingness to service its debts in a timely manner. Consequently, governmental
entities may default on their sovereign debt. Holders of sovereign debt
(including the Funds) may be requested to participate in the rescheduling of
such debt and to the extend further loans to governmental entities. There is no
bankruptcy proceeding by which sovereign debt on which governmental entities
have defaulted may be collected in whole or in part.

Currency Contracts

     The value of a Fund invested in foreign securities will fluctuate as a
result of changes in the exchange rates between the U.S. dollar and the
currencies in which the foreign securities or bank deposits held by the Fund are
denominated. To reduce or limit exposure to changes in currency exchange rates
(referred to as "hedging"), a Fund may enter into forward currency exchange
contracts that, in effect, lock in a rate of exchange during the period of the
forward contracts. Forward contracts are usually entered into with currency
traders, are not traded on securities exchanges, and usually have a term of less
than one year, but can be renewed. A default on a contract would deprive a Fund
of unrealized profits or force a Fund to cover its commitments for purchase or
sale of currency, if any, at the market price. A Fund will enter into forward
contracts only for hedging purposes and not for speculation. If required by the
Investment Company Act or the SEC, a Fund may "cover" its commitment under
forward contracts by segregating cash or liquid securities with a Fund's
custodian in an amount not less than the current value of the Fund's total
assets committed to the consummation of the contracts. Under normal market
conditions, no more than 25 percent of the International Stock Fund's assets may
be committed to the consummation of currency exchange contracts.

     A Fund may also purchase or sell foreign currencies on a "spot" (cash)
basis or on a forward basis to lock in the U.S. dollar value of a transaction at
the exchange rate or rates then prevailing. A Fund will use this hedging
technique in an attempt to insulate itself against possible losses resulting
from a change in the relationship between the U.S. dollar and the relevant
foreign currency during the period between the date a security is purchased or
sold and the date on which payment is made or received.

     Hedging against adverse changes in exchange rates will not eliminate
fluctuation in the prices of a Fund's portfolio securities or prevent loss if
the prices of those securities decline. In addition, the use of forward
contracts may limit potential gains from an appreciation in the U.S. dollar
value of a foreign currency. Forecasting short-term currency market movements is
very difficult, and there is no assurance that short-term hedging strategies
used by a Fund will be successful.

Real Estate Investment Trusts ("REITs")

     REITs are pooled investment vehicles that invest primarily in real
estate-such as shopping centers, malls, multi-family housing, or commercial
property, or real-estate related loans such as mortgages. Investing in REITs
involves unique risks and may be affected by changes in the value of the
underlying property owned by the REIT or affected by the quality of the credit
extended. REITs are significantly affected by the market for real estate and are
subject to many of the same risks associated with direct ownership in real
estate. Furthermore, REITs are dependent upon management skills and subject to
heavy cash flow dependency.

Repurchase Agreements

     A Fund may invest in repurchase agreements, which are agreements by which
the Fund purchases a security and simultaneously commits to resell that security
to the seller (a commercial bank or securities dealer) at a stated price within
a number of days (usually not more than seven) from the date of purchase. The
resale price reflects the purchase price plus a rate of interest that is
unrelated to the coupon rate or maturity of the purchased security. Repurchase
agreements may be considered loans by the Fund collateralized by the underlying
security. The obligation of the seller to pay the stated price is in effect
secured by the underlying security. The seller will be required to maintain the
value of the collateral underlying any repurchase agreement at a level at least
equal to the price of the repurchase agreement. In the case of default by the
seller, the Fund could incur a loss. In the event of a bankruptcy proceeding
commenced against the seller, the Fund may incur costs and delays in realizing
upon the collateral. A Fund will enter into repurchase agreements only with
those banks or securities dealers who are deemed creditworthy pursuant to
criteria adopted by the Adviser. There is no limit on the portion of a Fund's
assets that may be invested in repurchase agreements with maturities of seven
days or less.

Borrowing

     A Fund may borrow from a bank for temporary administrative purposes. This
borrowing may be unsecured. Provisions of the Investment Company Act of 1940, as
amended (the "1940 Act") require a Fund to maintain continuous asset coverage
(that is, total assets including borrowings, less liabilities exclusive of
borrowings) of 300 percent of the amount borrowed, with an exception for
borrowings not in excess of 5 percent of the Fund's total assets made for
temporary administrative purposes. Any borrowings for temporary administrative
purposes in excess of 5 percent of a Fund's total assets are subject to
continuous asset coverage. If the 300 percent asset coverage declines as a
result of market fluctuations or other reasons, a Fund may be required to sell
some of its portfolio holdings within three days to reduce the debt and restore
the 300 percent asset sell securities at that time. Notwithstanding the above,
certain of the Funds may not borrow in excess of 5 percent of their assets at
any time. As previously noted, a Fund also may enter into certain transactions,
including reverse repurchase agreements, mortgage dollar rolls, and
sale-buybacks, that can be viewed as constituting a form of borrowing or
financing transaction by the Fund. To the extent a Fund covers its commitment
under such transactions (or economically similar transaction) by the segregation
of assets determined in accordance with procedures adopted by the Board of
Directors, equal in value to the amount of the Fund's commitment to repurchase,
such an agreement will not be considered a "senior security" by the Fund and
therefore will not be subject to the 300 percent asset coverage requirement
otherwise applicable to borrowings by the Fund. Borrowing will tend to
exaggerate the effect on net asset value of any increase or decrease in the
market value of a Fund's portfolio. Money borrowed will be subject to interest
costs which may or may not be recovered by appreciation of the securities
purchased. A Fund also may be required to maintain minimum average balances in
connection with such borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of
borrowing over the stated interest rate.

Illiquid Securities

     Illiquid securities are securities that may not be sold or disposed of in
the ordinary course of business within seven days at approximately the price
used to determine the Fund's net asset value. Under current interpretations of
the Staff of the SEC, the following instruments in which a Fund may invest will
be considered illiquid: (1) repurchase agreements maturing in more than seven
days; (2) restricted securities (securities whose public resale is subject to
legal restrictions, except as described in the following paragraph); (3)
options, with respect to specific securities, not traded on a national
securities exchange that are not readily marketable; and (4) any other
securities in which a Fund may invest that are not readily marketable.

     Notwithstanding the restrictions applicable to investments in illiquid
securities described in the relevant chart below, the Funds may purchase without
limit certain restricted securities that can be resold to qualifying
institutions pursuant to a regulatory exemption under Rule 144A ("Rule 144A
securities"). If a dealer or institutional trading market exists for Rule 144A
securities, such securities are deemed to be liquid and thus exempt from that
Fund's liquidity restrictions.

     Under the supervision of the Board of Directors of the Funds, the Adviser
determines the liquidity of the Funds' portfolio securities, including Rule 144A
securities, and, through reports from the Adviser, the Board of Directors
monitor trading activity in these securities. In reaching liquidity decisions,
the Adviser will consider, among other things, the following factors: (1) the
frequency of trades and quotes for the security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the procedures for
the transfer). If institutional trading in Rule 144A securities declines, a
Fund's liquidity could be adversely affected to the extent it is invested in
such securities.

Convertible Securities and Warrants

     Convertible debentures are interest-bearing debt securities, typically
unsecured, that represent an obligation of the corporation providing the owner
with claims to the corporation's earnings and assets before common and preferred
stock owners, generally on par with unsecured creditors. If unsecured, claims of
convertible debenture owners would be inferior to claims of secured debt
holders. Convertible preferred stocks are securities that represent an ownership
interest in a corporation providing the owner with claims to the corporation's
earnings and assets before common stock owners, but after bond owners.
Investments by a Fund in convertible debentures or convertible preferred stock
would be a substitute for an investment in the convertible security is available
in quantities necessary to satisfy the Fund's investment needs (for example, in
the case of a new issuance of convertible securities) or where, because of
financial market conditions, the conversion price of the convertible security is
comparable to the price of the underlying common stock, in which case a
preferred position with respect to the corporation's earnings and assets may be
preferable to holding common stock.

     Warrants are options to buy a stated number of underlying securities at a
specified price any time during the life of the warrants. The securities
underlying these warrants will be the same types of securities that a Fund will
invest in to achieve its investment objective of capital appreciation. The
purchaser of a warrant expects the market price of the underlying security will
exceed the purchase price of the warrant plus the exercise price of the warrant,
thus resulting in a profit. If the market price never exceeds the purchase price
plus the exercise price of the warrant before the expiration date of the
warrant, the purchaser will suffer a loss equal to the purchase price of the
warrant.

     To the extent the High Yield Fund or the Fixed Income Securities Fund
acquires common stock through exercise of conversion rights or warrants or
acceptance of exchange or similar offers, the common stock will not be retained
in the portfolio. Orderly disposition of these equity securities will be made
consistent with management's judgment as to the best obtainable price.

Investments in Small and Unseasoned Companies

     Unseasoned and small companies may have limited or unprofitable operating
histories, limited financial resources, and inexperienced management. In
addition, they often face competition from larger or more established firms that
have greater resources. Securities of small and unseasoned companies are
frequently traded in the over-the-counter market or on regional exchanges where
low trading volumes may result in erratic or abrupt price movements. To dispose
of these securities, a Fund may need to sell them over an extended period or
below the original purchase price. Investments by a Fund in these small or
unseasoned companies may be regarded as speculative.

Dollar Roll Transactions

     "Dollar roll" transactions consist of the sale by a Fund to a bank or
broker-dealer (the "counterparty") of GNMA certificates or other mortgage-backed
securities together with a commitment to purchase from the counterparty similar,
but not identical, securities at a future date and at agreed price. The
counterparty receives all principal and interest payments, including
prepayments, made on the security while it is the holder. The Fund receives a
fee from the counterparty as consideration for entering into the commitment to
purchase. Dollar rolls may be renewed over a period of several months with a new
purchase and repurchase price fixed and a cash settlement made at each renewal
without physical delivery of securities. Moreover, the transaction may be
preceded by a firm commitment agreement pursuant to which the Fund agrees to buy
a security on a future date.

     A Fund will not use such transactions for leveraging purposes and,
accordingly, will segregate liquid assets in an amount sufficient to meet their
purchase obligations under the transactions. The Funds will also maintain asset
coverage of at least 300 percent for all outstanding firm commitments, dollar
rolls and other borrowings.

     Dollar rolls may be treated for purposes of the 1940 Act as borrowings of
the Fund because they involve the sale of a security coupled with an agreement
to repurchase. Like all borrowings, a dollar roll involves costs to the Fund.
For example, while a Fund receives a fee as consideration for agreeing to
repurchase the security, the Fund foregoes the right to receive all principal
and interest payments while the counterparty holds the security. These payments
received by the counterparty may exceed the fee received by the Fund, thereby
effectively charging the Fund interest on its borrowing. Further, although the
Fund can estimate the amount of expected principal prepayment over the term of
the dollar roll, a variation in the actual amount of prepayment could increase
or decease the cost of the Fund's borrowing.

When-Issued Securities

     When-issued, delayed-delivery and forward transactions generally involve
the purchase of a security with payment and delivery in the future (i.e., beyond
normal settlement). A Fund does not earn interest on such securities until
settlement and bears the risk of market value fluctuations in between the
purchase and settlement dates. New issues of stocks and bonds, private
placements and U.S. Government securities may be sold in this manner. To the
extent a Fund engages in when-issued and delayed-delivery transactions, it will
do so to acquire portfolio securities consistent with its investment objectives
and policies and not for investment leverage. A Fund may use spot and forward
currency exchange transactions to reduce the risk associated with fluctuations
in exchange rates when securities are purchased or sold on a when-issued or
delayed delivery basis.

Zero-Coupon and Pay-in-Kind Securities

     A zero-coupon security has no cash coupon payments. Instead, the issuer
sells the security at a substantial discount from its maturity value. The
interest equivalent received by the investor from holding this security to
maturity is the difference between the maturity value and the purchase price.
Pay-in-kind securities are securities that pay interest in either cash or
additional securities, at the issuer's option, for a specified period. The price
of pay-in-kind securities is expected to reflect the market value of the
underlying accrued interest, since the last payment. Zero-coupon and pay-in-kind
securities are more volatile than cash pay securities. The Fund accrues income
on these securities prior to the receipt of cash payments. The Fund intends to
distribute substantially all of its income to its shareholders to qualify for
pass-through treatment under the tax laws and may, therefore, need to use its
cash reserves to satisfy distribution requirements.

Temporary Investments

     When, as a result of market conditions, the Adviser determines a temporary
defensive position is warranted to help preserve capital, a Fund may without
limit temporarily retain cash, or invest in prime commercial paper, high-grade
debt securities, securities of the U.S. Government and its agencies and
instrumentalities, and high-quality money market instruments, including
repurchase agreements. The International Stock Fund may invest in such
securities issued by entities organized in the United States or any foreign
country, denominated in U.S. dollars or foreign currency. When a Fund assumes a
temporary defensive position, it is not invested in securities designed to
achieve its investment objective.

Non-Diversified

     The Oregon Municipal Bond Fund and the Technology Fund are
"non-diversified," which means that they may invest a greater percentage of
their assets in the securities of a single issuer than the other Funds.
Non-diversified funds are more susceptible to risks associated with a single
economic, political, or regulatory occurrence than a more diversified portfolio
might be. Some of those issuers also may present substantial credit or other
risks. Similarly, the Oregon Municipal Bond Fund may be more sensitive to
adverse economic, business or political developments in the State of Oregon and
also if it invests a substantial portion of its assets in the bonds of similar
projects.



                                   Chart of Securities and Investment Practices

                                             CCSF        CGF        CISF      CSF         CSCF      CREF       CTF        CSVF

                                                                                                  
Investment Grade Securities (Baa or higher   *           *          *         *           *         *          *          *
by Moody's, BBB or higher by S&P or
believed by the Adviser to be equivalent),
other than U.S. Government obligations and
municipal securities
Non-Investment Grade Securities              NA          NA         NA        NA          NA        NA         NA         NA
Domestic Bank Obligations                    *           *          *         *           *         *          *          *
U.S. Government Securities                   *           *          *         *           *         *          *          *
Mortgage-Backed Securities                   NA          NA         NA        NA          NA        NA         NA         NA
CMOs                                         NA          NA         NA        NA          NA        NA         NA         NA
Asset-Backed Securities                      NA          NA         NA        NA          NA        NA         NA         NA
Floating or Variable Rate                    NA          NA         NA        NA          NA        NA         NA         NA
Loan Transactions                            X           X          X         X           O         O          O          O
Options & Financial Futures                  O           O          O         O           O         O          O          O
Foreign Equities
   Developed Countries                       33.3%, O    10%, O     +         33.3%, O    25%, O    20%, O     25%, O     25%, +
   Emerging Countries                        X           X          +         X           X         X          X          O
ADRs                                         33.3%, O    10%, O     +         33.3%, O    25%, O    X          25%, O     25%, O
Currency Contracts
   Hedging                                   O           O          25%, +    O           O         O          O          O
   Speculation                               X           X          X         X           X         X          X          X
   Spot Basis                                O           O          +         O           O         O          O          O
Repurchase Agreements                        *           *          *         *           *         *          *          *
Illiquid (exclude 144A securities from       15%, O      15%, O     15%, O    15%, O      15%, O    15%, O     15%, O     15%, O
definition of illiquid with board
supervision)
Convertible Securities/Warrants              O           O          O         +           +         +          +          +
Unseasoned/less than three years             5%, O       5%, O      5%, O     10%, +      10%, +    5%, +      10%, O     10%, O
operating history
Small Companies                              O           O          O         +           +         +          +          +
Dollar Roll Transactions                     NA          NA         NA        NA          NA        NA         NA         NA
When-Issued Securities                       O           O          O         O           O         O          O          O
Foreign Fixed Income Securities              NA          NA         O         NA          NA        NA         NA         NA
(including Foreign Bank Obligations)
Zero Coupon/Pay in Kind                      NA          NA         NA        NA          NA        NA         NA         NA
Real Estate (excluding REITs)                X           X          X         X           X         X          X          X
REITs                                        +           +          O         +           +         +          O          +
Borrowing                                    5%, *       5%, *      33.3%, *  5%, *       5%, *     5%,        33.3%,     33.3%, *
                                                                                                    *          *

+  Permitted - Part of principal investment strategy
X  Not permitted/Fundamental Policy
O  Permitted - Not a principal investment strategy
*  Temporary Investment or cash management purposes
%  Percentage of total or net assets that Fund may invest
NA Not part of investment strategy





                                               CSTB        CFIS       CMBF         CNMF     CHYF        CBF        CDIC

                                                                                              
Investment Grade Securities (Baa or            +           +          O           O         O           +          NA
higher by Moody's, BBB or higher by
S&P or believed by the Adviser to be
equivalent), other than U.S.
Government obligations and municipal
securities
Non-Investment Grade Securities                10%, O      10%, O     NA          NA        +           10%, O     NA
Domestic Bank Obligations                      *           *          *           *         *           *          +
Commercial Paper                               *           *          *           *         *           *          +
U.S. Government Securities                     +           +          *           *         *           +          +
Mortgage-Backed Securities                     +           +          NA          NA        O           +          NA
CMOs                                           +           +          NA          NA        O           +          NA
Asset-Backed Securities                        +           +          NA          NA        O           +          NA
Floating or Variable Rate                      +           +          NA          NA        O           +          NA
Loan Transactions                              O           O          O           X         O           X          X
Options & Financial Futures                    O           X          X           X         O           O          X
Foreign Equities
   Developed Countries                         NA          NA         NA          NA        NA           33.3%, O  NA
   Emerging Countries                          NA          NA         NA          NA        NA          X          NA
ADRs                                           NA          NA         NA          NA        NA           33.3%, O  NA
Currency Contracts
   Hedging                                     NA          NA         NA          NA        NA          O          NA
   Speculation                                 NA          NA         NA          NA        NA          X          NA
   Spot Basis                                  NA          NA         NA          NA        NA          O          NA
Repurchase Agreements                          *           *          *           *         *           *          *
Illiquid (excludes 144A securities from        15%, O      15%, O     15%, O      15%, O    15%, O      15%, O     10%, O
definition of illiquid with board
supervision)
Convertible Securities/Warrants                O           O          NA          NA        O           O          NA
Unseasoned/less than three years               5%, O       5%, O      NA          NA        5%, +       5%, O      NA
operating history
Small Companies                                NA          NA         NA          NA        +           O          NA
Dollar Roll Transactions                       O           O          NA          NA        O           O          NA
When-Issued Securities                         O           O          O           O         O           O          O
Foreign Fixed Income Securities                20%, O      20%, O     NA          NA        10%, O      20%, O     NA
(including Foreign Bank Obligations)
Zero Coupon/Pay in Kind                        O           O          +           +         O           O          NA
Real Estate (excluding REITs)                  X           X          X           X         X           X          X
REITs                                          O           O          NA          NA        O           O          NA
Borrowing                                      33.3%, *    5%,        33.3%,      33.3%, *  5%, *       5%, *      33.3%, *
                                                           *          *
Municipal Bonds                                O           O          +           +         NA          O          NA


+  Permitted - Part of principal investment strategy
X  Fundamental policy/not permitted
O  Permitted - Not a principal investment strategy
*  Temporary Investment or cash management purposes
%  Percentage of total or net assets that Fund may invest
NA Not part of investment strategy



- --------------------------------------------------------------------------------
                             INVESTMENT RESTRICTIONS
- --------------------------------------------------------------------------------

     The Prospectus sets forth the investment goals and principal investment
strategies applicable to each Fund. The following is a list of investment
restrictions applicable to each Fund. If a percentage limitation is adhered to
at the time of an investment by a Fund, a later increase or decrease in
percentage resulting from any change in value or net assets will not result in a
violation of the restriction. Except as stated otherwise below, a Fund may not
change these restrictions without the approval of a majority of its
shareholders, which means the vote at any meeting of shareholders of a Fund of
(i) 67 percent or more of the shares present or represented by proxy at the
meeting (if the holders of more than 50 percent of the outstanding shares are
present or represented by proxy) or (ii) more than 50 percent of the outstanding
shares, whichever is less.

COLUMBIA COMMON STOCK FUND, INC.

The Common Stock Fund may not:

     1. Buy or sell commodities. However, the Fund may invest in futures
contracts relating to broadly based stock indices, subject to the restrictions
in paragraph 15.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies, such as real estate investment
trusts, which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the outstanding voting securities of
that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of the
Fund at market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and instrumentalities), with
reference to 75 percent of the assets of the Fund.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks and for extraordinary or emergency
purposes.

     10. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 5 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     11. Invest in companies for the purpose of exercising control or
management.

     12. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no more
than 5 percent of the value of the Fund's net assets taken at market may, at any
time, be held as collateral for such sales.

     13. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a national securities association
or are listed on a national securities or commodities exchange.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA GROWTH FUND, INC.

The Growth Fund may not:

     1. Buy or sell commodities or commodity contracts.

     2. Concentrate more than 25 percent of its investments in any one industry.

     3. Buy or sell real estate. (However, the Fund may buy readily marketable
securities such as real estate investment trusts.)

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase securities of any issuer when those officers and directors of
the Fund who individually own 1/2 of 1 percent of the securities of that issuer
together own 5 percent or more.

     6. Issue senior securities, bonds, or debentures.

     7. Underwrite securities issued by others except as it may be deemed to be
an underwriter of restricted securities.

     8. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks for extraordinary or emergency
purposes.

     9. Invest more than 5 percent of its total assets at cost in the securities
of companies which (with predecessor companies) have a record of less than three
years continuous operation and equity securities which are not readily
marketable.

     10. Invest in companies for purposes of control or management.

     11. Buy securities on margin or make short sales.

     12. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA INTERNATIONAL STOCK FUND, INC.

The International Stock Fund may not:

     1. Buy or sell commodities. However, the Fund may invest in futures
contracts or options on such contracts relating to broadly based stock indices,
subject to the restrictions in paragraph 15, and may enter into foreign currency
transactions.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of its assets in any one industry and (b)
invest for temporary defensive purposes up to 100 percent of the value of its
assets in securities issued or guaranteed by the United States or its agencies
or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies, such as real estate investment
trusts, which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held by the Fund.

     6. Purchase the securities of any issuer (including any foreign government
issuer) if the purchase, at the time thereof, would cause more than 5 percent of
the value of the total assets of the Fund at market value to be invested in the
securities of that issuer (other than obligations of the U.S. Government and its
agencies and instrumentalities), with reference to 75 percent of the assets of
the Fund.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money, except temporarily for extraordinary or emergency
purposes. For all amounts borrowed, the Fund will maintain an asset coverage of
300 percent. The Fund will not make any additional investments while borrowings
exceed 5 percent of the Fund's total assets.

     10. Invest its funds in the securities of any company if the purchase would
cause more than 5 percent of the value of the Fund's total assets to be invested
in companies which, including predecessors and parents, have a record of less
than three years continuous operation.

     11. Invest in companies for the purpose of exercising control or
management.

     12. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no more
than 5 percent of the value of the Fund's net assets taken at market may, at any
time, be held as collateral for such sales.

     13. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a recognized securities
association or are listed on a recognized securities or commodities exchange or
similar entity.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA SPECIAL FUND, INC.

The Special Fund may not:

     1. Buy or sell commodities. However, the Fund may invest in futures
contracts relating to broadly based stock indices, subject to the restrictions
in paragraph 15.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of the
Fund at market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and instrumentalities), with
reference to 75 percent of the assets of the Fund.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks and for extraordinary or emergency
purposes.

     10. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 10 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     11. Invest in companies for the purpose of exercising control or
management.

     12. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no more
than 10 percent of the value of the Fund's net assets taken at market may, at
any time, be held as collateral for such sales.

     13. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a national securities association
or are listed on a national securities or commodities exchange.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA SMALL CAP FUND, INC.

The Small Cap Fund may not:

     1. Buy or sell commodities. However, the Fund may invest in futures
contracts relating to broadly based stock indices, subject to the restrictions
in paragraph 15.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of the
Fund at market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and instrumentalities), with
reference to 75 percent of the assets of the Fund.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks and for extraordinary or emergency
purposes.

     10. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 10 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     11. Invest in companies for the purpose of exercising control or
management.

     12. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to securities held by the Fund. In any event, no
more than 10 percent of the value of the Fund's net assets taken at market may,
at any time, be held as collateral for such sales.

     13. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options or futures are offered through the facilities of a
national securities association or are listed on a national securities or
commodities exchange. The Fund may write call options that are covered in
accordance with rules established by the SEC.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA REAL ESTATE EQUITY FUND, INC.

The Real Estate Fund may not:

     1. Buy or sell commodities or commodity futures contracts.

     2. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies, such as real estate investment
trusts, that operate in real estate or interests therein, and participation
interests in pools of real estate mortgage loans.

     3. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     4. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of its total assets at
market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its instrumentalities), with reference to
75 percent of the assets of the Fund.

     6. Purchase or retain securities of an issuer if those officers or
directors of the Fund or the Adviser who individually own more than 1/2 of 1
percent of the outstanding securities of that issuer together own more than 5
percent of such securities.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money except as a temporary measure for extraordinary or
emergency purposes. The Fund's borrowings may not exceed 5 percent of its gross
assets valued at the lesser of cost or market value, nor may it pledge,
mortgage, or hypothecate assets if the market value of such assets exceeds 10
percent of the gross assets, valued at cost, of the Fund.

     10. Invest in the securities of any company if the purchase, at the time
thereof, would cause more than 5 percent of the value of the Fund's total assets
to be invested in companies which, including predecessors and parents, have a
record of less than three years continuous operation.

     11. Invest in companies to exercise control or management.

     12. Buy any securities or other property on margin, except for short-term
credits necessary for clearing transactions and except that margin payments and
other deposits in connection with transactions in options, futures, and forward
contracts shall not be deemed to constitute purchasing securities on margin.

     13. Engage in short sales of securities except to the extent that it owns
other securities convertible into an equivalent amount of such securities. These
short sales may only be made to protect a profit in or to attempt to minimize a
loss with respect to convertible securities. In any event, no more than 10
percent of the Fund's net assets valued at market may, at any time, be held as
collateral for such sales.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     15. Concentrate investments in any one industry, except that the Fund will
invest at least 65 percent of the value of its total assets in securities of
companies principally engaged in the real estate industry.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA TECHNOLOGY FUND, INC.

The Technology Fund may not:

     1. Buy or sell commodities or commodities contracts or oil, gas or mineral
programs, except that the Fund may purchase, sell or enter into financial
futures contracts and options on future contracts, foreign currency forward
contracts, foreign currency options, or any interest rate, securities-related or
foreign currency related hedging instrument, including swap agreements and other
derivative instruments, subject to compliance with any applicable provisions of
the federal securities or commodities laws.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     6. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that the Fund may (i) borrow from banks, but only
if immediately after each borrowing there is asset coverage of 300 percent, (ii)
enter into transactions in options futures, options on futures, and other
derivative instruments as described in the Prospectus and this Statement of
Additional Information (the deposit of assets in escrow in connection with the
writing of covered put and call options and the purchase of securities on a
when-issued or delayed delivery basis, collateral arrangements with respect to
initial or variation margin deposit for futures contracts and commitments
entered into under swap agreements or other derivative instruments, will not be
deemed to be pledges of the Fund's assets), (iii) enter into reverse repurchase
agreements, dollar roll transactions or economically similar transactions to the
extent its commitment under such transaction is covered by the segregation of
assets, and (iv) borrow money as a temporary measure for extraordinary or
emergency purposes provided that such borrowings do not exceed 5 percent of the
gross assets of the Fund valued at the lesser of cost or market value, and the
Fund does not pledge, mortgage, or hypothecate assets valued at market to an
extent greater than 10 percent of the gross assets valued at cost of the Fund.

     7. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 10 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     8. Invest in companies for the purpose of exercising control or management.

     9. Engage in short sales of securities except to the extent that it owns an
equal amount of the securities sold short or other securities convertible into
an equivalent amount of such securities ("short sales against the box"). Such
transactions may only be made to protect a profit in or to attempt to minimize a
loss with respect to convertible securities. In any event, no more than 10
percent of the value of the Fund's net assets taken at market may, at any time,
be held as collateral for such sales.

     10. Buy any securities or other property on margin except for use of
short-term credit necessary for clearance of purchases and sales of portfolio
securities, but the Fund may make margin deposits in connection with
transactions in options, futures, and options on futures or purchase or sell
puts or calls, or confirmations thereof.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA STRATEGIC VALUE FUND, INC.

The Strategic Value Fund may not:

     1. Buy or sell commodities or commodities contracts or oil, gas or mineral
programs, except that the Fund may purchase, sell or enter into financial
futures contracts and options on future contracts, foreign currency forward
contracts, foreign currency options, or any interest rate, securities-related or
foreign currency related hedging instrument, including swap agreements and other
derivative instruments, subject to compliance with any applicable provisions of
the federal securities or commodities laws.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of the
Fund at market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and instrumentalities), with
reference to 75 percent of the assets of the Fund.

     6. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     7. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that the Fund may (i) borrow from banks, but only
if immediately after each borrowing there is asset coverage of 300 percent, (ii)
enter into transactions in options futures, options on futures, and other
derivative instruments as described in the Prospectus and this Statement of
Additional Information (the deposit of assets in escrow in connection with the
writing of covered put and call options and the purchase of securities on a
when-issued or delayed delivery basis, collateral arrangements with respect to
initial or variation margin deposit for futures contracts and commitments
entered into under swap agreements or other derivative instruments, will not be
deemed to be pledges of the Fund's assets), (iii) enter into reverse repurchase
agreements, dollar roll transactions or economically similar transactions to the
extent its commitment under such transaction is covered by the segregation of
assets, and (iv) borrow money as a temporary measure for extraordinary or
emergency purposes provided that such borrowings do not exceed 5 percent of the
gross assets of the Fund valued at the lesser of cost or market value, and the
Fund does not pledge, mortgage, or hypothecate assets valued at market to an
extent greater than 10 percent of the gross assets valued at cost of the Fund.

     8. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 10 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     9. Invest in companies for the purpose of exercising control or management.

     10. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no more
than 10 percent of the value of the Fund's net assets taken at market may, at
any time, be held as collateral for such sales.

     11. Buy any securities or other property on margin except for use of
short-term credit necessary for clearance of purchases and sales of portfolio
securities, but the Fund may make margin deposits in connection with
transactions in options, futures, and options on futures or purchase or sell
puts or calls, or confirmations thereof.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA BALANCED FUND, INC.

The Balanced Fund may not:

     1. Buy or sell commodities. However, the Fund may invest in futures
contracts relating to broadly based stock indices, subject to the restrictions
in paragraph 15.

     2. Concentrate investments in any industry. However, the Fund may (a)
invest up to 25 percent of the value of the total assets in any one industry and
(b) invest for temporary defensive purposes up to 100 percent of the value of
the total assets in securities issued or guaranteed by the U.S. Government or
its agencies or instrumentalities.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the outstanding voting securities of
that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of the total assets of the
Fund at market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and instrumentalities), with
reference to 75 percent of the assets of the Fund.

     7. Issue senior securities, bonds, or debentures.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities under circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     9. Borrow money in excess of 5 percent of its net asset value. Any
borrowing must only be temporarily from banks and for extraordinary or emergency
purposes.

     10. Invest its funds in the securities of any company if the purchase, at
the time thereof, would cause more than 5 percent of the value of the Fund's
total assets to be invested in companies which, including predecessors and
parents, have a record of less than three years continuous operation.

     11. Invest in companies for the purpose of exercising control or
management.

     12. Engage in short sales of securities except to the extent that it owns
an equal amount of the securities sold short or other securities convertible
into an equivalent amount of such securities ("short sales against the box").
Such transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no more
than 5 percent of the value of the Fund's net assets taken at market may, at any
time, be held as collateral for such sales.

     13. Buy and sell puts and calls as securities, stock index futures or
options on stock index futures, or financial futures or options on financial
futures, unless such options are written by other persons and the options or
futures are offered through the facilities of a national securities association
or are listed on a national securities or commodities exchange.

     14. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA SHORT TERM BOND FUND, INC.

The Short Term Bond Fund may not:

     1. Issue senior securities, bonds, or debentures.

     2. Buy any securities or other property on margin except for use of
short-term credit necessary for clearance of purchases and sales of portfolio
securities, but it may make margin deposits in connection with transactions in
options, futures, and options on futures or purchase or sell puts or calls, or
confirmations thereof.

     3. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that the Fund may (i) borrow from banks, but only
if immediately after each borrowing there is asset coverage of 300 percent, (ii)
enter into transactions in options futures, options on futures, and other
derivative instruments as described in the Prospectus and this Statement of
Additional Information (the deposit of assets in escrow in connection with the
writing of covered put and call options and the purchase of securities on a
when-issued or delayed delivery basis, collateral arrangements with respect to
initial or variation margin deposit for futures contracts and commitments
entered into under swap agreements or other derivative instruments, will not be
deemed to be pledges of the Fund's assets), (iii) enter into reverse repurchase
agreements, dollar roll transactions or economically similar transactions to the
extent its commitment under such transaction is covered by the segregation of
assets, and (iv) borrow money as a temporary measure for extraordinary or
emergency purposes provided that such borrowings do not exceed 5 percent of the
gross assets of the Fund valued at the lesser of cost or market value, and the
Fund does not pledge, mortgage, or hypothecate assets valued at market to an
extent greater than 10 percent of the gross assets valued at cost of the Fund.

     4. Concentrate investments in any industry. However, it may (a) invest up
to 25 percent of the value of its total assets in any one industry, (b) invest
up to 100 percent of the value of its total assets in securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and (c)
invest for temporary defensive purposes up to 80 percent of the value of its
total assets in certificates of deposit (C/D's) and bankers' acceptances with
maturities not greater than one year. C/D's and bankers' acceptances will be
limited to domestic banks that have total assets in excess of $1 billion and are
subject to regulatory supervision by the U.S. Government or state governments.
Commitments to purchase securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities on a "when-issued" basis may not exceed 20
percent of the total assets of the Fund. Emphasis on investments in securities
of a particular industry will be shifted whenever the adviser determines that
such action is desirable for investment reasons. The directors will periodically
review these decisions of the adviser.

     5. Underwrite securities of other issuers, except the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933, as amended.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of its total assets at
market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its instrumentalities), with reference to
75 percent of the assets of the Fund.

     7. Buy or sell real estate. However, the Fund may purchase or hold
securities issued by companies, such as real estate investment trusts, that deal
in real estate or interests therein, and participation interests in pool of real
estate mortgage loans.

     8. Buy or sell commodities or commodities contracts or oil, gas or mineral
programs, except that the Fund may purchase, sell or enter into financial
futures contracts and options on future contracts, foreign currency forward
contracts, foreign currency options, or any interest rate, securities-related or
foreign currency related hedging instrument, including swap agreements and other
derivative instruments, subject to compliance with any applicable provisions of
the federal securities or commodities laws.

     9. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     10. Make loans, except that the Fund may (a) purchase debt obligations
which are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     11. Invest in the securities of any company if the purchase, at the time
thereof, would cause more than 5 percent of the value of the Fund's total assets
to be invested in companies which, including predecessors and parents, have a
record of less than three years of continuous operation.

     12. Invest in companies to exercise control or management.

     13. Purchase or retain securities of an issuer, any of whose officers or
directors or security holders is an officer or director of the Fund or of its
adviser if, or so long as, the officers and directors of the Fund and of its
adviser together own beneficially more than 5 percent of any class of securities
of the issuer.

     14. Engage in short sale of securities except to the extent that it owns
other securities convertible into an equivalent amount of such securities. These
short sales may only be made to protect a profit in or to attempt to minimize a
loss with respect to convertible securities. In any event no more than 10
percent of the Fund's net assets valued at market may, at any time, be held as
collateral for such sales.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA FIXED INCOME SECURITIES FUND, INC.

The Fixed Income Securities Fund may not:

     1. Buy or sell commodities or commodity futures contracts.

     2. Concentrate investments in any industry. However, it may (a) invest up
to 25 percent of the value of its total assets in any one industry, (b) invest
up to 100 percent of the value of its total assets in securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and (c)
invest for defensive purposes up to 80 percent of the value of its total assets
in certificates of deposit (CDs) and bankers' acceptances with maturities not
greater than one year. CDs and bankers' acceptances will be limited to domestic
banks which have total assets in excess of one billion dollars and are subject
to regulatory supervision by the U.S. Government or state governments.
Commitments to purchase securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities on a "when-issued" basis may not exceed 20
percent of the total assets of the Fund. Emphasis on investments in securities
of a particular industry will be shifted whenever the Adviser determines that
such action is desirable for investment reasons. The Board of Directors will
periodically review these decisions of the Adviser.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies such as real estate investment trusts,
which operate in real estate or interests therein, and participation interests
in pools of real estate mortgage loans.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of its total assets at
market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its instrumentalities), with reference to
75 percent of the assets of the Fund.

     7. Purchase or retain securities issued by an issuer, any of whose officers
or directors or security holders is an officer or director of the Fund or of its
adviser if, or so long as, the officers and directors of the Fund and of its
adviser together own beneficially more than 5 percent of any class of securities
of the issuer.

     8. Issue senior securities, bonds, or debentures.

     9. Underwrite securities of other issuers, except the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     10. Borrow money except as a temporary measure for extraordinary or
emergency purposes. Its borrowings may not exceed 5 percent of the value of the
gross assets of the Fund taken at the lesser of cost or market value, nor may it
pledge, mortgage, or hypothecate assets taken at market to an extent greater
than 10 percent of the value of the gross assets taken at cost of the Fund.

     11. Invest in the securities of any company if the purchase, at the time
thereof, would cause more than 5 percent of the value of the Fund's total assets
to be invested in companies which, including predecessors and parents, have a
record of less than three years continuous operation.

     12. Invest in companies to exercise control or management.

     13. Buy any securities or other property on margin, or purchase or sell
puts or calls, or combinations thereof.

     14. Engage in short sales of securities except to the extent that it owns
other securities convertible into an equivalent amount of such securities. These
short sales may only be made to protect a profit in or to attempt to minimize a
loss with respect to convertible securities. In any event, no more than 10
percent of the value of the Fund's net assets taken at market may, at any time,
be held as collateral for such sales.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA NATIONAL MUNICIPAL BOND FUND, INC.

The National Municipal Bond Fund may not:

     1. Buy or sell real estate, but this shall not prevent the Fund from
investing in municipal obligations secured by real estate or interests therein.

     2. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     3. Purchase more than 10 percent of the voting securities of any issuer.

     4. Buy or sell commodities or commodity future contracts.

     5. Issue senior securities, bonds, or debentures.

     6. Sell securities short or buy any securities or other property on margin,
except for short-term credits necessary for clearing transactions.

     7. Lend portfolio securities to broker-dealers or other institutional
investors if, as a result, the aggregate value of all securities loaned exceeds
33 1/3 percent of the total assets of the Fund.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed an underwriter for
purposes of the Securities Act of 1933.

     9. Borrow money except temporarily for extraordinary or emergency purposes;
nor may it pledge, mortgage, or hypothecate assets having a market value greater
than 10 percent of the cost of the gross assets of the Fund. For amounts
borrowed, the Fund shall maintain an asset coverage of 300 percent for all
borrowings. This restriction means that the Fund may not borrow money in an
amount exceeding 50 percent of its gross assets. The Fund will not make any
additional investments while borrowings exceed 5 percent of the value of the
Fund's total assets.

     10. Invest more than 25 percent of its assets in a single industry.

COLUMBIA OREGON MUNICIPAL BOND FUND, INC.

The Oregon Municipal Bond Fund may not:

     1. Buy or sell real estate, but this shall not prevent the Fund from
investing in municipal obligations secured by real estate or interests therein.

     2. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     3. Purchase more than 10 percent of the voting securities of any issuer.

     4. Buy or sell commodities or commodity future contracts.

     5. Issue senior securities, bonds, or debentures.

     6. Sell securities short or buy any securities or other property on margin,
except for short-term credits necessary for clearing transactions.

     7. Lend portfolio securities to broker-dealers or other institutional
investors if, as a result, the aggregate value of all securities loaned exceeds
33 1/3 percent of the total assets of the Fund.

     8. Underwrite securities of other issuers, except that the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed an underwriter for
purposes of the Securities Act of 1933.

     9. Borrow money except temporarily for extraordinary or emergency purposes;
nor may it pledge, mortgage, or hypothecate assets having a market value greater
than 10 percent of the cost of the gross assets of the Fund. For amounts
borrowed, the Fund shall maintain an asset coverage of 300 percent for all
borrowings. This restriction means that the Fund may not borrow money in an
amount exceeding 50 percent of its gross assets. The Fund will not make any
additional investments while borrowings exceed 5 percent of the value of the
Fund's total assets.

     10. Invest more than 25 percent of its assets in a single industry.

COLUMBIA HIGH YIELD FUND, INC.

The High Yield Fund may not:

     1. Buy or sell commodities or commodity futures contracts.

     2. Concentrate investments in any industry. However, it may (a) invest up
to 25 percent of the value of its total assets in any one industry, (b) invest
up to 100 percent of the value of its total assets in securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities, and (c)
invest for defensive purposes up to 80 percent of the value of its total assets
in CDs and bankers' acceptances with maturities not greater than one year. CDs
and bankers' acceptances will be limited to domestic banks which have total
assets in excess of $1 billion and are subject to regulatory supervision by the
U.S. Government or state governments. Commitments to purchase securities issued
or guaranteed by the U.S. Government or its agencies or instrumentalities on a
"when-issued" basis may not exceed 20 percent of the total assets of the Fund.
Emphasis on investments in securities of a particular industry will be shifted
whenever the Adviser determines that such action is desirable for investment
reasons. The Board of Directors will periodically review these decisions of the
Adviser.

     3. Buy or sell real estate. However, the Fund may purchase or hold readily
marketable securities issued by companies, such as real estate investment
trusts, that operate in real estate or interests therein, and participation
interests in pools of real estate mortgage loans.

     4. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     5. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 10 percent of the outstanding voting securities
of that issuer to be held in the Fund.

     6. Purchase the securities of any issuer if the purchase, at the time
thereof, would cause more than 5 percent of the value of its total assets at
market value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its instrumentalities), with reference to
75 percent of the assets of the Fund.

     7. Purchase or retain securities of an issuer if those officers or
directors of the Fund or the Adviser who individually own more than 1/2 of 1
percent of the outstanding securities of that issuer together own more than 5
percent of such securities.

     8. Issue senior securities, bonds, or debentures.

     9. Underwrite securities of other issuers, except the Fund may acquire
portfolio securities in circumstances where, if the securities are later
publicly offered or sold by the Fund, it might be deemed to be an underwriter
for purposes of the Securities Act of 1933.

     10. Borrow money except as a temporary measure for extraordinary or
emergency purposes. Its borrowings may not exceed 5 percent of the gross assets
of the Fund valued at the lesser of cost or market value, nor may it pledge,
mortgage, or hypothecate assets valued at market to an extent greater than 10
percent of the gross assets valued at cost of the Fund.

     11. Invest in the securities of any company if the purchase, at the time
thereof, would cause more than 5 percent of the value of the Fund's total assets
to be invested in companies which, including predecessors and parents, have a
record of less than three years continuous operation.

     12. Invest in companies to exercise control or management.

     13. Buy any securities or other property on margin, except for short-term
credits necessary for clearing transactions and except that margin payments and
other deposits in connection with transactions in options, futures, and forward
contracts shall not be deemed to constitute purchasing securities on margin.

     14. Engage in short sales of securities except to the extent that it owns
other securities convertible into an equivalent amount of such securities. These
short sales may only be made to protect a profit in or to attempt to minimize a
loss with respect to convertible securities. In any event, no more than 10
percent of the Fund's net assets valued at market may, at any time, be held as
collateral for such sales.

     15. Invest directly in oil, gas, or other mineral development or
exploration programs or leases; although, the Fund may own securities of
companies engaged in those businesses.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
15% of its net assets would be invested in securities that are illiquid.

COLUMBIA DAILY INCOME COMPANY

The Columbia Daily Income Company may not:

     1. Borrow money to improve portfolio yield except as a temporary measure to
avoid disruptive redemptions, and not for investment purposes. Borrowings will
not exceed 33 1/3 percent of total assets and will be repaid from the proceeds
of sales of the Fund's shares or as maturities allow.

     2. Underwrite securities issued by others except as it may be deemed to be
an underwriter in a sale of restricted securities.

     3. Invest more than 5 percent of its assets (exclusive of obligations
issued or guaranteed as to principal and interest by the U.S. Government or any
agency or instrumentality thereof) in the securities of any one issuer. The Fund
may invest up to 100 percent of its total assets in obligations of U.S. banks
which are members of the Federal Reserve System. However, the Fund will not
invest more than 25 percent of its assets in any other single industry.

     4. Buy or sell real estate.

     5. Buy or sell commodities or commodity contracts.

     6. Make loans, except that the Fund may (a) purchase debt obligations which
are consistent with its investment objectives and policies; (b) enter into
repurchase agreements; and (c) loan its portfolio securities, to the fullest
extent permitted under the 1940 Act.

     7. Purchase common stocks, preferred stocks, warrants, or other equity
securities.

     8. Purchase securities on margin.

     9. Sell securities short.

     10. Write or purchase put or call options.

     11. Invest in the securities of other investment companies, except those
acquired as part of a merger, consolidation, or acquisition of assets.

     The following is a list of non-fundamental investment restrictions
applicable to the Fund. These restrictions can be changed by the Board, but the
change will only be effective after notice is given to shareholders of the Fund.

     The Fund may not:

     1. Purchase or otherwise acquire any security if, as a result, more than
10% of its net assets would be invested in securities that are illiquid.

INVESTMENT RESTRICTIONS UNDER RULE 2A-7

     Rule 2a-7 under the 1940 Act requires that all portfolio securities of the
Columbia Daily Income Company have at the time of purchase a maximum remaining
maturity (as defined in the rule) of 13 months and that the Fund maintain a
dollar-weighted average portfolio maturity of not more than 90 days. (The Fund,
however, will be invested in short-term debt obligations maturing within 12
months.) Rule 2a-7 further requires that investments by a money market fund must
present minimal credit risk and, if rated, must be rated within one of the two
highest rating categories for short-term debt obligations by at least two major
rating agencies assigning a rating to the securities or issuer or, if only one
rating agency has assigned a rating, by that agency. Purchases of securities
which are unrated or rated by only one rating agency must be approved or
ratified by the Board of Directors of the Fund. Securities that are rated (or
that have been issued by an issuer that is rated with respect to a class of
short-term debt obligations, or any security within that class, comparable in
priority and quality with such securities) in the highest category by at least
two major rating agencies are designated "First Tier Securities." Securities
rated in the top two categories by at least two major rating agencies, but which
are not rated in the highest category by two or more major rating agencies, are
designated "Second Tier Securities." Securities which are unrated may be
purchased only if they are deemed to be of comparable quality to rated
securities. Under Rule 2a-7, a fund may not invest more than the greater of 1
percent of its total assets or one million dollars, measured at the time of
investment, in the securities of a single issuer that were Second Tier
Securities when acquired by the fund. In addition, a money market fund may not
under Rule 2a-7 invest more than 5 percent of its total assets in securities
that were Second Tier Securities when acquired.

     The Fund may not invest more than 5 percent of its total assets in the
securities of any one issuer, except this limitation does not apply to U.S.
Government securities and repurchase agreements thereon. The Fund may, however,
invest more than 5 percent of its total assets in the First Tier Securities of a
single issuer for up to three business days, although the Fund may not make more
than one such investment at any one time.

     Investment policies of the Fund are in certain circumstances more
restrictive than the restrictions under Rule 2a-7. In particular, investments by
the Fund are restricted to the following:

     1. Securities issued or guaranteed as to principal and interest by the U.S.
Government or issued or guaranteed by agencies or instrumentalities thereof and
repurchase agreements relating to these securities.

     2. Commercial paper which, if rated by S&P or Moody's is rated A-1 by S&P
and Prime 1 by Moody's or, if not rated, is determined to be of comparable
quality by the Board of Directors of the Fund.

     3. Other corporate debt securities with remaining maturities of less than
12 months, including bonds and notes, of an issuer that has received ratings
from S&P and Moody's for its other short-term debt obligations as described in
paragraph 2 above, where such corporate debt securities are comparable in
priority and security to the rated short-term debt obligations or, if no ratings
are available, where such corporate debt securities are determined to be of
comparable quality under procedures approved by the Board of Directors of the
Fund.

     4. Obligations of U.S. banks that are members of the Federal Reserve System
and have capital surplus and undivided profits as of the date of their most
recent published financial statements in excess of $100 million and are
determined by the Board of Directors of the Fund to be of comparable quality to
the obligations described in paragraphs 2 or 3 above. Currently these
obligations are CDs, bankers' acceptances, and letters of credit.

     These four investment restrictions applicable to the Fund are also
non-fundamental, which means they can be changed by the Board. Any change,
however, will only be effective after notice is given to shareholders of the
Fund.


- --------------------------------------------------------------------------------
                                   MANAGEMENT
- --------------------------------------------------------------------------------

     Each Fund is managed under the supervision of its Board of Directors, which
has responsibility for overseeing decisions relating to the investment policies
and goals of the Fund. The Board of Directors of each Fund meets quarterly to
review the Fund's investment policies, performance, expenses, and other business
matters. The directors and officers of the Funds are listed below. There is no
family relationship between any of the directors.


DIRECTORS AND OFFICERS

PRINCIPAL OFFICERS:


                                                                                                     NUMBER OF
                                                                              PRINCIPAL            PORTFOLIOS IN    OTHER
                                 POSITION(S)    TERM OF OFFICE AND          OCCUPATION(S)          FUND COMPLEX   DIRECTORSHIPS
                                  HELD WITH       LENGTH OF TIME            DURING PAST 5           OVERSEEN BY    HELD BY
NAME, ADDRESS AND AGE               FUNDS            SERVED**                 YEARS***             DIRECTOR****   DIRECTOR

                                                                                                      
  J. Kevin Connaughton*        Chief            Since December      Treasurer of Liberty Funds
  245 Summer Street            Financial        2002                and Liberty All-Star Funds,
  Boston, MA 02110             Officer                              Stein Roe Funds and Galaxy
  (38 years old)                                                    Funds; Senior Vice President
                                                                    of Liberty Funds Group LLC.
                                                                    Prior to his current
                                                                    positions, Mr. Connaughton
                                                                    was Controller of Liberty
                                                                    Funds, Liberty All-Star
                                                                    Funds and Stein Roe Funds;
                                                                    Vice President of Liberty
                                                                    Funds Group LLC and Colonial
                                                                    Management Associates, Inc.;
                                                                    Senior Tax Manager, Coopers
                                                                    & Lybrand LLP.

  Jeff B. Curtis*              President and    Served for 3 Years  Managing Director, Executive
  1300 S.W. Sixth Avenue       Assistant                            Vice President and Chief
  Portland, OR 97201           Secretary                            Operating Officer-West Coast
  (49 years old)                                                    of the Adviser. Prior to his
                                                                    current positions, Mr.
                                                                    Curtis was President, Senior
                                                                    Vice President and General
                                                                    Counsel of the Adviser.

  Kathleen M. Griffin*         Vice President   Served for 3 Years  Vice President of Columbia
  1300 S.W. Sixth Avenue                                            Financial Center Incorporated
  Portland, OR 97201
  (44 years old)

  Richard J. Johnson*          Chief            Since January 2003  Head of Equities/Portland
  1300 S.W. Sixth Avenue       Investment                           and Senior Vice President of
  Portland, OR 97201           Officer and                          the Adviser; Chief
  (45 years old)               Senior Vice                          Investment Officer and
                               President                            Senior Vice President of
                                                                    Columbia Trust Company.
                                                                    Prior to his current
                                                                    positions with the Adviser,
                                                                    Mr. Johnson was Chief
                                                                    Investment Officer and Vice
                                                                    President of the Adviser.

  Jeffrey L. Lunzer*           Vice President   Served for 3 Years  Vice President of the
  1300 S.W. Sixth Avenue                                            Adviser. Prior to his
  Portland, OR 97201                                                current positions Mr. Lunzer
  (42 years old)                                                    was the Controller for the
                                                                    Funds. Before joining the
                                                                    Funds, Mr. Lunzer was
                                                                    Treasurer and Fund Officer
                                                                    of WM Group of Funds, a
                                                                    mutual fund company.

 Joseph R. Palombo*            Vice President   Since January 2003  Chief Operating Officer and
 245 Summer Street                                                  Director of the Adviser;
 Boston, MA 02110                                                   Director of Columbia
 (50 years old)                                                     Financial Center
                                                                    Incorporated; Vice President
                                                                    of Stein Roe Services, Inc.;
                                                                    Director of Colonial
                                                                    Advisory Services, Inc.;
                                                                    Director of Liberty
                                                                    Financial Advisors; Director
                                                                    of Alpha Trade, Inc.;
                                                                    Director of Liberty Funds
                                                                    Distributor, Inc.;
                                                                    Executive Vice President and
                                                                    Chief Administrative Officer
                                                                    of Liberty Funds Group LLC;
                                                                    Director of Liberty Funds
                                                                    Services, Inc.; Prior to
                                                                    these positions, Mr. Palombo
                                                                    was Managing Director of
                                                                    Putnam Investments.

  Mark A. Wentzien*            Secretary        Served for 3 Years  Vice President of the
  1300 S.W. Sixth Avenue                                            Adviser. Prior to his
  Portland, OR 97201                                                current positions, Mr.
  (43 years old)                                                    Wentzien was Associate
                                                                    Counsel of the Adviser.


DISINTERESTED DIRECTORS:

                                                                                               NUMBER OF
                                                                                              PORTFOLIOS
                                                                                                IN FUND
                                   POSITION(S)     TERM OF OFFICE          PRINCIPAL            COMPLEX          OTHER
                                    HELD WITH      AND LENGTH OF      OCCUPATION(S) DURING    OVERSEEN BY    DIRECTORSHIPS
NAME, ADDRESS AND AGE                 FUNDS        TIME SERVED**        PAST 5 YEARS***      DIRECTOR****   HELD BY DIRECTOR


                                                                                                
  James C. George                  Director      Served for 9 Years  Investment Consultant        35           None
  1001 S.W. 5th Avenue
  Suite 1100
  Portland, OR 97204
  (70 years old)

  Charles R. Nelson                Director      Served since July   Van Voorhis                  35*****      None*****
  Department of Economics                        31, 2002            Professor, Department
  University of Washington                                           of Economics,
  Seattle, WA 98195                                                  University of
  (60 years old)                                                     Washington;
                                                                     consultant on
                                                                     economic and
                                                                     statistical matters

  Patrick J. Simpson               Director      Served for 3 Years  Lawyer, Perkins Coie         35           None
  1211 S.W. 5th Avenue                                               LLP
  Suite 1500
  Portland, OR 97204
  (58 years old)

  Richard L. Woolworth             Director      Served for 12       Chairman/CEO, The            35           The Regence Group,
  100 S.W. Market St. #1500                      Years               Regence Group                             Regence BlueCross
  Portland, OR 97207                                                                                           BlueShield of
  (61 years old)                                                                                               Oregon; NW Natural, a
                                                                                                               natural gas service
                                                                                                               provider

    * Interested person as defined by the 1940 Act.

   ** Each director serves for an indefinite term in accordance with the current Bylaws of each Fund until the date a director
      resigns, retires or is removed in accordance with the Bylaws of each Fund.

  *** All of the officers of the Funds are employees and officers of the Adviser and/or its affiliates. Only principal
      occupations are listed.

 **** Each director is a Trustee of CMG Fund Trust, an open-end management investment company also advised by the Adviser.

***** In addition to serving as a disinterested director of the Funds, Mr. Nelson serves as an independent trustee of the funds
      in the Liberty Funds Group, which are advised and distributed by the Adviser, currently consisting of 85 funds.


Board of Directors

     The directors of the Funds are responsible for overseeing decisions
relating to the investment policies and goals of the Funds. The Funds hire other
parties that are responsible for the day-to-day operations of the Fund, such as
the Adviser, transfer agent and custodian. The directors meet quarterly to
review the Funds' investment policies, performance, expenses, and other business
matters. The Funds established an Audit Committee in January 2002. The Audit
Committee considers and engage, on an annual basis, the Funds' independent
auditors, reviews with management and the independent auditors the Report of
Independent Accountants, and generally oversees the audit process. The Audit
Committee is composed of the Funds' disinterested directors. The Audit Committee
held one meeting during fiscal year ended December 31, 2002.

     In addition, each of the Funds adopted a nominating policy in January 2002
under which the disinterested directors of the Funds are responsible for
selecting and nominating candidates for election to serve as directors. The
disinterested directors will not consider nominees recommended by Fund
shareholders. The Nominating Committee held one meeting during fiscal year ended
December 31, 2002.

     Lastly, the Compensation Committee which is composed of the disinterested
directors of the Funds is responsible for determining director compensation. The
Compensation Committee held one meeting during fiscal year ended December 31,
2002.

     The following table sets forth the dollar range of Class Z shares owned by
each director as of December 31, 2002 of (i) each individual Fund and (ii) all
of the funds in the same family of investment companies as the Funds:

DISINTERESTED DIRECTORS:



                                                       JAMES C.              PATRICK J.         RICHARD L.         CHARLES R.
DOLLAR RANGE OF FUND SHARES                             GEORGE                 SIMPSON           WOOLWORTH           NELSON

                                                                                                     
Common Stock Fund                                   Over $100,000         None                $10,001-$50,000    None
Balanced Fund                                       None                  $1-$10,000          None               None
Growth Fund                                         Over $100,000         $10,001-$50,000     $1-$10,000         None
Special Fund                                        Over $100,000         $1-$10,000          $1-$10,000         $10,001-$50,000
Small Cap Fund                                      $50,001-$100,000      None                $1-$10,000         None
International Stock Fund                            Over $100,000         None                $1-$10,000         $10,001-$50,000
Real Estate Equity Fund                             Over $100,000         None                $1-$10,000         None
Strategic Value Fund                                $10,001-$50,000       None                $1-$10,000         None
Technology Fund                                     $1-$10,000            None                None               None
Columbia Daily Income Company                       Over $100,000         None                $10,001-$50,000    None
Fixed Income Securities Fund                        None                  None                None               None
Short Term Bond Fund                                None                  None                None               None
High Yield Fund                                     $50,001-$100,000      None                None               None
Oregon Municipal Bond Fund                          None                  None                $1-$10,000         None
National Municipal Bond Fund                        None                  None                None               None
     AGGREGATE DOLLAR RANGE OF FUND SHARES IN FUNDS OVERSEEN BY DIRECTOR
     IN FAMILY OF INVESTMENT COMPANIES:
                                                    OVER $100,000         $10,001-$50,000     $10,001-$50,000    Over $100,000


     As of December 31, 2002, none of the disinterested directors or members of
their immediate families owned any securities of the Adviser or any other entity
directly or indirectly controlling, controlled by, or under common control with
the Adviser.

Approval of Investment Advisory Contract

     Each of the Funds has entered into a separate investment advisory contract
with the Adviser. The investment advisory contract is subject to annual approval
by the Board of Directors, including a majority of disinterested directors. The
existing contracts were last considered and approved at an in-person meeting
held in April 2003. In determining the reasonableness of the advisory fees under
the contract, the directors considered several factors, including:

     o The nature and quality of services provided to the Funds' shareholders,

     o A comparison of the fee structures of other mutual funds,

     o The profitability of the advisory contract for the Adviser,

     o Fall-out benefits realized by the Adviser from service as adviser to the
Funds, and

     o The existence of economies of scale with respect to the provision of
investment advice to the Funds.

     In reviewing the quality of services provided by the Adviser, the directors
examined the performance of the Funds compared to other mutual funds with
similar investment objectives and against one or more securities indices that
were considered appropriate. Performance over one-, three- and five-year periods
for each Fund were reviewed as well as rankings and ratings from Lipper Inc. In
addition, the directors assessed the day-to-day management of the Funds,
reviewing information provided at the meeting at which the contract was approved
and at earlier meetings during the fiscal year. The directors considered the
quality of the administrative services provided by the Adviser and its
affiliates to the Funds and the financial and other resources of the Adviser and
its parent companies.

     The directors reviewed overall expense ratios of the Funds, including the
aggregate expenses of the Funds to their net assets, as well as to the Funds'
management fee. The directors considered an independent report from Lipper Inc.
detailing the expense ratios of comparable funds with similar investment
objectives, strategy, size and distribution methods.

     The directors reviewed data related to the profitability of the Adviser
with respect to its contracts with the Funds and considered the additional
benefits to the Adviser as a result of its relationship with the Funds,
including soft dollar benefits. The directors also considered the benefits to
affiliates of the Adviser as the result of its management of the Funds,
including Columbia Trust Company, which prior to October 18, 2002 served as
transfer agent for the Funds and Liberty Funds Services, Inc. ("LFS,") the
Funds' current transfer agent as well as fees received by the Adviser for
services it provides pursuant to a Pricing, Bookkeeping and Administration
Agreement and certain brokerage firms affiliated with the Adviser which executed
trades for the Funds from time to time.

     After considering these and other factors, and each Fund's specific
circumstances, the directors concluded that the advisory contract of each Fund
with the Adviser was reasonable for such Fund and in the best interests of its
shareholders. During their deliberations, the directors requested from the
Adviser all information reasonably necessary for the directors to evaluate each
advisory contract. The disinterested directors were also assisted by, and met
separately with, their independent counsel. See the section entitled "INVESTMENT
ADVISORY AND OTHER FEES PAID TO AFFILIATES" for further information about the
Adviser and the Funds' investment advisory contract.





Director Compensation:

     The following table sets forth compensation received by the Funds'
directors for the year ended December 31, 2002. No officer of the Funds received
any compensation from the Funds in 2002.



                               COMPENSATION TABLE

                                                      JAMES C. PATRICK J. RICHARD L.   CHARLES R.
AGGREGATE COMPENSATION FROM FUND                       GEORGE    SIMPSON   WOOLWORTH     NELSON

                                                                          
Common Stock Fund                                     $ 3,330   $ 3,330    $ 3,330    $ 1,601
Growth Fund                                           $ 5,203   $ 5,203    $ 5,203    $ 2,917
International Stock Fund                              $ 2,916   $ 2,916    $ 2,916    $   373
Special Fund                                          $ 3,804   $ 3,804    $ 3,804    $ 1,934
Small Cap Fund                                        $ 3,533   $ 3,533    $ 3,533    $ 1,743
Real Estate Fund                                      $ 4,076   $ 4,076    $ 4,076    $ 2,125
Balanced Fund                                         $ 4,482   $ 4,482    $ 4,482    $ 2,411
Columbia Daily Income Company                         $ 6,046   $ 6,046    $ 6,046    $ 3,509
Short Term Bond Fund                                  $ 1,393   $ 1,393    $ 1,393    $   240
Fixed Income Securities Fund                          $ 3,032   $ 3,032    $ 3,032    $ 1,392
Oregon Municipal Bond Fund                            $ 3,092   $ 3,092    $ 3,092    $ 1,434
High Yield Fund                                       $ 2,655   $ 2,655    $ 2,655    $ 1,127
National Municipal Bond Fund                          $ 1,108   $ 1,108    $ 1,108    $    40
Strategic Value Fund                                  $ 2,189   $ 2,189    $ 2,189    $   799
Technology Fund                                       $ 1,092   $ 1,092    $ 1,092    $    28
   TOTAL COMPENSATION FROM FUND COMPLEX*              $57,000   $57,000    $57,000    $ 120,182**

 * Information is for the year ended December 31, 2002 for the 141 funds in the fund complex. Messrs.
   Woolworth, George and Simpson did not receive compensation from those 118 funds in the Liberty Funds
   Group. Information includes compensation Messrs. Woolworth, George and Simpson received as Trustees of
   CMG Fund Trust which is also advised by the Adviser. Mr. Nelson was elected as a Trustee of the Trust on
   January 27, 2003 and received no compensation from the Trust in 2002. Mr. Nelson was elected as a
   director of each of the Columbia Funds in July 2002. No trustee served as Chair of the Audit Committee.

** Mr. Nelson's total compensation also includes compensation for his service as a trustee of the 118 funds
   in the Liberty Funds Group during 2002.


     SHARE OWNERSHIP:

     As of March 31, 2003, officers and directors, as a group, owned of record
or beneficially less than 1% of the outstanding Class Z shares of each Fund,
other than for the following funds:

Technology Fund                              29,948.494 shares      1.22%

National Municipal Bond Fund                 25,339.533 shares      1.66%



     As of record on March 31, 2003, to the knowledge of the Funds, no person
owned of record or beneficially more than 5% of the outstanding shares of any
Fund except the following record owners:



                                                                                                       PERCENT OF
NAME AND ADDRESS                                        FUND                                       OUTSTANDING SHARES
                                                                                                         HELD OF
                                                                                                       TOTAL CLASS

                                                                                                    
AG Edwards & Sons                Columbia Common Stock A                                                  7.01%
Ralph Lassey, IRA Rollover
38 McKenzie Drive
Claremont, New Hampshire 03743

AG Edwards & Sons                Columbia Real Estate Equity Fund D (FBO Arni Nasbar)                     13.15%
1 North Jefferson Avenue         Columbia National Municipal Bond Fund B (FBO                             6.45%
Saint Louis, Missouri 63103      Dominic & Carol Bonacorsi)

American Enterprise Investment   Columbia Growth Fund B (FBO Arni Nasbar)                                 5.14%
Ser.
Post Office Box 9446             Columbia Technology Fund A                                               28.59%
Minneapolis, Minnesota 55440     Columbia Technology Fund B (FBO 216940881)                               15.39%
                                 Columbia Technology Fund B (FBO 217904721)                               17.28%
                                 Columbia Technology Fund B (FBO 217905551)                               25.86%
                                 Columbia Fixed Income Securities Fund D (FBO 208964371)                   5.10%
                                 Columbia Fixed Income Securities Fund A (FBO 213798131)                   8.75%
                                 Columbia Oregon Municipal Bond Fund B (FBO 573612971)                    15.41%
                                 Columbia Oregon Municipal Bond Fund B (FBO 210044111)                     6.49%
                                 Columbia National Municipal Bond Fund A (FBO 217284721)                  18.03%
                                 Columbia National Municipal Bond Fund A (FBO 213994311)                   7.85%

Arlene M. Omeara                 Columbia National Municipal Bond Fund A                                  10.36%
97 Glendale Avenue
Winsted Manor, Connecticut
06098

Bear Stearns Securities Corp.    Columbia Short Term Bond Fund A                                          18.66%
1 Metrotech Center N
Brooklyn, New York 11201

Charles Schwab & Co. Inc         Columbia Common Stock Z                                                  11.23%
101 Montgomery Street            Columbia Short Term Bond Fund A                                          11.71%
San Francisco, California 94101  Columbia Real Estate Equity Fund A (Mutual Funds)                        37.91%
                                 Columbia Real Estate Equity Fund Z (Mutual Funds)                        33.10%
                                 Columbia High Yield Fund A                                               30.97%
                                 Columbia High Yield Fund Z                                               30.47%
                                 Columbia Strategic Value Fund A                                          19.26%
                                 Columbia Strategic Value Fund Z                                          15.69%
                                 Columbia Balanced Fund Z                                                 12.06%
                                 Columbia Fixed Income Securities Fund A                                  18.47%
                                 Columbia Fixed Income Securities Fund Z                                  11.08%
                                 Columbia Oregon Municipal Bond Fund Z                                    5.83%
                                 Columbia Special Fund Z                                                  10.15%
                                 Columbia Small Cap Fund Z                                                7.96%

Columbia Management Company      Columbia Daily Income Company Z                                          6.11%
Post Office Box 1350
Portland, Oregon 97207

Columbia Trust Company           Columbia Growth Fund D (Morrison & Head LP, Jill Morrison)               8.46%
9903 Sausalito Drive             Columbia Growth Fund D (Morrison & Head LP, Chet Morrison)               10.50%
Austin, Texas 78759

Columbia Trust Company           Columbia Technology Fund B                                               23.18%
Arms Inc./Patrick Hannigan
2447 East Sunshine Drive
Boise, Idaho 83712

Columbia Trust Company           Columbia Common Stock A                                                  14.17%
Roth IRA/Allison Kirchmer
4407 Mountain Cove Drive
Charlotte, North Carolina 28216

Columbia Trust Company           Columbia Technology Fund A                                               6.79%
IRA/Gerald Engleman
Post Office Box 1032
Depoe Bay, Oregon 97341

Columbia Trust Company           Columbia Strategic Value Fund D                                          5.64%
IRA/James Krueger
389 Red Field Place
Monaga, California 94556

Columbia Trust Company           Columbia Technology Fund D                                               83.85%
Thomasville Home Furnishings
Of AZ/Brandon Levalley
4510 East Weaver Road
Phoenix, Arizona 85024

Columbia Trust Company           Columbia Growth Fund D                                                   9.96%
Qing C. Wang
59 Mozart Street
East Rutherford, New Jersey
07073

Columbia Trust Company           Columbia Fixed Income Securities Fund D                                  6.02%
IRA/Edward Hannan
12 Miller Lane
Troy, New York 12180

Columbia Trust Company           Columbia Technology Fund A                                               53.04%
IRA/Michael Kamenitsky
165 North Street
Wallingford, Connecticut 06492

Columbia Trust Company           Columbia Strategic Value Fund D                                          5.68%
BOC International, Inc.
Joseph P. Pimlel
8 Brae Circle
Woburn, Massachusetts

Corinne Roudi                    Columbia National Municipal Bond Fund B                                  13.56%
1 Millbrook Road
Winsted, Connecticut 06098

Dain Rauscher, Inc.              Columbia Oregon Municipal Bond Fund D                                    6.71%
Ann & Michael Rosenfield TIC
60776 Currant Way
Bend, Oregon 97702

Daine Rauscher, Inc.             Columbia Oregon Municipal Bond Fund D                                    6.67%
FBO Ruth Lear
440 North West Elks Drive
Corvallis, Oregon 97330

Dain Rauscher, Inc.              Columbia Oregon Municipal Bond Fund A                                    7.19%
FBO Andrew Moldenka Trust
6131 North West Happy Valley
Dr.
Corvallis, Oregon 97330

Dain Rauscher, Inc.              Columbia Oregon Municipal Bond Fund B                                    26.78%
FBO Gillici Jackson Revoc.
Trust
611 North West 30th Street
Corvallis, Oregon 97330

Dorothy Powers                   Columbia National Municipal Bond Fund A                                  25.35%
12011 North 52nd Street
Tampa, Florida 33617

Edward D. Jones & Co.            Columbia Special Fund D                                                  7.32%
FBO Beulah Mitchell Trust
Post Office Box 2500
Maryland Heights, Missouri
63043

First Clearing Corp.             Columbia Growth Fund B                                                   5.77%
Roth IRA/Patricia Hollingsworth
Howell
10807 Danube Avenue
Granada Hills, California 91344

First Clearing Corp.             Columbia Balanced Fund D                                                 9.99%
IRA/Rennie Verbeek
219 Hayden Road
Groton, Massachusetts 01450

First Clearing Corp.             Columbia Balanced Fund D                                                 50.90%
Pension Trust Fund/Steephen
Kriso, PA
165 Bell Avenue
Hasbrouck Heights, New Jersey
07604

First Clearing Corp.             Columbia Balanced Fund B                                                 5.83%
Philip Kass
14 Tamaques Way
Westfield, New Jersey 07090

First Clearing Corp.             Columbia National Municipal Bond Fund D                                  34.76%
Daniel & Jeanne Andreucci
1657 Connor Road
South Park, Pennsylvania 15129

Fiserv Securities Inc.           Columbia Common Stock D                                                  7.07%
One Commerce Square              Columbia Growth Fund D                                                   7.10%
Philadelphia, Pennsylvania
19103

Fleet National Bank              Columbia Growth Fund Z (Liberty)                                         6.13%
FBO Omnibus                      Columbia Short Term Bond Fund Z (CMC C/R)                                13.19%
PO Box 92800                     Columbia Short Term Bond Fund Z (CMC C/C)                                37.67%
Rochester, NY  14692-8900        Columbia Short Term Bond Fund Z (CMC C/R)                                16.08%
                                 Columbia International Stock Fund Z (CMC C/C)                            19.08%
                                 Columbia International Stock Fund Z (CMC C/R)                            6.31%
                                 Columbia Real Estate Equity Fund Z (CMC C/C)                             11.31%
                                 Columbia Real Estate Equity Fund Z (CMC C/R)                             5.01%
                                 Columbia High Yield Fund Z (CMC C/C)                                     13.49%
                                 Columbia High Yield Fund Z (CMC C/R)                                     7.20%
                                 Columbia Special Fund Z (CMC C/C)                                        6.15%
                                 Columbia Special Fund Z (CMC C/C)                                        5.97%

Gunilla Finrow                   Columbia National Municipal Bond Fund Z                                  7.19%
80 East Roanoke #7
Seattle, Washington 98102

Interra Clearing Services        Columbia Oregon Municipal Bond Fund A                                    28.09%
David & Janet Johnson Jt.wros.
7885 North East Todd Drive
Corvallis, Oregon 97330

Janney Montgomery Scott, LLC     Columbia Common Stock B                                                  6.65%
Howard McClone
1801 Market Street
Philadelphia, Pennsylvania
19103

JP Morgan Chase Bank R/O IRA     Columbia Growth Fund B                                                   7.38%
Herman Carter
8716 Shotwell Street
Houston, Texas 77016

Liberty Funds Group              Columbia Technology Fund D                                               16.15%
100 Federal Street
Boston, Massachusetts 02110

LPL Financial Services           Columbia Real Estate Equity Fund D                                       7.46%
9785 Towne Centre Drive          Columbia Strategic Value Fund D                                          7.14%
San Diego, California 92121      Columbia Balanced Fund A                                                 22.87%
                                 Columbia Oregon Municipal Bond Fund D                                    10.86%
                                 Columbia National Municipal Bond Fund A                                  5.65%
                                 Columbia National Municipal Bond Fund B                                  9.42%

Louisiana Worker Compensation    Columbia High Yield Fund A                                               11.94%
2237 South Acadian Thruway
Baton Rouge, Louisiana 70808

Merrill Lynch Pierce Fenner &    Columbia International Stock Fund B                                      6.01%
Smith
4800 Deer Lake Drive             Columbia High Yield Fund D                                               10.25%
Jasonville, Florida 32246

James & Betty  Monroe            Columbia Balanced Fund A                                                 6.57%
3701 Clairton Drive
Bowie, Maryland 20721

National Financial Services LLC  Columbia Real Estate Equity Fund Z                                       10.73%
200 Liberty Street               Columbia High Yield Fund Z                                               16.67%
New York, New York 10281         Columbia Strategic Value Fund Z                                          8.05%
                                 Columbia Fixed Income Securities Fund Z                                  5.35%

Nationwide Trust Co. FSB         Columbia Real Estate Equity Fund A                                       8.07%
Post Office Box 182029
Columbus, Ohio 43218

NFSC FEBO                        Columbia Oregon Municipal Bond Fund D                                    6.70%
Federick Kingery
4163 South West Greenleaf Court
Portland, Oregon 97221

NFSC FEBO                        Columbia National Municipal Bond Fund B                                  13.47%
Lucille Paquin & Denise
Szymczuk
428 Iron Mine Hiill Road
N. Smithfield, Rhode Island
02896

Northern Trust Co. Trustee       Columbia Small Cap Fund Z                                                5.53%
Intermountain Healthcare 401(k)
Post Office Box 92956
Chicago, Illinois 60675

PaineWebber                      Columbia Common Stock A                                                  16.21%
1102 Phillips Avenue             Columbia Common Stock D (Roth IRA/Laurence Laine)                        31.78%
Dayton, Ohio 45410               Columbia Common Stock D (Roth IRA/Barbara Laine)                         31.78%

PaineWebber                      Columbia Balanced Fund D                                                 12.27%
Robert & Carolyn Breidenbaugh
369 East Church Street
Elmhurst, Illinois 60126

PaineWebber FBO                  Columbia Common Stock Fund A                                             16.21%
Virginia Wooten Hudson
80 Stonehaven Circle
Jackson, Tennessee 38305

PaineWebber                      Columbia Strategic Value Fund D                                          10.73%
Tony Nicholas Trustee
Turbine Supply Co. Keogh
2222 North Interstate 27
Lubbock, Texas 79403

PaineWebber FBO                  Columbia Special Fund A                                                  6.90%
Susan Caple
215 Angler Avenue
Palm Beach, Florida 33480

PaineWebber                      Columbia Growth Fund D                                                   19.43%
11650 Highland Colony Drive
Roswell, Georgia 30075

PaineWebber FBO                  Columbia National Municipal Bond Fund A                                  7.84%
Sydney Gienty
6428 Miner Drive South West
Tumwater, Washington 98512

PaineWebber                      Columbia Balanced Fund D                                                 5.38%
Mary Segura
32325 South Pasadena Street
Wildomar, California 92595

PaineWebber Custodian FBO        Columbia Growth Fund D (Philip Perez)                                    21.93%
Post Office Box 3321             Columbia Growth Fund D (Philip J. Perez)                                 11.54%
Weehawken, New Jersey 07086

Pauline B. Shipiro Trust         Columbia National Municipal Bond Fund B                                  16.04%
4910 Gadsen Drive
Fairfax, Virginia 22032

Pershing, LLC                    Columbia Growth Fund B                                                   6.30%
Post Office Box 2052             Columbia Fixed Income Securities Fund D                                  5.06%
Jersey City, New Jersey 07303    Columbia Oregon Municipal Bond Fund A                                    34.03%
                                 Columbia National Municipal Bond Fund B                                  5.42%

Raymond James & Associates FBO   Columbia Technology Fund B                                               8.38%
Wilkes IRA
880 Carillon Parkway
St. Petersburg, Florida 33716

Raymond James & Associates       Columbia Fixed Income Securities Fund D                                  6.76%
FBO Gempp IRA
880 Carillon Pkwy
St. Petersburg, Florida
33716-1100

Saxon and Co.                    Columbia Small Cap Fund Z                                                16.05%
Post Office Box 7780-1888
Philadelphia, Pennsylvania
19182

Standard Insurance Co.           Columbia Special Fund Z                                                  5.67%
Post Office Box 711
Portland, Oregon 97207

Solomon Smith Barney, Inc.       Columbia Common Stock B                                                  14.79%
333 West 34th Street, 3rd Floor
New York, New York 10001-2483

Tacoma Screw Products, Inc.      Columbia National Municipal Bond Fund Z                                  7.21%
2001 Center Street
Tacoma, Washington 98409

US Clearing Corp.                Columbia Common Stock A                                                  40.86%
26 Broadway                      Columbia Common Stock B                                                  5.35%
New York, New York 10004-1073    Columbia Common Stock D (FBO 172-08446-19)                               11.52%
                                 Columbia Common Stock D (FBO 172-05150-12)                               13.08%
                                 Columbia Growth Fund A                                                   7.48%
                                 Columbia Growth Fund B (FBO 104-91561-18)                                9.50%
                                 Columbia Growth Fund B (FBO 104-91563-16)                                5.42%
                                 Columbia Growth Fund B (FBO 104-98214-14)                                7.13%
                                 Columbia Short Term Bond Fund A (FBO 237-13971-14)                       5.57%

US Clearing Corp. continued      Columbia Short Term Bond Fund A (FBO 102-59241-17)                       6.15%
                                 Columbia Balanced Fund A                                                 22.51%
                                 Columbia Fixed Income Securities Fund D (FBO                             5.07%
                                 170-03162-17)
                                 Columbia Fixed Income Securities Fund D (FBO                             5.30%
                                 597-11452-13)
                                 Columbia Fixed Income Securities Fund D (FBO                             8.55%
                                 237-09094-14)
                                 Columbia Oregon Municipal Bond Fund D (FBO                               13.15%
                                 172-04759-10)
                                 Columbia Oregon Municipal Bond Fund D (FBO                               23.81%
                                 172-24883-17)
                                 Columbia Oregon Municipal Bond Fund D (FBO                               26.59%
                                 597-10370-14)
                                 Columbia Special Fund D                                                  5.38%
                                 Columbia National Municipal Bond Fund B (FBO                             6.55%
                                 157-09583-12)
                                 Columbia National Municipal Bond Fund B (FBO                             7.26%
                                 157-06053-19)
                                 Columbia National Municipal Bond Fund D (FBO                             16.47%
                                 592-08498-16)
                                 Columbia National Municipal Bond Fund D (FBO                             17.14%
                                 599-10131-10)
                                 Columbia National Municipal Bond Fund D (FBO                             30.92%
                                 236-21831-19)
                                 Columbia National Municipal Bond Fund A (FBO                             10.59%
                                 147-24735-19)

Wedbush Morgan Securities        Columbia Oregon Municipal Bond Fund B (A/C                               6.10%
                                 4796-2919)
1000 Wilshire Boulevard          Columbia Oregon Municipal Bond Fund B (A/C                               5.95%
                                 8710-6122)
Los Angeles, California 90017

Wells Fargo Bank                 Columbia Fixed Income Securities Fund Z (A/C                             5.09%
                                 12097802)
Post Office Box 1533             Columbia Fixed Income Securities Fund Z (NW Def.                         5.68%
                                 Comp)
Minneapolis, Minnesota 55480

Wexford Clearing Services        Columbia Common Stock B                                                  6.83%
5135 Milligan Road
Lowellville, Ohio 44436-8732

William A. Schuchmann            Columbia International Stock Fund D                                      5.24%
56 North Prospect Street
Ansonia, Connecticut 06401

Williams Revocable Trust         Columbia Balanced Fund B                                                 6.53%
24552 Paseo de Valencia
Laguna Hills, California 92653



- --------------------------------------------------------------------------------
          INVESTMENT ADVISORY AND OTHER SERVICES PROVIDED BY AFFILIATES
- --------------------------------------------------------------------------------

     The investment adviser to each of the Funds is Columbia Management
Advisors, Inc. (the "Adviser"). Effective October 31, 2002, the Adviser
succeeded to the business of Columbia Funds Management Company ("CFMC"), the
former adviser to the Funds and an entity under common control with the Adviser.
The transfer to the Adviser did not result in a change in the actual control or
management of the advisory business of CFMC. The Adviser has entered into an
investment contract with each Fund. Pursuant to the investment contract, the
Adviser provides research, advice, and supervision with respect to investment
matters and determines which securities to purchase or sell and what portion of
the Fund's assets to invest.

     The Adviser provides office space and pays all executive salaries and
executive expenses of the Fund. The Fund assumes its costs relating to corporate
matters, cost of services to shareholders, transfer and dividend paying agent
fees, custodian fees, legal and auditing expenses, disinterested director fees,
taxes and governmental fees, interest, brokers' commissions, transaction
expenses, cost of stock certificates and any other expenses (including clerical
expenses) of issue, sale, repurchase, or redemption of its shares, expenses of
registering or qualifying its shares for sale, transfer taxes, and all other
expenses of preparing its registration statement, prospectuses, and reports.

     Information regarding the advisory fee payable to the Adviser including any
waivers or offsets applicable to such Fund is set forth in the prospectus for
each Fund. For the following Funds, the advisory fee is calculated as a
percentage of net assets that declines as net assets increase, as follows:

                              
Columbia Growth Fund, Inc.       0.75% of the Fund's first $200 million of net assets;
                                 0.625% of the next $300 million of net assets; and
                                 0.50% of net assets in excess of $500 million.

Columbia Daily Income Company    0.50% of the Fund's first $500 million of net assets;
                                 0.45% of the next $500 million of net assets; and
                                 0.40% of net assets in excess of $1 billion.

Columbia Special Fund, Inc.      1.00% of the Fund's first $500 million of net assets; and
                                 0.75% of net assets in excess of $500 million.




     Advisory fees paid by each of the Funds for each of the last three years
were as follows:



FUND                                           2002           2001          2000

                                                               
Columbia Common Stock Fund                 $ 3,238,954    $ 4,439,013   $  5,844,592
Columbia Growth Fund                       $ 5,819,523    $ 8,377,937   $ 12,038,582
Columbia International Stock Fund          $ 1,375,061    $ 1,534,669   $  2,197,202
Columbia Special Fund                      $ 6,341,031    $ 7,790,604   $  9,717,028
Columbia Small Cap Fund                    $ 5,936,461    $ 5,137,830   $  4,514,814
Columbia Real Estate Fund                  $ 5,602,888    $ 3,752,707   $  2,527,697
Columbia Technology Fund*                  $    98,750    $   103,027   $      4,427
Columbia Strategic Value Fund*             $ 2,087,191    $   543,893   $      5,281
Columbia Balanced Fund                     $ 4,095,196    $ 5,191,548   $  5,393,886
Columbia Short Term Bond Fund              $   506,173    $   227,831   $    177,533
Columbia Fixed Income Securities Fund      $ 2,477,847    $ 2,158,251   $  1,886,459
Columbia National Municipal Bond Fund      $    73,374    $    59,637   $     54,029
Columbia Oregon Municipal Bond Fund        $ 2,513,517    $ 2,395,099   $  2,073,536
Columbia High Yield Fund                   $ 2,629,803    $ 1,089,470   $    463,725
Columbia Daily Income Company              $ 5,671,913    $ 5,765,043   $  5,482,957

* These Funds commenced operations November 9, 2000.


     A portion of the Adviser's fees are used to pay financial intermediaries
for services they provide to investors who invest in the Funds through such
financial intermediary. In 2002 and 2001, the Adviser paid financial
intermediaries the following amounts:

FUND - CLASS Z                                    2002                    2001

Common Stock Fund                              $ 133,472               $ 172,066
Growth Fund                                    $ 181,348               $ 220,467
International Stock Fund                       $  10,611               $  12,657
Special Fund                                   $ 150,520               $ 196,990
Small Cap Fund                                 $ 301,866               $ 276,892
Real Estate Fund                               $ 916,546               $ 586,933
Technology Fund                                $  14,202               $  13,764
Strategic Value Fund                           $ 220,849               $  26,356
Balanced Fund                                  $ 313,882               $ 346,180
Short Term Bond Fund                           $     147               $     579
Fixed Income Securities Fund                   $ 154,983               $ 114,716
National Municipal Bond Fund                   $       0               $       3
Oregon Municipal Bond Fund                     $  65,880               $  39,912
High Yield Fund                                $ 489,640               $ 176,010
Columbia Daily Income Company                  $       0               $     597

     LFS acts as transfer agent and dividend crediting agent for each Fund. Its
address is P.O. Box 1722, Boston, Massachusetts 02105-1722. It records and
disburses dividends for the Funds. For Class Z shares, each Fund pays LFS a
per-account fee of $2.27 per month for each shareholder account with the Fund
existing at any time during the month, with a minimum aggregate fee of $1,500
per month for the Fund (other than the National Municipal Bond Fund, which is
not subject to this minimum). For Class A, B, D, G and T shares, each Fund pays
LFS a monthly fee that is the lower of (i) the monthly fee described for Class Z
shares in the preceding sentence, as applied to Class A, B, D, G and T
shares, and (ii) an annual rate of 0.06% of the average daily closing value of
the total net assets for the Class A, B, D, G and T shares and certain specified
fees on a per account basis. In addition, each Fund pays LFS for extra
administrative services performed at cost in accordance with a schedule set
forth in the agreement between LFS and each Fund and reimburses LFS for certain
out-of-pocket expenses incurred in carrying out its duties under that agreement.
For certain classes of certain Funds, LFS has agreed to waive transfer agency
fees in amounts and for periods more fully described in the relevant
prospectuses.

     Prior to October 18, 2002, Columbia Trust Company, 1300 S.W. Sixth Avenue,
P.O. Box 1350, Portland, Oregon 97207, (the "Trust Company") served as transfer
agent and dividend crediting agent for the Funds. During 2002, each Fund paid
the Trust Company a per account fee of $1.66 per month for each shareholder
account with the Fund existing at any time during the month. In addition, each
Fund paid the Trust Company for extra administrative services performed at cost
in accordance with a schedule set forth in the agreement between the Trust
Company and the Fund and reimbursed the Trust Company for certain out-of-pocket
expenses incurred in carrying out its duties under that agreement. In addition
to the transfer agent services described above, the Trust Company hired PFPC
Global Fund Services as a sub-transfer agent to provide services related to fund
transactions processed through the National Securities Clearing Corporation on
behalf of the Common Stock Fund, Growth Fund, Special Fund, Real Estate Fund,
Small Cap Fund, Balanced Fund, High Yield Fund and Fixed Income Securities Fund.
Each of the above Funds agreed to pay to the Trust Company the costs incurred by
Trust Company in connection with the services provided by PFPC.

     The Transfer Agent Fees paid to LFS and the Trust Company for 2002 under
each transfer agent agreement were $1,046,458 for the Common Stock Fund,
$1,793,363 for the Growth Fund, $517,140 for the International Stock Fund,
$1,248,738 for the Special Fund, $1,088,066 for the Small Cap Fund, $1,098,945
for the Real Estate Fund, $68,286 for the Technology Fund, $389,408 for the
Strategic Value Fund, $1,163,211 for the Balanced Fund, $125,799 for the Short
Term Bond Fund, $530,913 for the Fixed Income Securities Fund, $231,904 for the
Oregon Municipal Bond Fund, $463,722 for the High Yield Fund, $1,167,436 for the
Columbia Daily Income Company and $6,698 for the Columbia National Municipal
Bond Fund. The Transfer Agent Fees paid to the Trust Company were for services
performed from January 1, 2002-October 18, 2002. The Transfer Agent Fees paid to
the Trust Company were for services performed from January 1, 2002-October 18,
2002. The Transfer Agent Fees paid to LFS were for services performed from
October 21, 2002-December 31, 2002.

     The Adviser performs certain administrative services for the Funds pursuant
to a Pricing, Bookkeeping and Fund Administration Agreement (the "Agreement").
Under the terms of the Agreement, the Adviser (a) provides fund accounting
oversight of State Street Bank and Trust, who provides the daily fund accounting
services; (b) maintains and preserves in a secure manner the accounting records
of the Funds; (c) provides fund administration, including daily prospectus,
investment restrictions and 1940 Act compliance review, tax and distribution
management, expense budgeting, performance reporting and statistical analysis,
financial reporting and board reporting; and (d) provides disaster planning. For
the services rendered by the Adviser, each Fund has agreed to pay, on a monthly
basis, a fee equal to 1/12 of .01 of 1 percent of the Fund's average daily net
assets. The fee for a Fund in a given year shall not be less than $25,000 or
exceed $150,000. The effective date of this agreement was July 1, 2002. The
amount paid under the Agreement to each of the Funds is set forth in the Funds'
Annual Report, which is incorporated by reference into this Statement of
Additional Information.

     Liberty Funds Distributor, Inc. ("LFD"), a registered securities broker and
a member of the National Association of Securities Dealers, Inc., whose address
is One Financial Center Boston, MA 02111-2621, is the principal underwriter for
the Funds, and is authorized under a distribution agreement with each Fund to
sell shares of the Fund. LFD has no obligation to buy the Funds' shares, and
purchases the Funds' shares only upon receipt of orders from authorized
financial services firms ("FSFs") or investors.

     For the year ended December 31, 2002, the following sales charges were paid
by shareholders in respect to Class A and D Shares:

                                             Class A             Class D
     Columbia Common Stock Fund              $28                 $25
     Columbia Growth Fund                    $209                $727
     Columbia International Stock Fund       $1,083              $391
     Columbia Special Fund                   $1,911              $1,670
     Columbia Real Estate Equity Fund        $8,850              $3,507
     Columbia Technology Fund                --                  --
     Columbia Strategic Value Fund           --                  $112
     Columbia Balanced Fund                  --                  $4,560
     Columbia Short Term Bond Fund           $57,528             $46,560
     Columbia Fixed Income Securities Fund   $18,748             $3,026
     Columbia National Municipal Bond Fund   $474                $47
     Columbia Oregon Municipal Bond Fund     $13,688             $4,783
     Columbia High Yield Fund                $186,189            $140,212

     For the year ended December 31, 2002, LFD, as Distributor, retained the
following fees:



                                                 FRONT-END SALES CHARGE            CONTINGENT DEFERRED SALES CHARGE
                                                        CLASS A                CLASS B          CLASS D          CLASS G

                                                                                                     
Columbia Common Stock Fund                                 $4                   $250              --               --
Columbia Growth Fund                                      $27                    --               --             $2,921
Columbia International Stock fund                         $156                 $2,725             $34              --
Columbia Special Fund                                     $252                 $1,757             --               $59
Columbia Real Estate Equity Fund                         $1,257                  --               --               --
Columbia Technology Fund                                   --                    --               --               --
Columbia Strategic Value Fund                             $47                   $853              --               --
Columbia Balanced Fund                                     --                   $250              --               --
Columbia Short Term Bond Fund                            $6,688                 $718              $92              --
Columbia Fixed Income Securities Fund                    $2,252                  $83              --               --
Columbia National Municipal Bond Fund                      $5                    --               --               --
Columbia Oregon Municipal Bond Fund                       $584                 $2,476            $246              --
Columbia High Yield Fund                                $10,152                $1,194             $2               --


     The Adviser, LFD and LFS are wholly owned subsidiaries of Columbia
Management Group, Inc., which is an indirect wholly owned subsidiary of
FleetBoston Financial Corporation ("Fleet"). The Trust Company is a
majority-owned subsidiary of the Adviser, with the remaining interest in the
Trust Company owned by Fleet National Bank, a wholly owned subsidiary of Fleet.
Fleet and its affiliates provide a wide range of banking, financial, and
investment products and services to individuals and businesses. Their principal
activities include customer and commercial banking, mortgage lending and
servicing, trust administration, investment management, retirement plan
services, brokerage and clearing services, securities underwriting, private and
corporate financing and advisory activities, and insurance services.

- --------------------------------------------------------------------------------
                             PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------

     Each Fund, other than the Strategic Value Fund, will not generally invest
in securities for short-term capital appreciation but, when business and
economic conditions, market prices, or the Fund's investment policy warrant,
individual security positions may be sold without regard to the length of time
they have been held. This may result in a higher portfolio turnover rate and
increase a Fund's transaction costs, including brokerage commissions. To the
extent short-term trades result in gains on securities held less than one year,
shareholders will be subject to taxes at ordinary income rates. See "TAXES" in
this Statement of Additional Information.

     The Funds may purchase their portfolio securities through a securities
broker and pay the broker a commission, or they may purchase the securities
directly from a dealer which acts as principal and sells securities directly for
its own account without charging a commission. The purchase price of securities
purchased from dealers serving as market makers will include the spread between
the bid and asked prices. The Funds may also purchase securities from
underwriters, the price of which will include a commission or discount paid by
the issuer to the underwriter. There is generally no stated commission in the
case of fixed income securities that are traded in the over-the-counter market,
but the price paid by a Fund usually includes an undisclosed dealer commission
or mark-up.

     Prompt execution of orders at the most favorable price will be the primary
consideration of the Funds in transactions where fees or commissions are
involved. Additional factors considered by the Adviser in selecting brokers to
execute a transaction include the: (i) professional capability of the executing
broker and the value and quality of the brokerage services provided; (ii) size
and type of transaction; (iii) timing of transaction in the context of market
prices and trends; (iv) nature and character of markets for the security to be
purchased or sold; (v) the broker's execution efficiency and settlement
capability; (vi) the broker's experience and financial stability and the
execution services it renders to the Adviser on a continuing basis; and (vii)
reasonableness of commission.

    Research, statistical, and other services offered by the broker also may be
taken into consideration in selecting broker-dealers. These services may
include: advice concerning the value of securities, the advisability of
investing in, purchasing, or selling securities, and the availability of
securities or the purchasers or sellers of securities; and furnishing analyses
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategies, and performance of accounts. A commission in
excess of the amount of a commission another broker or dealer would have charged
for effecting a transaction may be paid by a Fund if the Adviser determines in
good faith that the commission is reasonable in relation to the value of the
brokerage and research services provided, viewed in terms of either that
particular transaction or management's overall responsibilities with respect to
the Fund.

     The Adviser receives a significant amount of proprietary research from a
number of brokerage firms, in most cases on an unsolicited basis. The Adviser
does not make any commitments to allocate brokerage for proprietary research.
The value of that research, however, is considered along with other factors in
the selection of brokers. This research is considered supplemental to the
Adviser's own internal research and does not, therefore, materially reduce the
overall expenses incurred by the Adviser for its research. On a semi-annual
basis, the Adviser's research analysts and portfolio managers participate in a
detailed internal survey regarding the value of proprietary research and the
skills or contributions made by the various brokerage analysts to the Adviser's
investment process. Firms are then confidentially ranked based on that survey.
Brokerage allocations are then made, as much as reasonably possible, based on
those rankings.

     The Adviser may use a Fund's commissions to acquire third party research or
products that are not available through its full-service brokers. In these
arrangements, the Adviser pays an executing broker a commission equal to the
average rate paid on all other trades and achieves what it believes is best
execution on the trade. The executing broker then uses a portion of the
commission to pay for a specific research service or product provided to the
Adviser. Proposed research to be acquired in this manner must be approved by the
Adviser's Soft Dollar Committee which is responsible for determining that the
research provides appropriate assistance to the Adviser in connection with its
investment management of the Funds and that the price paid with broker
commissions is fair and reasonable.

     The receipt of proprietary and third party research services or products
from brokers or dealers might be useful to the Adviser and its affiliates in
rendering investment management services to the Funds or other clients.
Conversely, research provided by brokers or dealers who have executed orders on
behalf of other clients of the Adviser and its affiliates might be useful to the
Adviser in carrying out its obligations to a Fund.

     Total brokerage commissions paid (agency and principal trades) by each of
the respective Funds for each of the last three years were:

FUND                                      2002           2001            2000

Common Stock Fund                     $ 2,465,789    $ 2,813,448     $ 2,743,215
Fixed Income Securities Fund          $   745,452    $   660,869     $   622,625
Growth Fund                           $ 6,505,327    $ 6,623,384     $ 6,799,260
High Yield Fund                       $ 2,715,011    $ 1,389,576     $   249,391
International Stock Fund              $   697,867    $ 1,047,040     $ 1,571,272
National Municipal Bond Fund          $    17,425    $     8,965     $     9,432
Short Term Bond Fund                  $   263,996    $    86,638     $    54,643
Special Fund                          $ 3,522,189    $ 6,056,391     $ 8,136,389
Small Cap Fund                        $ 4,531,782    $ 4,315,800     $ 3,951,660
Real Estate Fund                      $   490,061    $ 1,799,984     $   833,591
Balanced Fund                         $ 2,712,568    $ 2,815,421     $ 2,530,596
Technology Fund*                      $   324,907    $   200,011     $     -
Strategic Value Fund*                 $ 2,535,318    $ 1,274,234     $     -

*These Funds commenced operations November 9, 2000.

     No brokerage commissions were paid by the Columbia Daily Income Company or
the Oregon Municipal Bond Fund during the last three years. Of the commissions
paid in 2002, the Common Stock Fund paid $266,634, the Growth Fund paid
$466,284, the Special Fund paid $163,520, the Small Cap Fund paid $197,653, the
Balanced Fund paid $268,650, the Real Estate Fund paid $33,755, the Strategic
Value Fund paid $160,633, and the Technology Fund paid $30,200 to acquire
third-party research or products.

     Provided each Fund's Board of Directors is satisfied that the Fund is
receiving the most favorable price and execution available, the Adviser may
consider the sale of the Fund's shares as a factor in the selection of brokerage
firms to execute its portfolio transactions. The placement of portfolio
transactions with brokerage firms who sell shares of a Fund is subject to rules
adopted by the National Association of Securities Dealers, Inc. The Adviser may
use research services provided by and allocate purchase and sale orders for
portfolio securities to certain financial institutions, including, to the extent
permitted by law or order of the SEC, financial institutions that are affiliated
with the Adviser, if the Adviser believes that the quality of the transaction
and the commission are comparable to what they would be with other qualified
brokerage firms. During the years listed, the Fund periodically used Robertson
Stephens and Fleet Institutional Trading, affiliated broker-dealers of the
Adviser, to execute purchase and sale orders. The aggregate dollar amount of
brokerage commissions paid to Robertson Stephens for the years 2000, 2001, and
2002 were as follows:

                              2002           2001          2000

Small Cap Fund              $     0        $    300      $ 20,364
Balanced Fund               $ 9,330        $  6,300      $  1,200
Special Fund                $     0        $  7,312      $ 64,806
Growth Fund                 $ 3,460        $ 28,880      $ 37,290
Real Estate Equity Fund     $     0        $ 15,612      $  8,658
Strategic Value Fund*       $11,510        $  2,400            --
Common Stock Fund           $ 2,020        $      0      $      0

- ------------
* This Fund commenced operations November 9, 2000.

     The aggregate dollar amount of brokerage commissions paid to Fleet
Institutional Trading for 2002 is as follows:

                                                     2002
                                                     ----
                    Balanced Fund                   $   750
                    Strategic Value Fund            $23,875
                    Common Stock Fund               $ 1,000

     For all years, the aggregate dollar amount of purchase and sale
transactions and total broker commissions were less than 1% of each Fund's total
purchase and sale transactions and broker commissions. In addition to agency
transactions, the Funds may purchase securities from an underwriting syndicate
in which an affiliate is a member of the underwriting syndicate. Such trades
will be executed in accordance with the rules and regulations of the 1940 Act,
as well as procedures adopted by the Funds.

     Buy and sell orders of a Fund may be aggregated by the Adviser with other
trades made at the regional trading desk at which the trade is completed with
those of other Funds or accounts or other investment pools managed by the
Adviser or affiliates of the Adviser to achieve best execution, and, on the
average, lower brokerage commission costs. Orders are aggregated only if the
Adviser, in the exercise of its investment discretion, believes such aggregation
is consistent with its duty to seek best execution and if each client involved
in the order is treated fairly and on an equitable basis. Each client that
participates in an aggregated order will typically participate at the average
share price for all transactions in that order, with all transaction costs
shared on a pro rata basis. Absent unusual circumstances, an aggregated order
that is only partially completed by the Adviser will be allocated to each client
on a pro rata basis based on the percentage of the combined order actually
filled. Notwithstanding the above, the Adviser may execute buy and sell orders
for clients and take action in performance of its duties with respect to any of
its clients that may differ from actions taken with respect to another client
with similar investment policies and objectives, so long as the Adviser shall,
to the extent practical, allocate investment opportunities to clients over a
period of time on a fair and equitable basis and in accordance with applicable
law.

     Allocations among accounts managed by the Adviser of investments in initial
and secondary public offerings ("IPOs and "SPOs," jointly "POs") are made
pursuant to Guidelines (the "Guidelines") established by the Adviser. The
Guidelines establish which accounts are eligible to participate in a particular
PO and what level of participation is permitted. After eligible accounts are
identified, each manager receives, on behalf of his or her accounts, a pro rata
share of such allocation. The allocation by the manager among his or her
accounts is further divided among such accounts on a pro rata basis. A manager
may decline to participate in an offering, or may elect to not have all accounts
participate, even if his or her accounts are eligible to participate pursuant to
the guidelines if he or she believes that the PO is not appropriate for his or
her accounts or an individual account. A manager who declines to participate
must document the basis of his or her decision not to participate. Over time,
allocations to eligible accounts for which an PO opportunity is appropriate will
be made on a fair and equitable basis.

     The Adviser, LFD and the Funds maintain a Code of Ethics pursuant to Rule
17j-1 under the 1940 Act (the "Ethics Code") that sets forth general and
specific standards relating to the securities trading activities of all their
employees. The Ethics Code does not prohibit employees from purchasing
securities that may be purchased or held by the Funds, but is intended to ensure
that all employees conduct their personal transactions in a manner that does not
interfere with the portfolio transactions of the Funds or the Adviser's other
clients or take unfair advantage of their relationship with the Adviser. The
specific standards in the Ethics Code include, among others, a requirement that
trades of all access persons be pre-cleared; a prohibition on investing in
initial public offerings; required pre-approval of an investment in private
placements; a prohibition on portfolio managers trading in a security five days
before or after a trade in the same security by an account over which the
manager exercises investment discretion; and a prohibition on realizing any
profit on the trading of a security held less than 30 days. Certain securities
and transactions, such as mutual fund shares or U.S. Treasuries and purchases of
options on securities indexes or securities under an automatic dividend
reinvestment plan, are exempt from the restrictions in the Ethics Code because
they present little or no potential for abuse. In addition to the trading
restrictions, the Ethics Code contains reporting obligations that are designed
to ensure compliance and allow the Adviser's Ethics Committee to monitor that
compliance.

     The Adviser and the Funds have also adopted a Policy and Procedures
Designed to Detect and Prevent Insider Trading (the "Insider Trading Policy").
The Insider Trading Policy prohibits any employee from trading, either
personally or on behalf of others (including a client account), on the basis of
material nonpublic information. All employees are required to certify each year
that they have read and complied with the provisions of the Ethics Code and the
Insider Trading Policy.

- --------------------------------------------------------------------------------
                       CAPITAL STOCK AND OTHER SECURITIES
- --------------------------------------------------------------------------------

     Each Fund is an Oregon corporation and was organized in the year set forth
below opposite its name.

FUND                                             DATE

Common Stock Fund                                1991
Growth Fund                                      1967
International Stock Fund                         1992
Special Fund                                     1985
Small Cap Fund                                   1996
Real Estate Fund                                 1994
Technology Fund                                  2000
Strategic Value Fund                             2000
Balanced Fund                                    1991
Short Term Bond Fund                             1986
Fixed Income Securities Fund                     1983
National Municipal Bond Fund                     1999
Oregon Municipal Bond Fund                       1984
High Yield Fund                                  1993
Columbia Daily Income Company                    1974

     Each Fund offers some or all of the following classes of shares pursuant to
a Rule 18f-3 Plan (the "Plan") adopted by the Directors in accordance with the
Investment Company Act of 1940 (the "Act"): Class A, B, D, G, T and Z. Shares of
each class of a Fund represent an equal pro rata interest in the Fund and,
generally, have identical voting, dividend, liquidation, and other relative
rights, preferences, limitations, and terms and conditions, except that: (1)
each class has a different designation, (2) each class of shares bears any
expenses attributable to a class as set forth in the Plan and the relevant
Prospectus, (3) each class has exclusive voting rights on any matter submitted
to shareholders that relates solely to it or its distribution and service plan
adopted under Rule 12b-1, if any, and (4) each class has separate voting rights
on any matter submitted to shareholders in which the interests of one class
differ from the interests of any other class. In addition, each class has the
particular features described below. The differences among the classes of the
Funds are subject to change by action of the Board of Directors of each Fund and
to the extent permitted by the 1940 Act and each Fund's articles of
incorporation and bylaws. All issued and outstanding shares of a Fund are fully
paid and nonassessable. Shares have no preemptive rights. Fractional shares have
the same rights proportionately as full shares. The shares of a Fund do not have
cumulative voting rights, which means that the holders of more than 50 percent
of the shares of the Fund, voting for the election of directors, can elect all
the directors.

     Except as indicated in Appendix I, Class G shares of a Fund (other than the
Columbia Growth Fund) automatically convert into Class T shares of the same Fund
at the time disclosed in the relevant Fund's Prospectus for Class T and G
shares. Class G shares of the Columbia Growth Fund automatically convert into
Class A shares of that Fund at the time disclosed in the Fund's Prospectus for
Class G shares. Class B shares automatically convert into Class A shares of the
same Fund at the time disclosed in the relevant Fund's Prospectus for Class A, B
and D shares.

     Shares of Class A, D and T shares are offered with a front-end sales
charge, payable at the time of purchase, unless waived as set forth in the
Prospectus for such Fund. Class B and G shares are offered without a front-end
sales charge, but are subject to a contingent deferred sales charge depending on
the length of time the shares are held. Class A, D and T shares held for fewer
than 18 months (12 months in the case of Class D) after purchase are subject to
a 1.00% contingent deferred sales charge. A detailed description of these
various sales charges can be found in the Prospectus for the relevant class.
Class T shares received in connection with a fund merger are subject to a
contingent deferred sales charge if redeemed within 12 months of the original
purchase.

     Any reference to the phrase "vote of a majority of the outstanding voting
securities of the Fund" means the vote at any meeting of shareholders of a Fund
of (i) 67 percent or more of the shares present or represented by proxy at the
meeting, if the holders of more than 50 percent of the outstanding shares are
present or represented by proxy, or (ii) more than 50 percent of the outstanding
shares, whichever is less.

- --------------------------------------------------------------------------------
                           DISTRIBUTION AND SERVICING
- --------------------------------------------------------------------------------

RULE 12B-1 DISTRIBUTION PLAN

     The Directors have approved a plan pursuant to Rule 12b-1 under the 1940
Act (the "12b-1 Plan") for the Funds' Class A, B, D and G shares. Under the
12b-1 Plan, each Fund pays LFD a monthly service fee at an annual rate of up to
0.25% of the Fund's net assets attributed to Class A, B and D shares. Each Fund
may also pay LFD monthly a distribution fee of an annual rate of 0.10% of daily
net assets attributed to Class A shares and up to 0.75% of the Fund's average
daily net assets attributable to Class B and D shares. The Funds' Board of
Directors currently limits payments under the 12b-1 Plan for Class A shares to
0.25% annually. Also under the 12b-1 Plan, the Columbia Growth Fund, Columbia
Special Fund and Columbia Short Term Bond Fund pay LFD a monthly service fee at
an annual rate of up to 0.50% of the Fund's net assets attributed to Class G
shares, made up of up to 0.25% for certain shareholder services ("Shareholder
Liaison Services") and up to 0.25% for administrative services ("Administrative
Support Services"). The Columbia Growth Fund, Columbia Special Fund and Columbia
Short Term Bond Fund also pay LFD monthly a distribution fee at an annual rate
of up to 0.65% of the Fund's average daily net assets attributed to Class G
shares.

     LFD has also voluntarily agreed to waive a portion of the Columbia Short
Term Bond Fund Class D distribution fees so that these fees do not exceed 0.40%
annually of the Class D's average daily net assets. For the Columbia National
Municipal Fund and Columbia Oregon Municipal Bond Fund, LFD has voluntarily
agreed to waive a portion of its Class D distribution fees so that these fees do
not exceed 0.65% annually of Class D's average daily net assets. For the
Columbia Fixed Income Securities Fund and Columbia High Yield Fund, the
Distributor has voluntarily agreed to waive a portion of its Class D
distribution fees so that these fees do not exceed 0.85% annually of the Class
D's average daily net assets.

     The monthly service and distribution fees shall be used by LFD to cover
expenses and activities primarily intended to result in the sale of Fund shares.
These expenses and activities may include but are not limited to: (a) direct
out-of-pocket promotional expenses incurred by LFD in advertising and marketing
Fund shares; (b)expenses incurred in connection with preparing, printing,
mailing, and distributing or publishing advertisements and sales literature; (c)
expenses incurred in connection with printing and mailing prospectuses and
Statements of Additional Information to other than current shareholders; (d)
periodic payments or commissions to one or more securities dealers, brokers,
financial institutions and other industry professionals ("Service
Organizations") with respect to the Funds' shares beneficially owned by
customers for whom the Service Organization is the shareholder of record; (e)
the direct and indirect cost of financing the payments or expenses included in
(a) and (d) above; or (f) such other services as may be construed by any court
or governmental agency or commission, including the SEC, to constitute
distribution services under the 1940 Act or rules and regulations thereunder.

     Shareholder Liason Services may include the following services provided by
financial services firms ("FSFs"): (a) aggregating and processing purchase and
redemption requests and placing net purchase and redemption orders with LFD; (b)
processing dividend payments; (c) providing sub-accounting with respect to Class
T shares or the information necessary for sub-accounting; and (d) providing
periodic mailings to customers. Administrative Support Services may include the
following services provided by FSFs: (a) providing customers with information as
to their positions in Class G shares; (b) responding to customer inquiries; and
(c) providing a service to invest the assets of customers in Class G shares.

     LFD may use the entire amount of such fees to defray the cost of
commissions and service fees paid to FSFs and for certain other purposes. Since
the distribution and service fees are payable regardless of LFD's expenses, LFD
may realize a profit from the fees. The 12b-1 Plan authorizes the Adviser to
make payments out of its own funds for distribution or services costs.

     At this time, the total Class G service and distribution fees have been
limited to 0.95% for the Growth Fund and Special Fund and 0.80% for the Short
Term Bond Fund. These limitations may be modified or terminated by the Board of
Directors at any time.

SHAREHOLDER SERVICES PLAN

     The Board of Directors has approved a Shareholder Services Plan (the
"Services Plan") for Class T shares of the Columbia Special Fund and the
Columbia Short Term Bond Fund. Under the Services Plan, these two Funds may pay
FSFs a monthly service fee up to an annual rate of 0.50% of the Fund's net
assets attributed to Class T shares beneficially owned by the customers of the
FSFs, made up of 0.25% for Shareholder Liaison Services and 0.25% for
Administrative Support Services, to compensate FSFs for providing services to
beneficial owners of Class T shares. At this time, the fees payable by the
holders of Class T shares pursuant to the Services Plan have been limited to
0.30% for the Columbia Special Fund and 0.15% for the Columbia Short Term Bond
Fund. The Services Plan provides that the FSFs will waive the fees to the extent
that net investment income attributable to Class T shares earned in the
applicable period is less than the fees due for such period.

TERMS OF THE 12B-1 AND SERVICES PLAN

     LFD has advised the Funds that the 12b-1 Plan and the Services Plan could
be significant factors in the growth and retention of the Funds' assets,
resulting in a more advantageous expense ratio, increased investment flexibility
and a greater ability to attract and retain research and portfolio management
talent, which could benefit each class of the Funds' shareholders. The 12b-1
Plan and the Services Plan will continue in effect from year to year so long as
their continuance is specifically approved at least annually by a vote of the
Directors, including the Directors who are not interested persons of a Fund and
have no direct or indirect financial interest in the operation of the 12b-1 Plan
or the Services Plan or in any related agreements ("Independent Directors"),
and, with respect to the 12b-1 Plan, cast in person at a meeting called for the
purpose. All material amendments of the 12b-1 Plan or the Services Plan must be
approved by the Directors in the manner provided in the foregoing sentence. The
12b-1 Plan may not be amended to increase the fee materially without approval by
vote of a majority of the outstanding voting securities of the relevant class of
shares. The 12b-1 Plan and the Services Plan may be terminated at any time by
vote of a majority of the Independent Directors or, with respect to the 12b-1
Plan, by vote of a majority of the outstanding voting securities of the relevant
class of shares. The continuance of the 12b-1 Plan and the Services Plan will
only be effective if the selection and nomination of the Directors who are not
interested persons of the Funds is effected by such Independent Directors.

     The Funds' 12b-1 Plan monthly service and distribution fees paid to LFD for
the period ended December 31, 2002 are:



                                                         SERVICE FEE                                  DISTRIBUTION FEE
                                         CLASS A    CLASS B      CLASS D    CLASS G     CLASS T     CLASS B      CLASS D     CLASS G

                                                                                                      
Columbia Common Stock Fund                 $1          $23          $7         --          --         $69          $22          --
Columbia Growth Fund                      $486         $20          $7       $4,689        --         $60          $21        $3,772
Columbia International Stock Fund        $7,932       $4,334       $226        --          --       $13,000       $677          --
Columbia Special Fund                     $165         $483        $85        $126       $4,340      $1,449       $255         $274
Columbia Real Estate Equity Fund          $146         $198        $84         --          --         $594        $252          --
Columbia Technology Fund                   $1           $1          $1         --          --          $1          $1           --
Columbia Strategic Value Fund            $21,940       $911        $148        --          --        $2,732       $443          --
Columbia Balanced Fund                     $18         $103        $90         --          --         $309        $269          --
Columbia Short Term Bond Fund             $877        $1,123      $1,113      $178       $2,924      $3,368      $3,336        $771
Columbia Fixed Income Securities Fund      $94         $239        $83         --          --         $716        $250          --
Columbia National Municipal Bond Fund      $12         $15         $12         --          --         $45          $35          --
Columbia Oregon Municipal Bond Fund        $68         $95         $126        --          --         $285        $378          --
Columbia High Yield Fund                 $4,520       $3,146      $3,030       --          --        $9,437      $9,091         --


         SALES-RELATED EXPENSES of LFD relating to the Funds were:

COLUMBIA COMMON STOCK FUND                                           Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                              
Fees to FSFs                                                 $1                 $3,979                 $24
Allocated cost of sales material relating to the             $4                  $203                  $8
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                    $6                  $277                  $11
expenses


COLUMBIA GROWTH FUND                                                 Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares       Class G Shares
                                                                                                              
Fees to FSFs                                                $492                $3,450                $716                $4,405
Allocated cost of sales material relating to the            $532                 $174                 $180                $4,256
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                   $724                 $237                 $244                $5,789
expenses


COLUMBIA INTERNATIONAL STOCK FUND                                    Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                             
Fees to FSFs                                               $17,280              $16,309               $465
Allocated cost of sales material relating to the           $6,111               $6,262                $494
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                  $8,312               $8,519                $671
expenses


COLUMBIA SPECIAL FUND                                                Year Ended December 31, 2002
                                                      Class A      Class B     Class D      Class G      Class T
                                                       Shares       Shares       Shares      Shares       Shares
                                                                                             
Fees to FSFs                                           $4,770       $6,350       $1,709       $376          $0
Allocated cost of sales material relating to the       $3,198       $3,973        $646        $481        $1,184
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other              $4,349       $5,405        $879        $654        $1,610
expenses


COLUMBIA REAL ESTATE EQUITY FUND                                     Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                            
Fees to FSFs                                                $113                $42,651              $3,538
Allocated cost of sales material relating to the           $1,964               $2,510                $877
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                  $2,671               $3,414               $1,192
expenses


COLUMBIA TECHNOLOGY FUND                                            Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                              
Fees to FSFs                                                 $0                   $0                   $0
Allocated cost of sales material relating to the             $1                   $15                  $0
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                    $1                   $20                  $0
expenses


COLUMBIA STRATEGIC VALUE FUND                                       Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                             
Fees to FSFs                                               $11,681              $11,504               $117
Allocated cost of sales material relating to the           $7,192               $2,887                $335
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                  $9,782               $3,927                $456
expenses


COLUMBIA BALANCED FUND                                              Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                            
Fees to FSFs                                                 $12                $20,522              $4,635
Allocated cost of sales material relating to the            $189                $1,265               $1,126
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                   $258                $1,721               $1,532
expenses


COLUMBIA SHORT TERM BOND FUND                                        Year Ended December 31, 2002
                                                      Class A      Class B     Class D      Class G      Class T
                                                      --------     --------    --------     --------     -------
                                                       Shares       Shares       Shares      Shares       Shares
                                                                                             
Fees to FSFs                                           $6,140      $180,471     $39,483       $431          $0
Allocated cost of sales material relating to the      $12,426       $11,521     $11,382       $273        $3,894
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other             $16,901       $15,670     $15,481       $372        $5,296
expenses


COLUMBIA FIXED INCOME SECURITIES FUND                                Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                            
Fees to FSFs                                                 $70                $36,595              $2,981
Allocated cost of sales material relating to the           $2,280               $2,491                $752
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other expenses         $3,101               $3,389               $1,023


COLUMBIA NATIONAL MUNICIPAL BOND FUND                               Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                             
Fees to FSFs                                               $21,292              $1,679                $506
Allocated cost of sales material relating to the             $30                  $77                 $121
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                    $40                 $105                 $165
expenses


COLUMBIA OREGON MUNICIPAL BOND FUND                                Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                            
Fees to FSFs                                                 $50                $16,434              $4,542
Allocated cost of sales material relating to the           $1,168               $1,003               $1,140
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                  $1,589               $1,365               $1,551
expenses


COLUMBIA HIGH YIELD FUND                                           Year Ended December 31, 2002
                                                       Class A Shares       Class B Shares       Class D Shares
                                                                                           
Fees to FSFs                                               $89,351             $518,822             $165,253
Allocated cost of sales material relating to the           $78,557              $34,148              $41,368
Fund (including printing, mailing and other
promotion expenses)
Allocated travel, entertainment and other                 $106,874              $46,445              $56,265
expenses


- --------------------------------------------------------------------------------
                   PURCHASE, REDEMPTION AND PRICING OF SHARES
- --------------------------------------------------------------------------------

PURCHASES AND REDEMPTIONS

     A detailed discussion of how you may purchase, redeem and exchange each
class of shares in a Fund is discussed in the Prospectus applicable to such
class. The following information and policies are supplemental to that found in
the applicable Prospectus.

     Each Fund will generally accept unconditional orders for shares to be
executed at the public offering price based on the NAV per share next determined
after the order is placed in good order. The public offering price is the NAV
plus the applicable sales charge, if any. In the case of orders for purchase of
shares placed through FSFs, the public offering price will be determined on the
day the order is placed in good order, but only if the FSF receives the order
prior to the time at which shares are valued and transmits it to a Fund before
the Fund processes that day's transactions. If the FSF fails to transmit before
a Fund processes that day's transactions, the customer's entitlement to that
day's closing price must be settled between the customer and the FSF. If the FSF
receives the order after the time at which the Fund values its shares, the price
will be based on the NAV determined as of the close of the New York Stock
Exchange ("Exchange") on the next day it is open. If funds for the purchase of
shares are sent directly to LFS, they will be invested at the public offering
price next determined after receipt in good order. Payment for shares of a Fund
must be in U.S. dollars; if made by check, the check must be drawn on a U.S.
bank.

     Each Fund receives the entire NAV of shares sold. For shares subject to an
initial sales charge, LFD's commission is the sales charge shown in the Fund's
Prospectus less any applicable FSF discount. The FSF discount is the same for
all FSFs, except that LFD retains the entire sales charge on any sales made to a
shareholder who does not specify a FSF on the Investment Account Application
("Application"), and except that LFD may from time to time reallow additional
amounts to all or certain FSFs. LFD generally retains some or all of any
asset-based sales charge (distribution fee) or contingent deferred sales charge.
Such charges generally reimburse LFD for any up-front and/or ongoing commissions
paid to FSFs.

     Checks presented for the purchase of shares of a Fund which are returned by
the purchaser's bank or checkwriting privilege checks for which there are
insufficient funds in a shareholder's account to cover redemption will subject
such purchaser or shareholder to a $15 service fee for each check returned.
Checks must be drawn on a U.S. bank and must be payable in U.S. dollars.

     LFS acts as the shareholder's agent whenever it receives instructions to
carry out a transaction on the shareholder's account. Upon receipt of
instructions that shares are to be purchased for a shareholder's account, the
designated FSF will receive the applicable sales commission. Shareholders may
change FSFs at any time by written notice to LFS, provided the new FSF has a
sales agreement with LFD.

     Shares credited to an account are transferable upon written instructions in
good order to LFS and may be redeemed as described in the Prospectus.
Certificates will not be issued. Shareholders may send any certificates which
have been previously acquired to LFS for deposit to their account.

     LFD may, at its expense, provide special sales incentives (such as cash
payments in addition to the commissions specified in the Funds' applicable
Prospectus) to FSFs that agree to promote the sale of shares of the Funds or
other funds that LFD distributes. At its discretion, LFD may offer special sales
incentives only to selected FSFs or to FSFs who have previously sold or expect
to sell significant amounts of the Funds' shares.

SPECIAL PURCHASE PROGRAMS/INVESTOR SERVICES

     The following special purchase programs/investor services may be changed or
eliminated at any time.

     AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares of the
Funds may be purchased through the Automatic Investment Plan. Preauthorized
monthly electronic funds transfers for a fixed amount of at least $50 are used
to purchase a Fund's shares at the public offering price next determined after
LFD receives the proceeds from the transfer. If your Automatic Investment Plan
purchase is by electronic funds transfer, you may request the Automatic
Investment Plan purchase for any day. Further information and application forms
are available from FSFs or from LFD.

     AUTOMATED DOLLAR COST AVERAGING. The Automated Dollar Cost Averaging
program allows you to exchange $100 or more on a monthly basis from any mutual
fund distributed by LFD in which you have a current balance of at least $5,000
into the same class of shares of up to four other funds. Complete the Automated
Dollar Cost Averaging section of the Application. The designated amount will be
exchanged on the third Tuesday of each month. There is no charge for exchanges
made pursuant to the Automated Dollar Cost Averaging program. Exchanges will
continue so long as your Fund balance is sufficient to complete the transfers.
Your normal rights and privileges as a shareholder remain in full force and
effect. Thus you can buy any Fund, exchange between the same class of shares by
written instruction or by telephone exchange if you have so elected and withdraw
amounts from any Fund, subject to the imposition of any applicable CDSC.

     Any additional payments or exchanges into your Fund will extend the time of
the Automated Dollar Cost Averaging program.

     An exchange is generally a capital sale transaction for federal income tax
purposes. You may terminate your program, change the amount of the exchange
(subject to the $100 minimum), or change your selection of Funds, by telephone
or in writing; if in writing by mailing your instructions to Liberty Funds
Services, Inc. P.O. Box 1722, Boston, MA 02105-1722.

     You should consult your FSF to determine whether or not the Automated
Dollar Cost Averaging program is appropriate for you.

     TAX-SHELTERED RETIREMENT PLANS. LFD offers prototype tax-qualified plans,
including Individual Retirement Accounts (IRAs), and Pension and Profit-Sharing
Plans for individuals, corporations, employees and the self-employed. The
minimum initial Retirement Plan investment is $25. Columbia Trust Company serves
as Trustee of LFD prototype plans and charges a $20 annual fee. Detailed
information concerning these Retirement Plans and copies of the Retirement Plans
are available from LFD.

     Participants in non-LFD prototype Retirement Plans (other than IRAs) also
are charged a $10 annual fee unless the plan maintains an omnibus account with
LFS. Participants in LFD prototype Plans (other than IRAs) who liquidate the
total value of their account will also be charged a $15 close-out processing fee
payable to LFS. The fee is in addition to any applicable CDSC. The fee will not
apply if the participant uses the proceeds to open a LFD IRA Rollover account in
any Fund, or if the Plan maintains an omnibus account.

     Consultation with a competent financial and tax advisor regarding these
Plans and consideration of the suitability of Fund shares as an investment under
the Employee Retirement Income Security Act of 1974 or otherwise is recommended.

     TELEPHONE ADDRESS CHANGE SERVICES. By calling LFS, shareholders or their
FSF of record may change an address on a recorded telephone line. Confirmations
of address change will be sent to both the old and the new addresses. Telephone
redemption privileges are suspended for 30 days after an address change is
effected.

     CASH CONNECTION. Dividends and any other distributions, including
Systematic Withdrawal Plan (SWP) payments, may be automatically deposited to a
shareholder's bank account via electronic funds transfer. Shareholders wishing
to avail themselves of this electronic transfer procedure should complete the
appropriate sections of the Application.

     AUTOMATIC DIVIDEND DIVERSIFICATION. The automatic dividend diversification
reinvestment program (ADD) generally allows shareholders to have all
distributions from a Fund automatically invested in the same class of shares of
another Fund. An ADD account must be in the same name as the shareholder's
existing open account with the particular Fund. Call LFS for more information at
1-800-422-3737 or, if you are a Class Z shareholder, at 1-800-338-2550.

PROGRAMS FOR REDUCING OR ELIMINATING SALES CHARGES

     LFD offers several plans by which an investor may obtain reduced initial or
contingent deferred sales charges. These plans may be altered or discontinued at
any time.

     NAV TRANSFER PROGRAM (CLASS A ONLY). Investors who have previously
purchased shares of other investment companies offered by another mutual fund
complex and have been charged a front-end load or other sales charge on such
purchases may invest the proceeds of redemptions of those shares in Class A
shares of the Fund, without incurring an additional sales charge. Class A shares
may be subject to a 12b-1 distribution and service fee. This NAV transfer
program shall be available for purchases by eligible investors through
participating FSFs until December 31, 2003.

     RIGHT OF ACCUMULATION (CLASS A, B AND T ONLY). Reduced sales charges on
Class A, B and T shares can be effected by combining a current purchase with
prior purchases of shares of all classes of the funds distributed by LFD. The
applicable sales charge is based on the combined total of:

     1. The current purchase; and

     2. The value at the public offering price at the close of business on the
previous day of all shares (of any class) of funds distributed by LFD held by
the shareholder, the shareholder's spouse or the shareholder's minor children
(except shares of any money market fund, unless such shares were acquired by
exchange from Class A or Class T shares of another non-money market fund).

     LFD must be promptly notified of each purchase which entitles a shareholder
to a reduced sales charge. Such reduced sales charge will be applied upon
confirmation of the shareholder's holdings by LFS. A Fund may terminate or amend
this Right of Accumulation.

     STATEMENT OF INTENT (CLASS A AND CLASS T SHARES ONLY). Any person may
qualify for reduced sales charges on purchases of Class A and T shares made
within a thirteen-month period pursuant to a Statement of Intent ("Statement").
A shareholder may include, as an accumulation credit toward the completion of
such Statement, the value of all shares (of any class) of funds distributed by
LFD held by the shareholder on the date of the Statement (except shares of any
money market fund, unless such shares were acquired by exchange from Class A or
Class T shares of another non-money market fund). The value is determined at the
public offering price on the date of the Statement. Purchases made through
reinvestment of distributions do not count toward satisfaction of the Statement.

     During the term of a Statement, LFS will hold shares in escrow to secure
payment of the higher sales charge applicable to Class A or Class T shares
actually purchased. Dividends and capital gains will be paid on all escrowed
shares and these shares will be released when the amount indicated has been
purchased. A Statement does not obligate the investor to buy or a Fund to sell
the amount of the Statement.

     If a shareholder exceeds the amount of the Statement and reaches an amount
which would qualify for a further quantity discount, a retroactive price
adjustment will be made at the time of expiration of the Statement. The
resulting difference in offering price will purchase additional shares for the
shareholder's account at the applicable offering price. As a part of this
adjustment, the FSF shall return to LFD the excess commission previously paid
during the thirteen-month period.

     If the amount of the Statement is not purchased, the shareholder shall
remit to LFD an amount equal to the difference between the sales charge paid and
the sales charge that should have been paid. If the shareholder fails within
twenty days after a written request to pay such difference in sales charge, LFS
will redeem that number of escrowed Class A shares to equal such difference. The
additional amount of FSF discount from the applicable offering price shall be
remitted to the shareholder's FSF of record.

     Additional information about and the terms of Statements of Intent are
available from your FSF, or from LFS at 1-800-345-6611.

     REINSTATEMENT PRIVILEGE. An investor who has redeemed Class A, B, D, G
or T shares may, upon request, reinstate within one year a portion or all of the
proceeds of such sale in shares of Class A of any Fund at the NAV next
determined after LFS receives a written reinstatement request and payment.
Investors who desire to exercise this privilege should contact their FSF or LFS.
Shareholders may exercise this privilege an unlimited number of times. Exercise
of this privilege does not alter the Federal income tax treatment of any capital
gains realized on the prior sale of Fund shares, but to the extent any such
shares were sold at a loss, some or all of the loss may be disallowed for tax
purposes. Consult your tax advisor.

     PRIVILEGES OF FINANCIAL SERVICES FIRMS. Class A shares of certain Funds may
be sold at NAV to registered representatives and employees of FSFs (including
their affiliates) that are parties to dealer agreements or other sales
arrangements with LFD; and such persons' families and their beneficial accounts.

     PRIVILEGES OF CERTAIN SHAREHOLDERS. Any shareholder eligible to buy Class Z
shares may purchase Class A shares of any fund distributed by LFD at NAV in
those cases where a Class Z share is not available. Qualifying shareholders will
not be subject to any Class A initial sales charge or CDSC; however, they will
be subject to the annual Rule 12b-1 service fee.

     EXCHANGES FOR AFFILIATES OF LFD. Clients of affiliates of LFD who have
previously purchased shares of other investment companies distributed by LFD and
have been charged a front-end load or other sales charge on such purchases may
exchange those shares for Class A shares of any funds distributed by LFD,
without incurring an additional front-end load or sales charge for those
exchanged shares. Certain funds may charge an annual 12b-1 distribution and
service fee.

     SPONSORED ARRANGEMENTS. Class A shares of the Funds may be purchased at a
reduced or no sales charge pursuant to sponsored arrangements, which include
programs under which an organization makes recommendations to, or permits group
solicitation of, its employees, members or participants in connection with the
purchase of shares of a Fund on an individual basis. The amount of the sales
charge reduction will reflect the anticipated reduction in sales expense
associated with sponsored arrangements. The reduction in sales expense, and
therefore the reduction in sales charge, will vary depending on factors such as
the size and stability of the organization's group, the term of the
organization's existence and certain characteristics of the members of its
group. The Funds reserve the right to revise the terms of or to suspend or
discontinue sales pursuant to sponsored plans at any time.

     WAIVER OF CONTINGENT DEFERRED SALES CHARGES ("CDSCS") (CLASSES A, B, D, G
AND T, EXCEPT AS NOTED) CDSCs may be waived on redemptions in the following
situations with the proper documentation:

     1. Death. CDSCs may be waived on redemptions within one year (no such limit
for G and T shares) following the death of (i) the sole shareholder on an
individual account, (ii) a joint tenant where the surviving joint tenant is the
deceased's spouse (no spousal requirement for G and T shares), or (iii) the
beneficiary of a Uniform Gifts to Minors Act (UGMA), Uniform Transfers to Minors
Act (UTMA) or other custodial account. If, upon the occurrence of one of the
foregoing, the account is transferred to an account registered in the name of
the deceased's estate, the CDSC will be waived on any redemption from the estate
account occurring within one year after the death. If the shares are not
redeemed within one year of the death (except for G and T shares), they will
remain subject to the applicable CDSC, when redeemed from the transferee's
account. If the account is transferred to a new registration and then a
redemption is requested, the applicable CDSC will be charged.

     2. Systematic Withdrawal Plan (SWP). CDSCs may be waived on redemptions
occurring pursuant to a monthly, quarterly or semi-annual SWP established with
LFS, to the extent the redemptions do not exceed, on an annual basis, 12% of the
account's value, so long as at the time of the first SWP redemption the account
had had distributions reinvested for a period at least equal to the period of
the SWP (e.g., if it is a quarterly SWP, distributions must have been reinvested
at least for the three-month period prior to the first SWP redemption).
Otherwise, CDSCs will be charged on SWP redemptions until this requirement is
met; this requirement does not apply if the SWP is set up at the time the
account is established, and distributions are being reinvested. See below under
"How to Sell Shares - Systematic Withdrawal Plan."

     3. Disability. CDSCs may be waived on redemptions occurring within one year
after the sole shareholder on an individual account or a joint tenant on a
spousal joint tenant account becomes disabled (as defined in Section 72(m)(7) of
the Code). To be eligible for such waiver, (i) the disability must arise AFTER
the purchase of shares AND (ii) the disabled shareholder must have been under
age 65 at the time of the initial determination of disability. If the account is
transferred to a new registration and then a redemption is requested, the
applicable CDSC will be charged.

     4. Death of a trustee. CDSCs may be waived on redemptions occurring upon
dissolution of a revocable living or grantor trust following the death of the
sole trustee where (i) the grantor of the trust is the sole trustee and the sole
life beneficiary, (ii) death occurs following the purchase AND (iii) the trust
document provides for dissolution of the trust upon the trustee's death. If the
account is transferred to a new registration (including that of a successor
trustee), the applicable CDSC will be charged upon any subsequent redemption.

     5. Returns of excess contributions. CDSCs may be waived on redemptions
required to return excess contributions made to retirement plans or individual
retirement accounts, so long as the FSF agrees to return the applicable portion
of any commission paid by LFD.

     6. Qualified Retirement Plans. CDSCs may be waived on redemptions required
to make distributions from qualified retirement plans following normal
retirement (as stated in the document). CDSCs also will be waived on SWP
redemptions made to make required minimum distributions from qualified
retirement plans that have invested in funds distributed by LFD for at least two
years.

     The CDSC also may be waived where the FSF agrees to return all or an agreed
upon portion of the commission earned on the sale of the shares being redeemed.

HOW TO SELL SHARES

     Shares may also be sold on any day the Exchange is open, either directly to
a Fund or through the shareholder's FSF. Sale proceeds generally are sent within
seven days (usually on the next business day after your request is received in
good form). However, for shares recently purchased by check, a Fund may delay
selling your shares for up to 15 days in order to protect the Fund against
financial losses and dilution in net asset value caused by dishonored purchase
payment checks.

     To sell shares directly to a Fund, send a signed letter of instruction or
stock power form to LFS, along with any certificates for shares to be sold. The
sale price is the net asset value (less any applicable CDSC) next calculated
after a Fund receives the request in proper form. Signatures must be guaranteed
by a bank, a member firm of a national stock exchange or another eligible
guarantor institution. Stock power forms are available from FSFs, LFS and many
banks. Additional documentation is required for sales by corporations, agents,
fiduciaries, surviving joint owners and individual retirement account holders.
Call LFS for more information at 1-800-345-6611.

     FSFs must receive requests before the time at which a Fund's shares are
valued to receive that day's price. FSFs are responsible for furnishing all
necessary documentation to LFS and may charge for this service.

     SYSTEMATIC WITHDRAWAL PLAN. If a shareholder's account balance is at least
$5,000, the shareholder may establish a SWP. A specified dollar amount or
percentage of the then current net asset value of the shareholder's investment
in any Fund designated by the shareholder will be paid monthly, quarterly or
semi-annually to a designated payee. The amount or percentage the shareholder
specifies generally may not, on an annualized basis, exceed 12% of the value, as
of the time the shareholder makes the election, of the shareholder's investment.
Withdrawals from Class B and Class D shares of the Fund under a SWP will be
treated as redemptions of shares purchased through the reinvestment of Fund
distributions, or, to the extent such shares in the shareholder's account are
insufficient to cover Plan payments, as redemptions from the earliest purchased
shares of such Fund in the shareholder's account. No CDSCs apply to a redemption
pursuant to a SWP of 12% or less, even if, after giving effect to the
redemption, the shareholder's account balance is less than the shareholder's
base amount. Qualified plan participants who are required by Internal Revenue
Service regulation to withdraw more than 12%, on an annual basis, of the value
of their Class B and Class D share account may do so but will be subject to a
CDSC ranging from 1% to 5% of the amount withdrawn in excess of 12% annually. If
a shareholder wishes to participate in a SWP, the shareholder must elect to have
all of the shareholder's income dividends and other Fund distributions payable
in shares of the Fund rather than in cash.

     A shareholder or a shareholder's FSF of record may establish a SWP account
by telephone on a recorded line. However, SWP checks will be payable only to the
shareholder and sent to the address of record. SWPs from retirement accounts
cannot be established by telephone.

     A shareholder may not establish a SWP if the shareholder holds shares in
certificate form. Purchasing additional shares (other than through dividend and
distribution reinvestment) while receiving SWP payments is ordinarily
disadvantageous because of duplicative sales charges. For this reason, a
shareholder may not maintain a plan for the accumulation of shares of a Fund
(other than through the reinvestment of dividends) and a SWP at the same time.

     SWP payments are made through share redemptions, which may result in a gain
or loss for tax purposes, may involve the use of principal and may eventually
use up all of the shares in a shareholder's account.

     A Fund may terminate a shareholder's SWP if the shareholder's account
balance falls below $5,000 due to any transfer or liquidation of shares other
than pursuant to the SWP. SWP payments will be terminated on receiving
satisfactory evidence of the death or incapacity of a shareholder. Until this
evidence is received, LFS will not be liable for any payment made in accordance
with the provisions of a SWP.

     The cost of administering SWPs for the benefit of shareholders who
participate in them is borne by a Fund as an expense of all shareholders.

     Shareholders whose positions are held in "street name" by certain FSFs may
not be able to participate in a SWP. If a shareholder's Fund shares are held in
"street name," the shareholder should consult his or her FSF to determine
whether he or she may participate in a SWP.

     TELEPHONE REDEMPTIONS. All Fund shareholders and/or their FSFs are
automatically eligible to redeem up to $100,000 of the Fund's shares by calling
1-800-345-6611 toll-free any business day between 9:00 a.m. and the close of
trading of the Exchange (normally 4:00 p.m. Eastern time). Transactions received
after 4:00 p.m. Eastern time will receive the next business day's closing price.
Telephone redemptions are limited to a total of $100,000 in a 30-day period.
Redemptions that exceed $100,000 may be accomplished by placing a wire order
trade through a broker or furnishing a signature guarantee request. Telephone
redemption privileges for larger amounts may be elected on the Application. LFS
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. Telephone redemptions are not available on accounts with
an address change in the preceding 30 days and proceeds and confirmations will
only be mailed or sent to the address of record unless the redemption proceeds
are being sent to a pre-designated bank account. Shareholders and/or their FSFs
will be required to provide their name, address and account number. FSFs will
also be required to provide their broker number. All telephone transactions are
recorded. A loss to a shareholder may result from an unauthorized transaction
reasonably believed to have been authorized. No shareholder is obligated to
execute the telephone authorization form or to use the telephone to execute
transactions.

     CHECKWRITING (COLUMBIA DAILY INCOME FUND ONLY). Shares may be redeemed by
check if a shareholder has previously completed an Application and Signature
Card. LFS will provide checks to be drawn on Boston Safe Deposit and Trust
Company (the "Bank"). These checks may be made payable to the order of any
person in the amount of not less than $250 for shares of the Columbia Daily
Income Fund and not more than $100,000. The shareholder will continue to earn
dividends on shares until a check is presented to the Bank for payment. At such
time a sufficient number of full and fractional shares will be redeemed at the
next determined net asset value to cover the amount of the check. Certificate
shares may not be redeemed in this manner.

     Shareholders utilizing checkwriting drafts will be subject to the Bank's
rules governing checking accounts. There is currently no charge to the
shareholder for the use of checks, however, you may incur customary fees for
services such as a stop payment request or a request for copies of a check. The
shareholder should make sure that there are sufficient shares in his or her open
account to cover the amount of any check drawn since the net asset value of
shares will fluctuate. If insufficient shares are in the shareholder's open
account, the check will be returned marked "insufficient funds" and no shares
will be redeemed; the shareholder will be charged a $15 service fee for each
check returned. It is not possible to determine in advance the total value of an
open account because prior redemptions and possible changes in net asset value
may cause the value of an open account to change. Accordingly, a check
redemption should not be used to close an open account. In addition, a check
redemption, like any other redemption, may give rise to taxable capital gains.

     NON CASH REDEMPTIONS. For redemptions of any single shareholder within any
90-day period exceeding the lesser of $250,000 or 1% of a Fund's net asset
value, the Fund may make the payment or a portion of the payment with portfolio
securities held by that Fund instead of cash, in which case the redeeming
shareholder may incur brokerage and other costs in selling the securities
received.

DISTRIBUTIONS

     Distributions are invested in additional shares of the same class of a Fund
at net asset value unless the shareholder elects to receive cash. Regardless of
the shareholder's election, distributions of $10 or less will not be paid in
cash, but will be invested in additional shares of the same class of the Fund at
net asset value. Undelivered distribution checks returned by the post office
will be reinvested in your account. If a shareholder has elected to receive
dividends and/or capital gain distributions in cash and the postal or other
delivery service selected by LFS is unable to deliver checks to the
shareholder's address of record, such shareholder's distribution option will
automatically be converted to having all dividend and other distributions
reinvested in additional shares. No interest will accrue on amounts represented
by uncashed distribution or redemption checks. Shareholders may reinvest all or
a portion of a recent cash distribution without a sales charge. A shareholder
request must be received within 30 calendar days of the distribution. A
shareholder may exercise this privilege only once. No charge is currently made
for reinvestment.

     Shares of the Columbia Daily Income Fund will normally earn dividends
starting with the date the Fund receives payment for the shares and will
continue through the day before the shares are redeemed, transferred or
exchanged.

HOW TO EXCHANGE SHARES

     Shares of a Fund may be exchanged for the same class of shares of the other
continuously offered funds (with certain exceptions) distributed by LFD on the
basis of the NAVs per share at the time of exchange. Class D shares may be
exchanged for Class C shares. Class Z shares may be exchanged for Class A shares
of the other funds that are not offering Class Z shares. Class G shares can be
exchanged for Class B shares, but once exchanged into Class B cannot be
reexchanged back into Class G. Class T shares can be exchanged for Class A
shares, but once exchanged into Class A cannot be reexchanged back into Class T.
The prospectus of each Fund describes its investment objective and policies, and
shareholders should obtain a prospectus and consider these objectives and
policies carefully before requesting an exchange. Shares of certain of these
funds are not available to residents of all states. Consult LFS before
requesting an exchange.

     By calling LFS, shareholders or their FSF of record may exchange among
accounts with identical registrations, provided that the shares are held on
deposit. During periods of unusual market changes or shareholder activity,
shareholders may experience delays in contacting LFS by telephone to exercise
the telephone exchange privilege. Because an exchange involves a redemption and
reinvestment in another fund, completion of an exchange may be delayed under
unusual circumstances, such as if the fund suspends repurchases or postpones
payment for the Fund shares being exchanged in accordance with federal
securities law. LFS will also make exchanges upon receipt of a written exchange
request and share certificates, if any. If the shareholder is a corporation,
partnership, agent, or surviving joint owner, LFS will require customary
additional documentation. Prospectuses of the other funds are available from the
LFD Literature Department by calling 1-800-426-3750.

     A loss to a shareholder may result from an unauthorized transaction
reasonably believed to have been authorized. No shareholder is obligated to use
the telephone to execute transactions.

     If you are seeking to exchange Class A shares of your Fund for Class A
shares of another fund distributed by LFD, the fund into which you wish to
exchange may deny your exchange request if that fund has a higher maximum sales
charge and you have held your Class A shares for less than five months. Consult
your FSF or LFS. In all cases, the shares to be exchanged must be registered on
the records of the Fund in the name of the shareholder desiring to exchange.

     An exchange is generally a capital sale transaction for federal income tax
purposes. The exchange privilege may be revised, suspended or terminated at any
time.

     The Funds also reserve the right to close a shareholder account if the
shareholder's actions are deemed to be detrimental to the Fund or its
shareholders, including, without limitation, violating the exchange policy set
forth in its Prospectus. If a Fund redeems shares, payment will be made promptly
at the current net asset value. A redemption may result in a realized capital
gain or loss.

PRICING OF SHARES

     The net asset value ("NAV") per share of each Fund is determined by the
Adviser, under procedures approved by the directors, as of the close of regular
trading (normally 4:00 p.m. New York time) on each day the NYSE is open for
business and at other times determined by the directors. The NAV per share is
computed by dividing the value of all assets of the Fund, less its liabilities,
by the number of shares outstanding.

     A Fund may suspend the determination of the NAV of a Fund and the right of
redemption for any period (1) when the NYSE is closed, other than customary
weekend and holiday closings, (2) when trading on the NYSE is restricted, (3)
when an emergency exists as a result of which sale of securities owned by the
Fund is not reasonably practicable or it is not reasonably practicable for the
Fund to determine the value of the Fund's assets, or (4) as the SEC may by order
permit for the protection of security holders, provided the Fund complies with
rules and regulations of the SEC, which govern as to whether the conditions
prescribed in (2) or (3) exist. The NYSE observes the following holidays: New
Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas.

     For purposes of calculating the NAV of a Fund's shares, the following
procedures are utilized whenever applicable. Each Fund's equity securities are
valued at the last sale price on the securities exchange or national securities
markets at which such securities primarily are traded. Securities not listed on
an exchange or national securities market, or securities in which there were no
transactions, are valued using the last bid price. Each Fund purchasing debt
securities uses market value to value such securities as quoted by an
independent pricing service, dealers who are market makers in the securities or
by procedures and guidelines approved by the Funds' Board of Directors. Market
values are generally based on the average of bid and ask prices, or by reference
to other securities with comparable ratings, interest rates and maturities.
Certain securities for which daily market quotations are not readily available,
or for which the Adviser believes the quotations do not accurately value the
security in question, may be fair valued by the Adviser, pursuant to guidelines
established by the Funds' Board of Directors.

     Investments in the Columbia Daily Income Company and other temporary cash
investments are carried at values deemed best to reflect their fair values as
determined in good faith by the Adviser, under procedures adopted by the Funds'
Board of Directors. These values are based on cost, adjusted for amortization of
discount or premium and accrued interest, unless unusual circumstances indicate
that another method of determining fair value should be used.

     The value of assets or liabilities initially expressed in a foreign
currency will, on a daily basis, be converted into U.S. dollars. Foreign
securities will generally be valued based upon the most recent closing price on
their principal exchange, or based upon the most recent price obtained by the
Fund, if the security is not priced on an exchange, even if the close of that
exchange or price determination is earlier than the time of the Funds' NAV
calculation. In the case of such foreign security, if an event that is likely to
affect materially the value of a portfolio security occurs between the time the
foreign price is determined and the time the Fund's NAV is calculated, it may be
necessary to value the security in light of that event.

- --------------------------------------------------------------------------------
                                    CUSTODIAN
- --------------------------------------------------------------------------------

     State Street Bank and Trust Company (the "Custodian"), 225 Franklin Street,
Boston, Massachusetts 02101 acts as the Funds' general custodian, for both
domestic and foreign securities. Through June 2002, U.S. Bank N.A. acted as the
general custodian for the Funds (except the International Stock Fund) with
respect to domestic securities and J.P. Morgan Chase & Co. acted as the general
custodian for the International Stock Fund and provided custody services to
those Funds that invest in foreign securities. The Custodian holds securities
and cash of the Funds, receives and pays for securities purchased, delivers
against payment securities sold, receives and collects income from investments,
makes all payments covering expenses of the Funds, and performs other
administrative duties, all as directed by authorized officers of the Adviser.
The Custodian does not exercise any supervisory function in the purchase and
sale of portfolio securities or payment of dividends.

     Portfolio securities purchased in the United States are maintained in the
custody of the Custodian. Portfolio securities purchased outside the United
States by the Funds are maintained in the custody of foreign banks, trust
companies, or depositories that have sub-custodian arrangements with the
Custodian (the "foreign sub-custodians"). Each of the domestic and foreign
custodial institutions that may hold portfolio securities of the Funds has been
approved by the Board of Directors of the Funds or, in the case of foreign
securities, by the Custodian, as a delegate of the Board of Directors, all in
accordance with regulations under the 1940 Act.

     The Adviser determines whether it is in the best interest of the Funds and
their shareholders to maintain a Fund's assets in each of the countries in which
the Fund invests ("Prevailing Market Risk"). The review of Prevailing Market
Risk includes an assessment of the risk of holding a Fund's assets in a country,
including risks of expropriation or imposition of exchange controls. In
evaluating the foreign sub-custodians, the Board of Directors, or its delegate,
will review the operational capability and reliability of the foreign
sub-custodian. With respect to foreign investments and the selection of foreign
sub-custodians, however, there is no assurance that the Funds, and the value of
their shares, will not be adversely affected by acts of foreign governments,
financial or operational difficulties of the foreign sub-custodians,
difficulties and cost of obtaining jurisdiction over, or enforcing judgments
against, the foreign sub-custodians, or the application of foreign law to a
Fund's foreign sub-custodial arrangement. Accordingly, an investor should
recognize that the risks involved in holding assets abroad are greater than
those associated with investing in the United States.





- --------------------------------------------------------------------------------
                             INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

     The financial statements of each Fund for the year ended December 31, 2002,
the selected per share data and ratios under the caption "Financial Highlights,"
and the report of PricewaterhouseCoopers LLP, independent accountants, are
included in the 2002 Annual Report to Shareholders of the Funds.
PricewaterhouseCoopers LLP, 1300 S.W. Fifth Avenue, Suite 3100, Portland, Oregon
97201, in addition to examining the financial statements of the Funds, assists
in the preparation of the tax returns of the Funds and in certain other matters.


- --------------------------------------------------------------------------------
                                      TAXES
- --------------------------------------------------------------------------------

FEDERAL INCOME TAXES

     Each Fund intends and expects to meet continuously the tests for
qualification as a regulated investment company under Part I of Subchapter M of
the Code. Each Fund believes it satisfies the tests to qualify as a regulated
investment company. If a Fund were to fail to qualify as a "regulated investment
company" in any year, it would incur a regular federal corporate income tax on
all of its taxable income, whether or not distributed, and distributions would
generally be taxable as ordinary dividend income to the shareholders.

     To qualify as a regulated investment company for any taxable year, each
Fund must, among other things:

     (a) derive at least 90 percent of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities, or foreign currencies, or other income
(including but not limited to gains from options, futures, or forward contracts)
derived with respect to its business of investing in such stock, securities, or
currencies (the "90 Percent Test"); and

     (b) diversify its holdings so that, at the end of each quarter of its
taxable year, (i) 50 percent or more of the value of the assets of the Fund
consists of cash, government securities, and other securities limited, in
respect of any one issuer of such other securities, to an amount not greater
than 5 percent of the value of the assets of the Fund and 10 percent of the
outstanding voting securities of such issuer, and (ii) not more than 25 percent
of the value of the assets of the Fund is invested in the securities (other than
government securities) of any one issuer or of two or more issuers that the Fund
"controls" within the meaning of Section 851 of the Code and that meet certain
requirements (the "Diversification Test"). In addition, a Fund must file, or
have filed, a proper election with the Internal Revenue Service.

     Part I of Subchapter M of the Code will apply to a Fund during a taxable
year only if it meets certain additional requirements. Among other things, the
Fund must: (a) have a deduction for dividends paid (without regard to capital
gain dividends) at least equal to the sum of 90 percent of its investment
company taxable income (computed without any deduction for dividends paid) and
90 percent of its tax-exempt interest in excess of certain disallowed deductions
(unless the Internal Revenue Service waives this requirement), and (b) either
(i) have been subject to Part I of Subchapter M for all taxable years ending
after November 8, 1983 or (ii) as of the close of the taxable year have no
earnings and profits accumulated in any taxable year to which Part I of
Subchapter M did not apply.

     A regulated investment company that meets the requirements described above
is taxed only on its "investment company taxable income," which generally equals
the undistributed portion of its ordinary net income and any excess of net
short-term capital gain over net long-term capital loss. In addition, any excess
of net long-term capital gain over net short-term capital loss that is not
distributed is taxed to a Fund at corporate capital gain tax rates. The policy
of each Fund is to apply capital loss carry-forwards as a deduction against
future capital gains before making a capital gain distribution to shareholders.
Under rules that are beyond the scope of this discussion, certain capital losses
and certain net foreign currency losses resulting from transactions occurring in
November and December of a taxable year may be taken into account either in that
taxable year or in the following taxable year.

     If any net long-term capital gains in excess of net short-term capital
losses are retained by a Fund, requiring federal income taxes to be paid thereon
by the Fund, the Fund may elect to treat such capital gains as having been
distributed to shareholders. In the case of such an election, shareholders will
be taxed on such amounts as long-term capital gains, will be able to claim their
proportional share of the federal income taxes paid by the Fund on such gains as
credits against their own federal income tax liabilities, and generally will be
entitled to increase the adjusted tax basis of their shares in the Fund by the
differences between their pro rata shares of such gains and their tax credits.

     SPECIAL ASPECTS OF 90 PERCENT TEST WITH RESPECT TO FOREIGN CURRENCY. For
purposes of the 90 Percent Test, foreign currency gains that are not directly
related to a Fund's principal business of investing in stocks or securities (or
options and futures with respect to stock or securities) may be excluded from
qualifying income by regulation. No such regulations, however, have been issued.

     Unless an exception applies, a Fund may be required to recognize some
income with respect to foreign currency contracts under the mark-to-market rules
of Section 1256 even though that income is not realized. Special rules under
Sections 1256 and 988 of the Code determine the character of any income, gain,
or loss on foreign currency contracts.

     Two possible exceptions to marking-to-market relate to hedging transactions
and mixed straddles. A hedging transaction is defined for purposes of Section
1256 as a transaction (1) that a Fund properly identifies as a hedging
transaction, and (2) that is entered into in the normal course of business
primarily to manage the risk of price changes or currency fluctuations with
respect to the Fund's investments. A mixed straddle is a straddle where (1) at
least one (but not all) of the straddle positions are Section 1256 contracts and
(2) the Fund properly identifies each position forming part of the straddle. A
straddle for these purposes generally is offsetting positions with respect to
personal property. A Fund holds offsetting positions generally if there is a
substantial diminution of the Fund's risk of loss from holding a position by
reason of its holding one or more other positions.

     OREGON MUNICIPAL BOND FUND AND NATIONAL MUNICIPAL BOND FUND. In certain
cases, Subchapter M permits the character of tax-exempt interest received and
distributed by a regulated investment company to flow through for federal tax
purposes as tax-exempt interest to its shareholders, provided that 50 percent or
more of the value of its assets at the end of each quarter is invested in
municipal bonds. For purposes of this Statement of Additional Information, the
term "municipal bonds" refers to obligations that pay interest that is
tax-exempt under Section 103 of the Code. For purposes of this Statement of
Additional Information, the term "tax-exempt interest" refers to interest that
is not includable in gross income for federal income tax purposes. As discussed
below, however, tax-exempt interest may result in an increase in the taxes of
the recipient because of the alternative minimum tax, the environmental tax, the
branch profits tax, or under other provisions of the Code that are beyond the
scope of this Statement of Additional Information. The Oregon Municipal Bond
Fund and the National Municipal Bond Fund intend to have at least 50 percent of
the value of their total assets at the close of each quarter of their taxable
year consist of obligations the interest on which is not includable in gross
income for federal income tax purposes under Section 103 of the Code. As a
result, the Oregon Municipal Bond Fund's and the National Municipal Bond Fund's
dividends payable from net tax-exempt interest earned from municipal bonds
should qualify as exempt-interest dividends.

     Distributions properly designated by the Oregon Municipal Bond Fund and the
National Municipal Bond Fund as representing net tax-exempt interest received on
municipal bonds (including municipal bonds of Guam, Puerto Rico, and certain
other issuers) will not be includable by shareholders in gross income for
federal income tax purposes (except for shareholders who are, or are related to,
"substantial users," as discussed below). Distributions representing net taxable
interest received by the Oregon Municipal Bond Fund and the National Municipal
Bond Fund from sources other than municipal bonds, representing the excess of
net short-term capital gain over net long-term capital loss, or representing
taxable accrued market discount on the sale or redemption of municipal bonds,
will be taxable to shareholders as ordinary income.

     Any capital loss realized upon the redemption of shares of the Oregon
Municipal Bond Fund and the National Municipal Bond Fund six months or less from
the date of purchase of the shares and following receipt of an exempt-interest
dividend will be disallowed to the extent of such exempt-interest dividend.
Section 852(b)(4) of the Code contains special rules on the computation of a
shareholder's holding period for this purpose.

     Dividends derived from any investments other than tax-exempt bonds and any
distributions of short-term capital gains are taxable to shareholders as
ordinary income. Any distributions of long-term capital gains will in general be
taxable to shareholders as long-term capital gains (generally subject to a
maximum 20% tax rate for shareholders who are individuals) regardless of the
length of time fund shares are held.

     A tax-exempt fund may at times purchase tax-exempt securities at a discount
and some or all of this discount may be included in the fund's ordinary income
which will be taxable when distributed. Any market discount recognized on a
tax-exempt bond purchased after April 30, 1993, with a term at time of issue of
one year or more is taxable as ordinary income. A market discount bond is a bond
acquired in the secondary market at a price below its "stated redemption price"
(in the case of a bond with original issue discount, its "revised issue price").

     Interest on indebtedness incurred or continued by shareholders to purchase
or carry shares of the Oregon Municipal Bond Fund and the National Municipal
Bond Fund will not be deductible for federal income tax purposes. Under rules
issued by the Internal Revenue Service, the purchase of such shares may be
considered to have been made with borrowed funds even though the borrowed funds
are not directly traceable to the purchase of shares. Special rules that are
beyond the scope of this Statement of Additional Information limit the deduction
of interest paid by financial institutions. Investors with questions regarding
these issues should consult their tax advisors.

     Dividends attributable to interest on certain private activity bonds issued
after August 7, 1986 will be items of tax preference and must be included in
alternative minimum taxable income for the purpose of determining liability, if
any, for the 26-28 percent alternative minimum tax for individuals and the 20
percent alternative minimum tax for corporations. Furthermore, the alternative
minimum taxable income for corporations includes an adjustment equal to 75
percent of the excess of "adjusted current earnings" over the corporation's
other federal alternative minimum taxable income (computed without regard to
"adjusted current earnings" and without regard to any "alternative tax net
operating loss"). See Section 56(g) of the Code. For the purpose of alternative
minimum tax for corporations, all exempt-interest dividends, less any interest
expense incurred to purchase or carry shares paying exempt interest dividends,
must be taken into account as "adjusted current earnings." In addition,
exempt-interest dividends paid to corporate investors may be subject to tax
under the environmental tax, which applies at the rate of 0.12 percent on the
excess of the "modified alternative minimum taxable income" of the corporation
over $2 million. See Section 59A of the Code.

     In some cases, exempt-interest dividends paid by the Oregon Municipal Bond
Fund and the National Municipal Bond Fund may indirectly affect the amount of
Social Security benefits or railroad retirement benefits that are taxable income
to an investor. See Section 86 of the Code.

     Certain foreign corporations may be subject to the "branch profits tax"
under Section 884 of the Code. The receipt of dividends from the Oregon
Municipal Bond Fund and the National Municipal Bond Fund may increase the
liability of the foreign corporation under the branch profits tax, even if such
dividends are generally tax-exempt.

     "Substantial users" (or persons related thereto) of facilities financed by
certain governmental obligations are not allowed to exclude from gross income
interest on such obligations. "Substantial user" is defined under U.S. Treasury
Regulations to include a non-exempt person (i) who regularly uses a part of such
facilities in his or her trade or business and whose gross revenues derived with
respect to the facilities financed by the issuance of bonds are more than 5% of
the total revenues derived by all users of such facilities, (ii) who occupies
more than 5% of the usable area of such facilities or (iii) for whom such
facilities or a part thereof were specifically constructed, reconstructed or
acquired. "Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners, and an S corporation and its
shareholders. No investigation as to the substantial users of the facilities
financed by bonds in the Oregon Municipal Bond Fund's and the National Municipal
Bond Fund's portfolios will be made by the Oregon Municipal Bond Fund and the
National Municipal Bond Fund. Potential investors who may be, or may be related
to, substantial users of such facilities should consult their tax advisors
before purchasing shares of the Oregon Municipal Bond Fund or the National
Municipal Bond Fund.

     At the respective times of issuance of the municipal bonds, opinions
relating to the validity thereof and to the exemption of interest thereon from
federal income tax generally were or will be rendered by bond counsel engaged by
the respective issuing authorities. The Oregon Municipal Bond Fund and the
National Municipal Bond Fund will not make any review of the issuance of the
municipal bonds or of the basis for such opinions. An opinion concerning
tax-exempt interest generally assumes continuing compliance with applicable
standards and restrictions. Certain circumstances or actions by an issuer after
the date of issuance can cause interest on municipal bonds to become includable
in gross income. In some cases, the interest on such bonds could become taxable
from the date of issuance. The Oregon Municipal Bond Fund and the National
Municipal Bond Fund will not monitor any issuers or any municipal bonds to
attempt to ensure that the interest remains tax-exempt.

     If either the Oregon Municipal Bond Fund or the National Municipal Bond
Fund declares dividends attributable to taxable interest it has received, it
intends to designate as taxable the same percentage of the day's dividend that
the actual taxable income earned on that day bears to total income earned on
that day. Thus, the percentage of the dividend designated as taxable, if any,
may vary from day to day.

     Shares of the Oregon Municipal Bond Fund and the National Municipal Bond
Fund generally would not be a suitable investment for a tax-exempt institution,
a tax-exempt retirement plan, or an individual retirement account. To the extent
that such an entity or account is tax-exempt, no additional benefit would result
from receiving tax-exempt dividends.

     From time to time, proposals have been introduced before Congress to
restrict or eliminate the federal income tax exemption for interest on municipal
bonds. Similar proposals may be introduced in the future. If such a proposal
were enacted, the availability of municipal bonds for investment by the Oregon
Municipal Bond Fund and the National Municipal Bond Fund and the value of
portfolio securities held by the these Funds would be affected.

     OTHER FUNDS. Shareholders of Funds other than the Oregon Municipal Bond
Fund and the National Municipal Bond Fund are taxed on distributions of net
investment income, or of any excess of net short-term capital gain over net
long-term capital loss, as ordinary income. Income distributions to corporate
shareholders from the Common Stock Fund, the Growth Fund, the Strategic Value
Fund, the International Stock Fund, the Special Fund, and the Balanced Fund may
qualify, in whole or part, for the federal income tax dividends-received
deduction, depending on the amount of qualifying dividends received by the Fund.
Qualifying dividends may include those paid to a Fund by domestic corporations
but do not include those paid by foreign corporations. The dividends-received
deduction equals 70 percent of qualifying dividends received from a Fund by a
shareholder, and is subject to a holding period requirement. In addition,
qualifying dividends are includable in adjusted current earnings for purposes of
computing the corporate alternative minimum tax. However, distributions from the
Columbia Daily Income Company, the Fixed Income Securities Fund, the Short Term
Bond Fund and the High Yield Fund are unlikely to so qualify because the income
of these Funds consists largely or entirely of interest rather than dividends.
In addition, to the extent the Real Estate Fund's income is derived from
interest and distributions from real estate investment trusts ("REITs"),
distributions from that Fund will not qualify for the dividends-received
deduction. Distributions of any excess of net long-term capital gain over net
short-term capital loss from a Fund are ineligible for the dividends-received
deduction.

     GENERAL CONSIDERATIONS. Distributions from a Fund (other than
exempt-interest dividends) will be taxable to shareholders as ordinary income to
the extent derived from the Fund's investment income and net short-term gains.
Distributions properly designated by any Fund as representing the excess of net
long-term capital gain over net short-term capital loss are taxable to
shareholders at the applicable long-term capital gains rate, regardless of the
length of time the shares of the Fund have been held by shareholders. For
noncorporate taxpayers, the highest rate that applies to long-term capital gains
is lower than the highest rate that applies to ordinary income. Any loss that is
realized and allowed on redemption of shares of the Fund six months or less from
the date of purchase of the shares and following the receipt of a capital gain
dividend will be treated as a long-term capital loss to the extent of the
capital gain dividend. For this purpose, Section 852(b)(4) of the Code contains
special rules on the computation of a shareholder's holding period.

     The sale, exchange or redemption of Fund shares may give rise to a gain or
loss. In general, any gain realized upon a taxable disposition of shares will be
treated as long-term capital gain if the shares have been held for more than 12
months. Otherwise the gain on the sale, exchange or redemption of shares will be
treated as short-term capital gain. In general, any loss realized upon a taxable
disposition of shares will be treated as long-term loss if the shares have been
held more than 12 months, and otherwise as a short-term loss. However, any loss
realized upon a taxable disposition of shares held for six months or less will
be treated as long-term, rather than short-term, capital loss to the extent of
any long-term capital gain distributions received by the shareholder with
respect to those shares. All or a portion of any loss realized upon a taxable
disposition of shares will be disallowed if other shares are purchased within 30
days before or after the disposition. In such a case, the basis of the
newly-purchased shares will be adjusted to reflect the disallowed loss.

     A portion of the income distributions from the Real Estate Fund will
include a tax return of capital because of the nature of the distributions
received by the Fund from its holdings in REITs. A tax return of capital is a
nontaxable distribution that reduces the tax cost basis of your shares in the
Real Estate Fund. The effect of a return of capital is to defer your tax
liability on that portion of your income distributions until you sell your
shares of the Real Estate Fund. There is no recognition of gain or loss unless
the return of capital exceeds the cost basis in the shares.

     Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of capital. Such distributions are likely to
occur in respect of shares purchased at a time when a Fund's net asset value
reflects gains that are either unrealized, or realized but not distributed. Such
realized gains may be required to be distributed even when a Fund's net asset
value also reflects unrealized losses.

     Distributions of taxable net investment income and net realized capital
gains will be taxable as described above, whether paid in shares or in cash.
Each distribution is accompanied by a brief explanation of the form and
character of the distribution. Within 60 days after the close of each calendar
year, each Fund issues to each shareholder a statement of the federal income tax
status of all distributions, including a statement of the prior calendar year's
distributions which the Fund has designated to be treated as long-term capital
gain and, in the case of the Oregon Municipal Bond Fund and the National
Municipal Bond Fund, as tax-exempt interest, or in the case of the Real Estate
Fund, as a tax return of capital. The ratio of tax-exempt income to total net
investment income earned during the year may be substantially different from the
ratio of tax-exempt income to total net investment income earned during any
particular portion of the year. Thus, a shareholder who holds shares for only a
part of the year may be allocated more or less tax-exempt dividends than would
be the case if the allocation were based on the ratio of tax-exempt income to
total net investment income actually earned while a shareholder.

     A distribution may be taxable to a shareholder even if the distribution
reduces the net asset value of the shares held below their cost (and is in an
economic sense a return of the shareholder's capital). This tax result is most
likely when shares are purchased shortly before an annual distribution of
capital gains or other earnings. This tax result is extremely unlikely in the
case of the Columbia Daily Income Company, which distributes its earnings daily
and has few or no capital gains.

     Each Fund is generally required to obtain from its shareholders a
certification of the shareholder's taxpayer identification number and certain
other information. Each Fund generally will not accept an investment to
establish a new account that does not comply with this requirement. With respect
to payments made in 2003 and 2004, if a shareholder fails to certify such number
and other information, or upon receipt of certain notices from the Internal
Revenue Service, the Fund may be required to withhold 30 percent of any
reportable interest or dividends, or redemption proceeds, payable to the
shareholder, and to remit such sum to the Internal Revenue Service, for credit
toward the shareholder's federal income taxes. A shareholder's failure to
provide a social security number or other tax identification number may subject
the shareholder to a penalty of $50 imposed by the Internal Revenue Service. In
addition, that failure may subject the Fund to a separate penalty of $50. This
penalty will be charged against the shareholder's account, which will be closed.
Closure of the account may result in a capital gain or loss.

     If a Fund declares a dividend in October, November, or December payable to
shareholders of record on a certain date in such a month and pays the dividend
during January of the following year, the shareholders will be taxed as if they
had received the dividend on December 31 of the year in which the dividend was
declared. Thus, a shareholder may be taxed on the dividend in a taxable year
prior to the year of actual receipt.

     A special tax may apply to a Fund if it fails to make enough distributions
during the calendar year. The required distributions for each calendar year
generally equal the sum of (a) 98 percent of the ordinary income for the
calendar year plus (b) 98 percent of the capital gain net income for the
one-year period that ends on October 31 during the calendar year (or for the
calendar year itself if the Fund so elects), plus (c) an adjustment relating to
any shortfall for the prior taxable year. If the actual distributions are less
than the required distributions, a tax of 4 percent applies to the shortfall. A
Fund may utilize earnings and profits distributed to shareholders on redemptions
made during the year in determining the actual distributions made to the
shareholders for that year.

     The Code allows the deduction by certain individuals, trusts, and estates
of "miscellaneous itemized deductions" only to the extent that such deductions
exceed 2 percent of adjusted gross income. The limit on miscellaneous itemized
deductions will not apply, however, with respect to the expenses incurred by any
"publicly offered regulated investment company." Each Fund believes that it is a
publicly offered regulated investment company because its shares are
continuously offered pursuant to a public offering (within the meaning of
Section 4 of the Securities Act of 1933, as amended). Therefore, the limit on
miscellaneous itemized deductions should not apply to expenses incurred by any
of the Funds.

     The Funds may purchase zero coupon bonds (or other discounted debt
securities) and payment-in-kind ("PIK") bonds. With respect to zero coupon
bonds, a Fund recognizes original-issue-discount income ratably over the life of
the bond even though the Fund receives no payments on the bond until the bond
matures. With respect to PIK bonds, a Fund recognizes interest income equal to
the fair market value of the bonds distributed as interest. Because a Fund must
distribute 90 percent of its income to remain qualified as a registered
investment company, a Fund may be forced to liquidate a portion of its portfolio
(possibly at a time when it is not advantageous to do so) to generate cash to
distribute to its shareholders with respect to original-issue-discount income
from zero coupon bonds and interest income from PIK bonds.

     A Fund's transactions in foreign currencies, foreign currency-denominated
debt securities, certain foreign currency options, futures contracts and forward
contracts (and similar instruments) may give rise to ordinary income or loss to
the extent such income or less results from fluctuations in the value of the
foreign currency concerned.

FOREIGN INCOME TAXES

     The International Stock Fund invests in the securities of foreign
corporations and issuers. To a lesser extent, the Common Stock Fund, the Growth
Fund, the Special Fund, the Small Cap Fund, the Real Estate Fund, the Technology
Fund, the Strategic Value Fund, the Balanced Fund, and the High Yield Fund may
also invest in such foreign securities. Foreign countries may impose income
taxes, generally collected by withholding, on foreign-source dividends and
interest paid to a Fund. These foreign taxes will reduce a Fund's distributed
income and a Fund's return. The Funds generally expect to incur, however, no
foreign income taxes on gains from the sale of foreign securities.

     The United States has entered into income tax treaties with many foreign
countries to reduce or eliminate the foreign taxes on certain dividends and
interest received from corporations in those countries. The Funds intend to take
advantage of such treaties where possible. It is impossible to predict with
certainty in advance the effective rate of foreign taxes that will be paid by a
Fund since the amount invested in particular countries will fluctuate and the
amounts of dividends and interest relative to total income will fluctuate.

     U.S. FOREIGN TAX CREDITS OR DEDUCTIONS FOR SHAREHOLDERS OF THE
INTERNATIONAL STOCK FUND. Section 853 of the Code allows a regulated investment
company to make a special election relating to foreign income taxes if more than
50 percent of the value of the company's total assets at the close of its
taxable year consists of stock or securities in foreign corporations and the
company satisfies certain holding period requirements. The International Stock
Fund generally expects, if necessary, to qualify for and to make the election
permitted under Section 853 of the Code. Although the International Stock Fund
intends to meet the requirements of the Code to "pass through" such foreign
taxes, there can be no assurance that the Fund will be able to do so. The
International Stock Fund will elect under Section 853 of the Code only if it
believes that it is in the best interests of its shareholders to do so. None of
the other Columbia Funds that may invest in foreign securities will qualify
under Section 853 of the Code.

     If the International Stock Fund elects pursuant to Section 853,
shareholders of that Fund will be required to include in income (in addition to
other taxable distributions) and will be allowed a credit or deduction for,
their pro rata portions of the qualifying income taxes paid by the Fund to
foreign countries. A shareholder's use of the credits resulting from the
election will be subject to limits of Section 904 of the Code, including a
holding period requirement. In general, those limits will prevent a shareholder
from using foreign tax credits to reduce U.S. taxes on U.S. source income. Each
shareholder should discuss the use of foreign tax credits and the Section 904
limits with the shareholder's tax adviser.

     No deduction for foreign taxes may be claimed under the Code by individual
shareholders who do not elect to itemize deductions on their federal income tax
returns, although such a shareholder may claim a credit for foreign taxes and in
any event will be treated as having taxable income in the amount of the
shareholder's pro rata share of foreign taxes paid by the Fund.

     Each year, the International Stock Fund will provide a statement to each
shareholder showing the amount of foreign taxes for which a credit or a
deduction may be available.

     INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANIES. Investment by a Fund in
certain "passive foreign investment companies" ("PFICs") could subject the Fund
to a U.S. federal income tax (including interest charges) on distributions
received from the company or on proceeds received from the disposition of shares
in the company, which tax cannot be eliminated by making distributions to fund
shareholders. However, the Fund may be able to elect to treat a PFIC as a
"qualified electing fund," in which case the Fund will be required to include
its share of the company's income and net capital gain annually, regardless of
whether it receives any distribution from the company. Alternatively, the Fund
may make an election to mark the gains (and, to a limited extent, losses) in
such holdings "to the market" as though it had sold and repurchased its holdings
in those PFICs on the last day of the Fund's taxable year. Such gains and losses
are treated as ordinary income and loss. The qualified electing fund and
mark-to-market elections may have the effect of accelerating the recognition of
income (without the receipt of cash) and increasing the amount required to be
distributed for the Fund to avoid taxation. Making either of these elections
therefore may require a Fund to liquidate other investments (including when it
is not advantageous to do so) in order to meet its distribution requirement,
which also may accelerate the recognition of gain and affect a Fund's total
return. It is anticipated that any taxes on a Fund with respect to investments
in PFICs would be insignificant.

INVESTMENTS IN REAL ESTATE INVESTMENT TRUSTS THAT INVEST IN REMICS

     The Real Estate Fund, and to a lesser extent certain other Funds (see
"INVESTMENTS HELD AND INVESTMENT PRACTICES BY THE FUND"), may invest in REITs
that hold residual interests in real estate mortgage investment conduits
("REMICs"). Under Treasury regulations that have not yet been issued, but may
apply retroactively, a portion of the Real Estate Fund's income from a REIT that
is attributable to the REIT's residual interest in a REMIC (referred to in the
Code as an "excess inclusion") will be subject to federal income tax in all
events. These regulations are also expected to provide that excess inclusion
income of a regulated investment company, such as the Real Estate Fund, will be
allocated to shareholders of the regulated investment company in proportion to
the dividends received by such shareholders, with the same consequences as if
the shareholders held the related REMIC residual interest directly. In general,
excess inclusion income allocated to shareholders (i) cannot be offset by net
operating losses (subject to a limited exception for certain thrift
institutions), (ii) will constitute unrelated business taxable income to
entities (including a qualified pension plan, an individual retirement account,
a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax on
unrelated business income, thereby potentially requiring such an entity that is
allocated excess inclusion income, and otherwise might not be required to file a
tax return, to file a tax return and pay tax on such income, and (iii) in the
case of a foreign shareholder, will not qualify for any reduction in U.S.
federal withholding tax. In addition, if at any time during any taxable year a
"disqualified organization" (as defined in the Code) is a record holder of a
share in a regulated investment company, then the regulated investment company
will be subject to a tax equal to that portion of its excess inclusion income
for the taxable year that is allocable to the disqualified organization,
multiplied by the highest federal income tax rate imposed on corporations. The
Real Estate Fund does not intend to invest in REITs, a substantial portion of
the assets of which consists of residual interests in REMICs.

STATE INCOME TAXES

     FUNDS THAT INVEST IN U.S. GOVERNMENT SECURITIES. Many states grant tax-free
status to dividends paid to shareholders of mutual funds from interest income
earned by the fund from direct obligations of the U.S. government. Investments
in mortgage-backed securities (including GNMA, FNMA and FHLMC securities) and
repurchase agreements collateralized by U.S. government securities do not
qualify as direct federal obligations in most states. Shareholders should
consult with their own tax advisors about the applicability of state and local
intangible property, income or other taxes to their fund shares and
distributions and redemption proceeds received from the Fund.

     NATIONAL MUNICIPAL BOND FUND. Distributions from this Fund may be exempt
from the income tax of a state, if the distributions are derived from tax-exempt
interest paid on the municipal securities of that state or its political
subdivisions. Those distributions may not be exempt from another state's income
tax, however. In addition, distributions derived from capital gains generally
will be subject to state income tax. Shareholders of the National Municipal Bond
Fund should consult their tax advisors regarding whether any portion of
distributions received from that Fund is exempt from state income tax, because
exemption may depend upon whether the shareholder is an individual, subject to
tax in any given state, the residence of the individual, and the particular
state tax treatment of mutual funds.

     OREGON MUNICIPAL BOND FUND. Individuals, trusts, and estates will not be
subject to the Oregon personal income tax on distributions from the Oregon
Municipal Bond Fund that are derived from tax-exempt interest paid on the
municipal bonds of Oregon and its political subdivisions and certain other
issuers (including Puerto Rico and Guam). However, individuals, trusts, and
estates that are subject to Oregon personal income tax also generally are
subject to the Oregon personal income tax on distributions from the Oregon
Municipal Bond Fund that are derived from other types of income, including
interest on the municipal bonds of states, other than Oregon. Furthermore, it is
expected that corporations subject to the Oregon corporation excise or income
tax will be subject to that tax on income from the Oregon Municipal Bond Fund,
including income that is exempt for federal purposes. Shares of the Oregon
Municipal Bond Fund will not be subject to Oregon property tax. Additional
discussion regarding local taxes, and the tax rules of states other than Oregon,
are beyond the scope of this discussion.

     Oregon generally taxes corporations on interest income from municipal
bonds. The Oregon Municipal Bond Fund is a corporation. However, ORS 317.309(2)
provides that a regulated investment company may deduct from such interest
income the exempt-interest dividends that are paid to shareholders. The Oregon
Municipal Bond Fund expects to distribute its interest income so that it will
not be liable for Oregon corporation excise or income taxes.

     The Oregon Municipal Bond Fund and the National Municipal Bond Fund will
report annually to its shareholders the percentage and source, on a
state-by-state basis, of interest income on municipal bonds received by the Fund
during the preceding year.

     SHORT TERM BOND FUND AND FIXED INCOME FUND. Individuals, trusts, and
estates will not be subject to Oregon personal income tax on dividends properly
designated by the Short Term Bond Fund as derived from interest on U.S.
Government obligations. See ORS 316.683. If a shareholder pays deductible
interest on debt incurred to carry shares of the Short Term Bond Fund, the
amount of the tax-exempt dividends for state tax purposes will be reduced. If a
shareholder sells shares of the Short Term Bond Fund at a loss after holding
them for six months or less, the loss will be disallowed for state purposes to
the extent of any state tax-exempt dividend received by the shareholder. Local
taxes, and the tax rules of states other than Oregon, are beyond the scope of
this discussion.

GENERAL INFORMATION

     Capital gains distributed to shareholders of both the Oregon Municipal Bond
Fund and the National Municipal Bond Fund will generally be subject to state and
local taxes. Further discussion regarding the state and local tax consequences
of investments in the Funds are beyond the scope of the tax discussions in the
Prospectus and this Statement of Additional Information.

ADDITIONAL INFORMATION

     The foregoing summary and the summary included in the Prospectus under
"Distributions and Taxes" of tax consequences of investment in the Funds are
necessarily general and abbreviated. No attempt has been made to present a
complete or detailed explanation of tax matters. Furthermore, the provisions of
the statutes and regulations on which they are based are subject to change,
prospectively or retroactively, by legislative or administrative action. Local
taxes are beyond the scope of this discussion. Prospective investors in the
Funds are urged to consult their own tax advisors regarding specific questions
as to federal, state, or local taxes.

     This discussion applies only to general U.S. shareholders. Foreign
investors and U.S. shareholders with particular tax issues or statuses should
consult their own tax advisors regarding the special rules that may apply to
them.

- --------------------------------------------------------------------------------
                              YIELD AND PERFORMANCE
- --------------------------------------------------------------------------------

     The Funds will from time to time advertise or quote their respective yields
and total return performance. These figures represent historical data and are
calculated according to SEC rules standardizing such computations. The
investment return and principal value (except, under normal circumstances, for
the Columbia Daily Income Company) will fluctuate so that shares when redeemed
may be worth more or less than their original cost.


TOTAL RETURN

     STANDARDIZED AVERAGE ANNUAL TOTAL RETURN. Average annual total return is
the actual return on a $1,000 investment in a particular class of shares of a
Fund, made at the beginning of a stated period, adjusted for the maximum sales
charge or applicable CDSC for the class of shares of the Fund and assuming that
all distributions were reinvested at NAV, converted to an average annual return
assuming annual compounding.

     NONSTANDARDIZED TOTAL RETURN. Nonstandardized total returns may differ from
standardized average annual total returns in that they may relate to
nonstandardized periods, represent aggregate (i.e. cumulative) rather than
average annual total returns or may not reflect the sales charge or CDSC.

     Total return for a newer class of shares for periods prior to inception
includes (a) the performance of the newer class of shares since inception and
(b) the performance of the oldest existing class of shares from the inception
date up to the date the newer class was offered for sale. In calculating total
rate of return for a newer class of shares in accordance with certain formulas
required by the SEC, the performance will be adjusted to take into account the
fact that the newer class is subject to a different sales charge than the oldest
class (e.g., if the newer class is Class A shares, the total rate of return
quoted will reflect the deduction of the initial sales charge applicable to
Class A shares; if the newer class is Class B or Class D shares, the total rate
of return quoted will reflect the deduction of the CDSC applicable to Class B or
Class D shares). However, the performance will not be adjusted to take into
account the fact that the newer class of shares bears different class specific
expenses than the oldest class of shares (e.g., Rule 12b-1 fees). Therefore, the
total rate of return quoted for a newer class of shares will differ from the
return that would be quoted had the newer class of shares been outstanding for
the entire period over which the calculation is based (i.e., the total rate of
return quoted for the newer class will be higher than the return that would have
been quoted had the newer class of shares been outstanding for the entire period
over which the calculation is based if the class specific expenses for the newer
class are higher than the class specific expenses of the oldest class, and the
total rate of return quoted for the newer class will be lower than the return
that would be quoted had the newer class of shares been outstanding for this
entire period if the class specific expenses for the newer class are lower than
the class specific expenses of the oldest class). Performance results reflect
any voluntary waivers or reimbursements of Fund expenses by the Adviser or its
affiliates. Absent these waivers or reimbursements, performance results would
have been lower.

AVERAGE ANNUAL TOTAL RETURN

     The Funds may also publish average annual total return quotations for
recent 1-, 5-, and 10-year periods (or a fractional portion thereof) computed by
finding the average annual compounded rates of return over periods that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:

         P(1+T) n =   ERV

Where:   P        =   a hypothetical initial payment of $1000

         T        =   average annual total return

         n        =   number of years

         ERV      =   ending redeemable value of a hypothetical
                      $1000 payment made at the beginning of the 1-,
                      5-, and 10-year periods (or fractional portion
                      thereof)


AVERAGE ANNUAL TOTAL RETURN AFTER TAXES ON DISTRIBUTIONS

     The Funds may publish average annual return (after taxes on distributions)
quotations for recent 1-, 5-, and 10-year periods (or a fractional portion
thereof) computed by finding the average annual compounded rates of return over
the 1-, 5-, and 10-year periods (or for the periods of the Fund's operations)
that would equate the initial amount invested to the ending redeemable value,
according to the following formula:

         P(1+T) n =   ATVD

Where:   P        =   a hypothetical initial payment of $1000

         T        =   average annual total return (after taxes on distributions)

         n        =   number of years

         ATVD     =   ending redeemable value of a hypothetical $1000 payment
                      made at the beginning of the 1-, 5-, or 10-year periods at
                      the end of the 1-, 5-, or 10-year periods (or fractional
                      portion), after taxes on fund distributions but not after
                      taxes on redemption

AVERAGE ANNUAL TOTAL RETURN AFTER TAXES ON DISTRIBUTIONS AND REDEMPTION

         The Funds may publish average annual return quotations (after taxes on
distributions and redemption) for recent 1-, 5-, and 10-year periods (or a
fractional portion thereof) computed by finding the average annual compounded
rates of return over the 1-, 5-, and 10-year periods (or for the periods of the
Fund's operations) that would equate the initial amount invested to the ending
redeemable value, according to the following formula:

         P(1+T)n  =   ATVDR

Where:   P        =   a hypothetical initial payment of $1000

         T        =   average annual total return (after taxes on distributions
                      and redemption)

         n        =   number of years

         ATVDR    =   ending redeemable value of a hypothetical $1000 payment
                      made at the beginning of the 1-, 5-, or 10-year periods at
                      the end of the 1-, 5-, or 10-year periods (or fractional
                      portion), after taxes on fund distributions and
                      redemption.

     Average annual total return before taxes, average annual total return after
taxes on distributions, and average annual total return after taxes on
distributions and redemption ("total return figures") may also be published for
recent 1-, 5-, and 10-year periods where the total return figures represent the
percentage return for the 1-, 5-, and 10-year periods that would equate the
initial amount invested to the ending redeemable value and the value after taxes
on distributions. If a Fund's registration statement under the 1940 Act has been
in effect less than 1-, 5-, or 10 years, the time period during which the
registration statement has been in effect will be substituted for the periods
stated. Total return figures for the Funds for the applicable periods are set
forth in the applicable Fund's Prospectus.

YIELD

THE COLUMBIA DAILY INCOME COMPANY

     Current yield is calculated by dividing the net change in the value of an
account of one share during an identified seven-calendar-day period by the value
of the one share account at the beginning of the same period ($1.00) and
multiplying that base period return by 365/7, i.e.:

     net change in value of account of one share    x   365    =   Current Yield
     -------------------------------------------        ---
       value of account at beginning of period           7

     The current yield for Columbia Daily Income Company Class Z shares for the
seven days ended December 31, 2002 was 1.04%.

     Compounded effective yield is calculated by daily compounding of the base
period return referred to above. This calculation is made by adding 1 to the
base period return, raising the sum to a number equal to 365 divided by 7, and
subtracting 1 from the result, i.e.:

        [(base period return + 1) 365/7] -1 = Compounded Effective Yield

The compounded effective yield for the Columbia Daily Income Company Class Z
shares for the seven days ended December 31, 2002 was 1.05%.

     The determination of net change in the value of an account for purposes of
the Columbia Daily Income Company yield calculations reflects the value of
additional shares purchased with income dividends from the original share and
income dividends declared on both the original share and the additional shares.
The determination of net change does not reflect realized gains or losses from
the sale of securities or unrealized appreciation or depreciation. The Columbia
Daily Income Company includes unrealized appreciation or depreciation, as well
as realized gains or losses, in the determination of actual daily dividends.
Therefore, the quoted yields as calculated above may differ from the actual
dividends paid. Columbia Daily Income Company is offered by Class Z shares only.

THE REAL ESTATE FUND, FIXED INCOME SECURITIES FUND, SHORT TERM BOND FUND, OREGON
MUNICIPAL BOND FUND, HIGH YIELD FUND AND NATIONAL MUNICIPAL BOND FUND

     Current yields of the Real Estate Fund, the Short Term Bond Fund, the Fixed
Income Securities Fund, the Oregon Municipal Bond Fund, the High Yield Fund, and
the National Municipal Bond Fund are calculated by dividing the net investment
income per share earned during an identified 30-day period by the maximum
offering price per share on the last day of the same period, according to the
following formula:

                     Yield = 2 [(a-b + 1) 6 -1]
                                   cd

Where:   a  =   dividends and interest earned during the period.

         b  =   expenses accrued for the period (net of reimbursement).

         c  =   the average daily number of shares outstanding during the period
                that were entitled to receive dividends.

         d  =   the maximum offering price per share on the last day of the
                period.

     The Funds use generally accepted accounting principles in determining
actual income paid, and these principles differ in some instances from SEC rules
for computing income for the above yield calculations. Therefore, the quoted
yields as calculated above may differ from the actual dividends paid. For the
30-day period ended December 31, 2002 the current yields for the funds are as
follows:



                                              Class A         Class B         Class D          Class Z
                                              -------         -------         -------          -------
                                                                                    
Columbia Fixed Income Securities Fund          3.95%           2.93%           3.04%            4.02%
Columbia High Yield Fund                       6.23%           5.54%           5.84%            6.54%
Columbia National Municipal Bond Fund          3.09%           2.55%           2.74%            3.42%
Columbia Oregon Municipal Bond Fund            3.79%           2.86%           3.25%            3.93%
Columbia Real Estate Fund                      3.76%           3.02%           3.01%            4.31%
Columbia Short Term Bond Fund                   ---             ---             ---             2.94%


THE OREGON MUNICIPAL BOND FUND

     The Oregon Municipal Bond Fund may publish a tax equivalent yield for
Oregon shareholders that represents the yield that an investor must receive on a
fully taxable investment to achieve the same after-tax results at the highest
then existing marginal combined Oregon and federal income tax rates, calculated
according to the following formula:

                        Tax Equivalent Yield = a + c + e
                                              1-b 1-d

Where:   a =   that portion of the current yield of the Fund that is exempt
               from federal and Oregon income tax.

         b =   highest then-existing marginal combined Federal and Oregon
               income tax rate.

         c =   that portion of the current yield of the Fund that is only
               exempt from federal gross income tax.

         d =   highest then-existing federal income tax rate.

         e =   that portion of the current yield of the Fund that is not tax
               exempt.

     The Oregon Municipal Bond Fund tax equivalent yields for the 30-period
ended December 31, 2002 are as follows:

                      Class A Class B Class D Class Z
                      ------- ------- ------- -------
                       6.78%   5.12%   5.82%   7.03%

THE NATIONAL MUNICIPAL BOND FUND

     The National Municipal Bond Fund may also publish a tax equivalent yield
for nonresidents of Oregon that represents the yield that an investor must
receive on a fully taxable investment to achieve the same after-tax results of
the highest then-existing marginal federal income tax rate, calculated according
to the following formula:

                       Tax Equivalent Yield = a + c
                                             1-b

Where:   a =   that portion of the current yield of the Fund that is exempt from
               federal income tax.

         b =   highest then-existing marginal federal income tax rate.

         c =   that portion of the current yield of the Fund that is not tax
               exempt.

     The National Municipal Bond Fund tax equivalent yields for the 30-period
ended December 31, 2002 are as follows:

                         Class A  Class B  Class D  Class Z
                         -------  -------  -------  -------
                           5.03%   4.15%    4.46%    5.57%


     The Funds may compare their performance to other mutual funds with similar
investment objectives and to the mutual fund industry as a whole, as quoted by
ranking services and publications of general interest. For example, these
services or publications may include Lipper Analytical Services, Inc., Barron's,
Business Week, Forbes, Investor's Business Daily, Money, Morningstar Mutual
Funds, The Wall Street Journal, and USA Today. These ranking services and
publications rank the performance of the Funds against all other funds over
specified periods and against funds in specified categories.

     The Funds may also compare their performance to that of a recognized stock
or bond index including the Standard & Poor's 500, Dow Jones, the Russell
indices, the NASDAQ stock indices, the NAREIT Equity Index, the Lehman indices,
the Merrill Lynch indices and the Merrill Lynch 1-5 Year Government/Corporate
Index or, with respect to the International Stock Fund, a suitable international
index, such as the Morgan Stanley Capital International Europe, Australasia, Far
East Index. The comparative material found in advertisements, sales literature,
or in reports to shareholders may contain past or present performance ratings.
This is not to be considered representative or indicative of future results or
future performance. Unmanaged indices may assume the reinvestment of dividends,
but generally do not reflect deductions for administrative and management costs
and expenses.

     In addition, the Funds may also compare their performance to other
income-producing securities such as (i) money market funds; (ii) various bank
products (based on average rates of bank and thrift institution certificates of
deposit, money market deposit accounts, and other accounts as reported by the
Bank Rate Monitor and other financial reporting services, including newspapers);
and (iii) U.S. Treasury bills or notes. There are differences between these
income-producing alternatives and the Funds other than their yields, some of
which are summarized below.

     TAX-RELATED ILLUSTRATIONS. A Fund also may present hypothetical
illustrations (i) comparing the Fund's and other mutual funds' pre-tax and
after-tax total returns, and (ii) showing the effects of income, capital gain
and estate taxes on performance.

     GENERAL. From time to time, a Fund may discuss or quote its current
portfolio manager as well as other investment personnel and members of the tax
management oversight team, including such person's views on: the economy;
securities markets; portfolio securities and their issuers; investment
philosophies, strategies, techniques and criteria used in the selection of
securities to be purchased or sold for the Fund; the Fund's portfolio holdings;
the investment research and analysis process; the formulation and evaluation of
investment recommendations; and the assessment and evaluation of credit,
interest rate, market and economic risks and similar or related matters.

     A Fund may also quote evaluations mentioned in independent radio or
television broadcasts, and use charts and graphs to illustrate the past
performance of various indices such as those mentioned in Appendix II and
illustrations using hypothetical rates of return to illustrate the effects of
compounding and tax-deferral. A Fund may advertise examples of the effects of
periodic investment plans, including the principle of dollar cost averaging. In
such a program, an investor invests a fixed dollar amount in a Fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more shares
when prices are low.

     From time to time, a Fund may also discuss or quote the views of LFD, the
Adviser and other financial planning, legal, tax, accounting, insurance, estate
planning and other professionals, or from surveys, regarding individual and
family financial planning. Such views may include information regarding:
retirement planning; general investment techniques (e.g., asset allocation and
disciplined saving and investing); business succession; issues with respect to
insurance (e.g., disability and life insurance and Medicare supplemental
insurance); issues regarding financial and health care management for elderly
family members; and similar or related matters.

     The yields of the Funds are not fixed and will fluctuate. The principal
value of your investment in each Fund (except, under normal circumstances, the
Columbia Daily Income Company) at redemption may be more or less than its
original cost. In addition, your investment is not insured and its yield is not
guaranteed. Although the yields of bank money market deposit and other similar
accounts will fluctuate, principal will not fluctuate and is insured by the
Federal Deposit Insurance Corporation up to $100,000. Bank passbook savings
accounts normally offer a fixed rate of interest, and their principal and
interest are also guaranteed and insured. Bank certificates of deposit offer
fixed or variable rates for a set term. Principal and fixed rates are guaranteed
and insured up to $100,000. There is no fluctuation in principal value.
Withdrawal of these deposits prior to maturity will normally be subject to a
penalty.

- --------------------------------------------------------------------------------
                              FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

     The Funds' most recent Annual and Semi-Annual Reports to shareholders are
separate documents supplied with this Statement of Additional Information. The
financial statements, accompanying notes and report of independent accountants
appearing in the Annual Reports, and the financial statements and accompanying
notes appearing in the Semi-Annual Report are incorporated by reference into
this Statement of Additional Information.





                                   APPENDIX I

INFORMATION APPLICABLE TO CERTAIN CLASS G SHAREHOLDERS

     Except as set forth below, Contingent Deferred Sales Charges ("CDSCs") and
conversion schedules are described in the Prospectuses.

     The following table describes the CDSC schedule applicable to Class G
shares received by former Galaxy Growth Fund II and Galaxy Short-Term Bond Fund
shareholders in exchange for Retail B Shares purchased prior to January 1, 2001:

                                                        % DEDUCTED WHEN
HOLDING PERIOD AFTER PURCHASE                           SHARES ARE SOLD

Through first year                                            5.00
Through second year                                           4.00
Through third year                                            3.00
Through fourth year                                           3.00
Through fifth year                                            2.00
Through sixth year                                            1.00
Longer than six years                                         None

     Class G shares received in exchange for Galaxy Short-Term Bond Fund Retail
B Shares that were purchased prior to January 1, 2001 will automatically convert
to Class T shares six years after purchase.

     Class G shares received in exchange for Galaxy Growth Fund II Retail B
Shares that were purchased prior to January 1, 2001 will automatically convert
to Class A shares six years after purchase.

     The following table describes the CDSC schedule applicable to Class G
shareholders whose Galaxy Large Cap Growth Fund Retail B Shares were acquired in
connection with the reorganization of the Pillar Funds:

                                                           % DEDUCTED WHEN
HOLDING PERIOD AFTER PURCHASE                              SHARES ARE SOLD

Through first year                                               5.50
Through second year                                              5.00
Through third year                                               4.00
Through fourth year                                              3.00
Through fifth year                                               2.00
Through sixth year                                               1.00
Through the seventh year                                         None
Longer than seven years                                          None

     If you acquired Retail B Shares of the Galaxy Large Cap Growth Fund in
connection with the reorganization of the Pillar Funds, your Class G shares will
automatically convert to Class B shares eight years after you purchased the
Pillar Fund Class B shares you held prior to the reorganization.





                                   APPENDIX II
                                DECEMBER 31, 2001

SOURCE                                            CATEGORY

CREDIT SUISSE FIRST BOSTON:                       CSFB High Yield Index
                                                  CSFB Leveraged Loan Index

LIPPER, INC.:                                     AMEX Composite Index P
                                                  AMEX Computer Tech IX P
                                                  AMEX Institutional IX P
                                                  AMEX Major Market IX P
                                                  Bse Sensex Index
                                                  CAC 40: FFR IX P
                                                  CD Rate 1 Month Index Tr
                                                  CD Rate 3 Month Index Tr
                                                  CD Rate 6 Month Index Tr
                                                  Consumer Price Index
                                                  DAX:DM IX TR
                                                  Domini 400 Social Index
                                                  Dow Jones 65 Comp Av P
                                                  Dow Jones Ind Average P
                                                  Dow Jones Ind Dly Reinv
                                                  Dow Jones Ind Mth Reinv
                                                  Dow Jones Trans Av P
                                                  Dow Jones Trans Av Tr
                                                  Dow Jones Util Av P
                                                  Dow Jones Util Av Tr
                                                  Ft/S&P Act Wld Ex US IX
                                                  Jakarta Composite Index
                                                  Jasdaq Index:Yen P
                                                  Lehman 1-3 Govt/Cred Tr
                                                  Lehman 1-3 Govt/Credit P
                                                  Lehman Aggregate Bd P
                                                  Lehman Aggregate Bd Tr
                                                  Lehman Cr Bd Int P
                                                  Lehman Cr Bd Int Tr
                                                  Lehman Govt Bd Int P
                                                  Lehman Govt Bd Int Tr
                                                  Lehman Govt Bd Long P
                                                  Lehman Govt Bd Long Tr
                                                  Lehman Govt Bd P
                                                  Lehman Govt Bd Tr
                                                  Lehman Govt/Cr Bd P
                                                  Lehman Govt/Cr Bd Tr
                                                  Lehman Govt/Cr Int P
                                                  Lehman Govt/Cr Int Tr
                                                  Lehman High Yield P
                                                  Lehman High Yield Tr
                                                  Lehman Muni 10 Yr IX P
                                                  Lehman Muni 10 Yr IX Tr
                                                  Lehman Muni 3 Yr IX P
                                                  Lehman Muni 3 Yr IX Tr
                                                  Lehman Muni 5 Yr IX Tr
                                                  Lehman Muni Bond IX P
                                                  Lehman Muni Bond IX Tr
                                                  ML 10+ Yr Treasury IX Tr
                                                  ML 1-10 YR CORP BD IX P
                                                  ML 1-10 YR CORP BD IX TR
                                                  ML 1-3 Yr Muni IX P
                                                  ML 1-3 Yr Muni IX Tr
                                                  ML 1-3 Yr Treasury IX P
                                                  ML 1-3 Yr Treasury IX Tr
                                                  ML 1-5 Yr Gv/Cp Bd IX P
                                                  ML 1-5 Yr Gv/Cp Bd IX Tr
                                                  ML 15 Yr Mortgage IX P
                                                  ML 15 Yr Mortgage IX Tr
                                                  ML 1-5 Yr Treasury IX P
                                                  ML 1-5 Yr Treasury IX Tr
                                                  ML 3 MO T-Bill IX Tr
                                                  ML 3-5 Yr Govt IX P
                                                  ML 3-5 Yr Govt IX Tr
                                                  ML 3-7 Yr Muni IX Tr
                                                  ML 7-12 YR MUNI IX P
                                                  ML 7-12 YR MUNI IX TR
                                                  ML Corp Master Index P
                                                  ML Corp Master Index Tr
                                                  ML Gov/ Corp Master IX T
                                                  ML Govt Master Index P
                                                  ML Govt Master Index Tr
                                                  ML Govt/Corp Master IX P
                                                  ML HIGH YLD MASTER 2  P
                                                  ML HIGH YLD MASTER 2  TR
                                                  ML High Yld Master IX P
                                                  ML High Yld Master IX Tr
                                                  ML US CP/GV 10+ YR IX P
                                                  ML US CP/GV 10+ YR IX TR
                                                  ML US DOM MASTER  IX P
                                                  ML US DOM MASTER  IX TR
                                                  MSCI AC Americas Free GD
                                                  MSCI AC Americas Free ID
                                                  MSCI AC Asia Fr-Ja IX GD
                                                  MSCI AC Asia Fr-Ja IX ID
                                                  MSCI AC ASIA PAC FR DGD
                                                  MSCI AC ASIA PAC FR DND
                                                  MSCI AC ASIA PAC FR P IX
                                                  MSCI AC Asia Pac Fr-J GD
                                                  MSCI AC Asia Pac FR-J IX
                                                  MSCI AC Europe IX GD
                                                  MSCI AC Europe IX ID
                                                  MSCI AC Fe Free IX GD
                                                  MSCI AC Fe Free IX ID
                                                  MSCI AC Fe Fr-Ja IX GD
                                                  MSCI AC Fe Fr-Ja IX ID
                                                  MSCI AC Pac Fr-Jpn IX GD
                                                  MSCI AC Pac Fr-Jpn IX ID
                                                  MSCI AC Pacific FR IX ID
                                                  MSCI AC WLD FR VAL IX GD
                                                  MSCI AC WLD FR-US GR DGD
                                                  MSCI AC World Free IX GD
                                                  MSCI AC World Free Ix ID
                                                  MSCI AC World Fr-USA GD
                                                  MSCI AC World Fr-USA ID
                                                  MSCI AC WRLD FR GR DGD
                                                  MSCI AC Wrld Fr-Ja IX GD
                                                  MSCI AC Wrld Fr-Ja IX ID
                                                  MSCI AC WRLD FR-US V DGD
                                                  MSCI Argentina IX GD
                                                  MSCI Argentina IX ID
                                                  MSCI Australia IX GD
                                                  MSCI Australia IX ID
                                                  MSCI Australia IX ND
                                                  MSCI Austria IX GD
                                                  MSCI Austria IX ID
                                                  MSCI Austria IX ND
                                                  MSCI Belgium IX GD
                                                  MSCI Belgium IX ID
                                                  MSCI Belgium IX ND
                                                  MSCI BRAZIL FREE IX GD
                                                  MSCI BRAZIL FREE IX ID
                                                  MSCI Canada IX GD
                                                  MSCI Canada IX ID
                                                  MSCI Canada IX ND
                                                  MSCI Chile IX GD
                                                  MSCI Chile IX ID
                                                  MSCI China Free IX ID
                                                  MSCI Colombia IX GD
                                                  MSCI Colombia IX ID
                                                  MSCI Czech Rep IX GD
                                                  MSCI Czech Rep IX ID
                                                  MSCI Denmark IX GD
                                                  MSCI Denmark IX ID
                                                  MSCI Denmark IX ND
                                                  MSCI EAFE - JAPAN IX ND
                                                  MSCI EAFE - UK IX GD
                                                  MSCI EAFE - UK IX ID
                                                  MSCI EAFE - UK IX ND
                                                  MSCI EAFE + Canada IX GD
                                                  MSCI EAFE + Canada IX ID
                                                  MSCI EAFE + Canada IX ND
                                                  MSCI EAFE + EMF IX GD
                                                  MSCI EAFE + EMF IX ID
                                                  MSCI EAFE Fr IX ID
                                                  MSCI EAFE GDP Wt IX GD
                                                  MSCI EAFE GDP Wt IX ID
                                                  MSCI EAFE GDP Wt IX ND
                                                  MSCI EAFE GROWTH IX GD
                                                  MSCI EAFE GROWTH IX ID
                                                  MSCI EAFE IX GD
                                                  MSCI EAFE IX ID
                                                  MSCI EAFE IX ND
                                                  MSCI EAFE VALUE IX GD
                                                  MSCI EAFE VALUE IX ID
                                                  MSCI EASEA IX GD
                                                  MSCI EASEA IX ID
                                                  MSCI EASEA IX ND
                                                  MSCI Em Eur/Mid East GD
                                                  MSCI Em Eur/Mid East ID
                                                  MSCI Em Europe IX GD
                                                  MSCI Em Europe IX ID
                                                  MSCI EMF Asia IX GD
                                                  MSCI EMF Asia IX ID
                                                  MSCI EMF Far East IX GD
                                                  MSCI EMF Far East IX ID
                                                  MSCI EMF IX GD
                                                  MSCI EMF IX ID
                                                  MSCI EMF Latin Am IX GD
                                                  MSCI EMF Latin Am IX ID
                                                  MSCI EURO UNION GR IX GD
                                                  MSCI Europe - UK IX GD
                                                  MSCI Europe - UK IX ID
                                                  MSCI Europe - UK IX ND
                                                  MSCI Europe GDP Wt IX ID
                                                  MSCI Europe IX GD
                                                  MSCI Europe IX ID
                                                  MSCI Europe IX ND
                                                  MSCI European Union GD
                                                  MSCI European Union ID
                                                  MSCI EUROPEAN VL IX GD
                                                  MSCI Far East Free IX ID
                                                  MSCI Far East IX GD
                                                  MSCI Far East IX ID
                                                  MSCI Far East IX ND
                                                  MSCI Finland IX GD
                                                  MSCI Finland IX ID
                                                  MSCI Finland IX ND
                                                  MSCI France IX GD
                                                  MSCI France IX ID
                                                  MSCI France IX ND
                                                  MSCI Germany IX GD
                                                  MSCI Germany IX ID
                                                  MSCI Germany IX ND
                                                  MSCI Greece IX GD
                                                  MSCI Greece IX ID
                                                  MSCI Hong Kong IX GD
                                                  MSCI Hong Kong IX ID
                                                  MSCI Hongkong IX ND
                                                  MSCI Hungary IX GD
                                                  MSCI Hungary IX ID
                                                  MSCI India IX GD
                                                  MSCI India IX ID
                                                  MSCI Indonesia FR IX GD
                                                  MSCI Indonesia FR IX ID
                                                  MSCI Ireland IX ID
                                                  MSCI Israel Dom IX ID
                                                  MSCI Israel IX ID
                                                  MSCI Israel Non Dom Ixid
                                                  MSCI Italy IX GD
                                                  MSCI Italy IX ID
                                                  MSCI Italy IX ND
                                                  MSCI JAPAN GROWTH IX GD
                                                  MSCI Japan IX GD
                                                  MSCI Japan IX ID
                                                  MSCI Japan IX ND
                                                  MSCI JAPAN VALUE IX GD
                                                  MSCI Jordan IX GD
                                                  MSCI Jordan IX ID
                                                  MSCI Kokusai IX GD
                                                  MSCI Kokusai IX ID
                                                  MSCI Kokusai IX ND
                                                  MSCI Korea IX GD
                                                  MSCI Korea IX ID
                                                  MSCI Luxembourg IX ID
                                                  MSCI Malaysia Free Ix GD
                                                  MSCI Malaysia Free IX ID
                                                  MSCI Mexico Free IX GD
                                                  MSCI Mexico Free IX ID
                                                  MSCI N American G IX ID
                                                  MSCI N American Vl IX ID
                                                  MSCI Netherland IX GD
                                                  MSCI Netherland IX ID
                                                  MSCI Netherland IX ND
                                                  MSCI New Zealand IX GD
                                                  MSCI New Zealand IX ID
                                                  MSCI New Zealand IX ND
                                                  MSCI Nordic IX GD
                                                  MSCI Nordic IX ID
                                                  MSCI Nordic IX ND
                                                  MSCI Norway IX GD
                                                  MSCI Norway IX ID
                                                  MSCI Norway IX ND
                                                  MSCI Nth Amer IX GD
                                                  MSCI Nth Amer IX ID
                                                  MSCI Nth Amer IX ND
                                                  MSCI Pac - Japan IX GD
                                                  MSCI Pac - Japan IX ID
                                                  MSCI Pac - Japan IX ND
                                                  MSCI PAC FREE GR IX GD
                                                  MSCI PAC FREE VL IX GD
                                                  MSCI PAC FR-JPN GR IX GD
                                                  MSCI PAC FR-JPN VL IX GD
                                                  MSCI Pacific Free IX ID
                                                  MSCI Pacific Fr-Jpn ID
                                                  MSCI Pacific IX GD
                                                  MSCI Pacific IX ID
                                                  MSCI Pacific IX ND
                                                  MSCI Pakistan IX GD
                                                  MSCI Pakistan IX ID
                                                  MSCI Peru IX GD
                                                  MSCI Peru IX ID
                                                  MSCI Philippines FR DG
                                                  MSCI Philippines FR GD
                                                  MSCI Portugal IX GD
                                                  MSCI Portugal IX ID
                                                  MSCI Russia IX GD
                                                  MSCI Russia IX ID
                                                  MSCI Singapore Fr IX GD
                                                  MSCI Singapore Fr IX ID
                                                  MSCI South Africa IX GD
                                                  MSCI South Africa IX ID
                                                  MSCI Spain IX GD
                                                  MSCI Spain IX ID
                                                  MSCI Spain IX ND
                                                  MSCI Sri Lanka IX GD
                                                  MSCI Sri Lanka IX ID
                                                  MSCI Sweden IX GD
                                                  MSCI Sweden IX ID
                                                  MSCI Sweden IX ND
                                                  MSCI Swtzrlnd IX GD
                                                  MSCI Swtzrlnd IX ID
                                                  MSCI Swtzrlnd IX ND
                                                  MSCI Taiwan IX GD
                                                  MSCI Taiwan IX ID
                                                  MSCI Thailand Free IX GD
                                                  MSCI Thailand Free IX ID
                                                  MSCI Turkey IX GD
                                                  MSCI Turkey IX ID
                                                  MSCI UK IX GD
                                                  MSCI UK IX ID
                                                  MSCI UK IX ND
                                                  MSCI USA IX GD
                                                  MSCI USA IX ID
                                                  MSCI USA IX ND
                                                  MSCI Venezuela IX GD
                                                  MSCI Venezuela IX ID
                                                  MSCI World - UK IX GD
                                                  MSCI World - UK IX ID
                                                  MSCI World - UK IX ND
                                                  MSCI World - USA IX GD
                                                  MSCI World - USA IX ID
                                                  MSCI World - USA IX ND
                                                  MSCI World Free IX ND
                                                  MSCI World GDP Wt IX ID
                                                  MSCI WORLD GROWTH IX ID
                                                  MSCI World IX Free ID
                                                  MSCI World IX GD
                                                  MSCI World IX ID
                                                  MSCI World IX ND
                                                  MSCI WORLD IX SC DGD IX
                                                  MSCI WORLD IX VALUE
                                                  MSCI WORLD VALUE IX ID
                                                  MSCI WORLD-USA GR IX GD
                                                  MSCI World-USA VL IX GD
                                                  MSCI Wrld - Austrl IX GD
                                                  MSCI Wrld - Austrl IX ID
                                                  MSCI Wrld - Austrl IX ND
                                                  MSCI WRLD EX USA SC GD
                                                  MSCI WRLD EX USA SC ID
                                                  MSCI WRLD EX USA SC ND
                                                  MSCI WRLD FINANCIALS GD
                                                  MSCI WRLD FINANCIALS ID
                                                  MSCI WRLD FREE GR DGD IX
                                                  MSCI WRLD HEALTHCARE GD
                                                  MSCI WRLD HEALTHCARE ID
                                                  MSCI WRLD INFO TECH GD
                                                  MSCI WRLD INFO TECH ID
                                                  MSCI WRLD TECH HDWR GD
                                                  MSCI WRLD TECH HDWR ID
                                                  MSCI WRLD TELECOM GD
                                                  MSCI WRLD TELECOM ID
                                                  NASDAQ 100 IX P
                                                  NASDAQ Bank IX P
                                                  NASDAQ Composite IX P
                                                  NASDAQ Industrial IX P
                                                  NASDAQ Insurance IX P
                                                  NASDAQ Natl Mkt Cmp IX
                                                  NASDAQ Natl Mkt Ind IX
                                                  NASDAQ Transport IX P
                                                  Nikkei 225 Avg:Yen P
                                                  NYSE Composite P
                                                  NYSE Finance IX P
                                                  NYSE Industrials IX P
                                                  NYSE Transportation IX
                                                  NYSE Utilities IX P
                                                  Philippines Composite IX
                                                  PSE Technology IX P
                                                  Russell 1000 Grow Ix
                                                  Russell 1000 Grow IX Tr
                                                  Russell 1000 IX P
                                                  Russell 1000 IX Tr
                                                  Russell 1000 Value Ix
                                                  Russell 1000 Value IX Tr
                                                  Russell 2000 Grow Ix
                                                  Russell 2000 Grow IX Tr
                                                  Russell 2000 IX P
                                                  Russell 2000 IX Tr
                                                  Russell 2000 Value Ix
                                                  Russell 2000 Value IX Tr
                                                  RUSSELL 2500 GROW IX P
                                                  RUSSELL 2500 GROW IX TR
                                                  RUSSELL 2500 IX P
                                                  RUSSELL 2500 IX TR
                                                  RUSSELL 2500 VALUE IX P
                                                  RUSSELL 2500 VALUE IX TR
                                                  RUSSELL 3000 GROW IX P
                                                  RUSSELL 3000 GROW IX TR
                                                  Russell 3000 IX P
                                                  Russell 3000 IX Tr
                                                  RUSSELL 3000 VALUE IX P
                                                  RUSSELL 3000 VALUE IX TR
                                                  RUSSELL MDCP VALUE IX P
                                                  RUSSELL MDCP VALUE IX TR
                                                  Russell Midcap G IX TR
                                                  RUSSELL MIDCAP GR IX P
                                                  RUSSELL MIDCAP IX P
                                                  RUSSELL MIDCAP IX TR
                                                  RUSSELL SMCP CMPT GRO P
                                                  RUSSELL SMCP CMPT GRO TR
                                                  RUSSELL SMCP CMPT IX P
                                                  RUSSELL SMCP CMPT IX TR
                                                  RUSSELL SMCP CMPT VAL IX
                                                  RUSSELL SMCP CMPT VAL P
                                                  RUSSELL TOP 200 GRO IX P
                                                  RUSSELL TOP 200 GROW  IX
                                                  RUSSELL TOP 200 IX P
                                                  RUSSELL TOP 200 IX TR
                                                  RUSSELL TOP 200 VAL IX P
                                                  RUSSELL TOP 200 VALUE IX
                                                  S & P 100 Index TR
                                                  S & P 500 Daily Reinv
                                                  S & P 500 Index P
                                                  S & P 500 Mnthly Reinv
                                                  S & P 500/BARRA G IX TR
                                                  S & P 500/BARRA V IX TR
                                                  S & P 600 Index P
                                                  S & P 600 Index Tr
                                                  S & P Financial IX P
                                                  S & P Financial IX Tr
                                                  S & P Industrial IX Tr
                                                  S & P Industrials P
                                                  S & P MC 400/BARRA G TR
                                                  S & P MC 400/BARRA V TR
                                                  S & P Midcap 400 IX P
                                                  S & P Midcap 400 IX Tr
                                                  S & P SC 600/BARRA G TR
                                                  S & P SC 600/BARRA V TR
                                                  S & P Transport Index P
                                                  S & P Transport IX Tr
                                                  S & P Utility Index P
                                                  S & P Utility Index Tr
                                                  SB Cr-Hdg Nn-US Wd IX Tr
                                                  SB Cr-Hdg Wd Gv Bd IX Tr
                                                  SB Non-US Wd Gv Bd IX Tr
                                                  SB Wd Gv Bd:Austrl IX Tr
                                                  SB Wd Gv Bd:Germany IX Tr
                                                  SB Wd Gv Bd:Japan IX Tr
                                                  SB Wd Gv Bd:UK IX Tr
                                                  SB Wd Gv Bd:US IX Tr
                                                  SB World Govt Bond IX Tr
                                                  Straits Times Index
                                                  SWISS PERF:SFR IX TR
                                                  TAIWAN SE:T$IX P
                                                  T-Bill 1 Year Index Tr
                                                  T-Bill 3 Month Index Tr
                                                  T-Bill 6 Month Index Tr
                                                  Thailand Set Index
                                                  TOKYO 2ND SCT:YEN IX P
                                                  TOKYO SE(TOPIX):YEN IX P
                                                  TORONTO 300:C$IX P
                                                  TORONTO SE 35:C$IX P
                                                  Value Line Cmp IX-Arth
                                                  Value Line Cmp IX-Geom
                                                  Value Line Industrl IX
                                                  Value Line Railroad IX
                                                  Value Line Utilities IX

THE NATIONAL ASSOCIATION OF
REAL ESTATE INVESTMENT FUND:                      Real Estate Investment Fund
                                                  Index

SALOMON SMITH                                     SSB World Ex U.S. Cap Range
BARNEY:                                           $2-$10 Billion

                                                  SSB EMI Global Ex U.S.
                                                  SSB EMI World Ex U.S.
                                                  Salomon 30 Year Benchmark

Each Russell Index listed above is a trademark/service mark of the Frank Russell
Company. RussellTM is a trademark of the Frank Russell Company.

* in U.S. currency